The View From Here
by Ric Jackson
June 20th, 2018

Our Industry Responds as Trade Conflict Escalates

In physics, we know that for every action, there is an opposite and equal reaction. Now, we’re seeing that Newton’s third law is true in trade, too.

The trade conflict between the U.S. and China is heating up daily with each side making new threats – and it’s difficult to tell where we’ll net out, if anywhere. But we do know that an all-out trade war could have detrimental effects on U.S. manufacturing, including in our own industry.

Over the weekend, China responded to U.S. trade tariffs on aluminum and steel with potential tariffs of its own on more than 1,000 products and materials imported to the States. Many are speculating what will be on the negotiating block next – intentional manufacturing bottlenecks on goods being imported to the U.S.? Boycotts on products made in the U.S.? Travel boycotts?

The stock market is already starting to slip as this trade conflict (I hesitate to call it a war just yet) is bringing about uncertainty among investors.

So, what does this mean for us exactly?

As I wrote a couple of weeks ago, we could be looking at increased raw material costs, increased construction costs and slower new construction growth. But as time goes on, we’re seeing that the impacts could even be greater than that.

I have said for years that our fenestration industry is almost exclusively “Made in America” with very few finished windows imported. The same cannot be said for components like hardware that are imported from outside the U.S. Increasing costs of these components will likely hurt window manufacturers as they are difficult to pass through.

The Window and Door Manufacturers Association (WDMA) seems to agree, recently submitting written comments to the United States Trade Representative (USTR) requesting removal of certain products from the list. According to a recent communication from the organization:

“WDMA highlighted the negative impact additional tariffs could have on manufacturers and the residential and commercial construction industry and requested the removal of several product categories from consideration. USTR will evaluate comments from the public on these proposed tariffs and are expected to make a determination about whether to impose them in early June.”

The View from Here is, as always, that we must be our own advocates to continue our growth trajectories and to offer fairly priced goods to our consumers. I encourage you to get involved. WDMA is requesting that members who have questions or would like to review a copy of the USTR letter contact Kevin McKenney at kmckenney@wdma.com.

What’s your View? Email me directly at eric.jackson@quanex.com.

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