Economy

More South Carolina businesses could close due to tariffs, SC Chamber warns

James Smith addresses Trump’s tariffs, Fairfield County job losses

S.C. Democratic gubernatorial nominee James Smith held a press conference in Winnsboro to address Element Electronics’ decision to shut down its plant there, citing theTrump Administration’s tariffs on Chinese parts.
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S.C. Democratic gubernatorial nominee James Smith held a press conference in Winnsboro to address Element Electronics’ decision to shut down its plant there, citing theTrump Administration’s tariffs on Chinese parts.

Element Electronics is the first South Carolina factory to say it will close in response to President Donald Trump’s tariffs; the S.C. Chamber of Commerce warns it likely won’t be the last.

Based on conversations with companies in the state’s business community, S.C. Chamber president and chief executive Ted Pitts told McClatchy Friday he expects more local manufacturers to announce closures or layoffs in the coming weeks.

“I think we’re going to hear about more manufacturing operations in South Carolina shutting down because of the trade conflict,” said Pitts.

Pitts sent a letter to the S.C. congressional delegation last month urging members to do “whatever it takes” to lobby the Trump administration against tariffs that could hurt the state’s economy. He said Friday he was encouraging S.C. businesses to also reach out to the state’s two U.S. senators, Republicans Lindsey Graham and Tim Scott, as the consequences of an escalating global trade war are felt across the state.

Of all the South Carolinians in Congress, Graham and Scott have the best chance of reaching the president’s ear on tariffs.

Graham recently spent an entire day with Trump on a New Jersey golf course, where trade was a topic of conversation. Scott is a member of the Senate Finance Committee, which has jurisdiction over trade issues. He also has some influence with the administration after leading on the GOP’s tax-cut bill.

Until this point, both senators have been reticent to sound the alarm bells. They mostly have urged constituents to be patient and give Trump the space to negotiate better trade deals, particularly with China, accused of having particularly unfair practices.

“There’s gonna be some pain involved,” Graham said this past week. “I hate what’s happening. But if we don’t take on China now and rearrange the international trading system, it’s just a matter of time before our industrial base is eroded.”

Graham and Scott said they were aware of the plight of Element, which plans to close its Winnsboro operation and cut 126 jobs because tariffs will make it too costly to buy a necessary Chinese-made television-assembly component. The senators did not, however, indicate there was anything they could do to help Element specifically, nor did they signal there was a delegation-wide effort to lobby the administration to exclude from tariffs the critical component.

Rep. Ralph Norman, R-S.C., who represents the district where Element is located, did say that he had been asking the administration for such an exclusion for months.

“I haven’t lost hope yet,” Norman said.

It’s not clear whether more S.C. companies closing could prompt Graham and Scott — or any other Republican in the state’s congressional delegation — to sound alarm bells.

But U.S. Rep. Mark Sanford of Charleston, the only S.C. Republican in Congress to publicly oppose Trump’s trade policies, said it was “incumbent” upon his colleagues to challenge the president.

“If you come from a state that is as import and export driven as South Carolina, it is vital that we do speak up because if no one does, destructive ideas get advanced and that will hurt the very people that we represent,” Sanford said.

Sanford, though, has seen the consequences of standing up to Trump: It’s part of the reason he lost his GOP primary to state Rep. Katie Arrington of Summerville in June and won’t be returning to Congress next year.

Some S.C. manufacturers are benefiting from Trump’s tariffs, Pitts said. Century Aluminum, the largest domestic producer of primary aluminum, reportedly is adding jobs at its Lowcountry plant, thanks to tariffs on foreign aluminum imports.

But many plants in the state rely on imported goods from China, Canada, Mexico and the European Union to make their products — from the car manufacturing giant BMW in Spartanburg to the beleaguered television producer Element in Winnsboro.

With higher tariffs, many will no longer be able to afford to buy the components necessary to make their products. Retaliatory tariffs from sanctioned countries also might make it harder for S.C. companies to sell their products to overseas customers. Sanford said this could hurt the economic viability of the Port of Charleston, South Carolina’s biggest export hub.

In July, the U.S. Chamber of Commerce issued a report warning South Carolina would be the third hardest-hit by retaliatory tariffs. According to the report, 579,300 S.C. jobs are supported by trade, and more than $3 billion in state exports are threatened by new economic sanctions.

Avery G. Wilks of The State contributed; Emma Dumain: 202-383-6126, @Emma_Dumain
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