Gary DuBoff, CEO of Saddle Brook-based manufacturer Arrow Fastener, loves to tell his “How President Donald Trump’s tariffs hurt me instead of helped me” story for one simple reason:
To see which part of the story most stuns the listener:
- The fact that his initial application to get an exclusion from the tariff was rejected because it had “the wrong code”;
- The fact that the steel he needs to produce staples for his best-selling staple guns is not available from any country other than China (a fact U.S. Steel and Nucor agree with);
- The fact that he could buy the staples that he wants to manufacture here at a higher cost to him from the same steel vendors in China and not pay the 25 percent tariff.
“You tell me: What’s the dumbest thing about this?” he said. “Everybody I tell the story to, says, ‘Well, that makes no sense.’”
DuBoff has reached out to his elected officials — he spoke highly of the efforts of U.S. Sen. Robert Menendez (D-N.J.) — but said it’s been of little help.
“All we really get from Washington is, ‘We’re overburdened and we’re really not staffed up for this and we’re working as fast as we can,’” he said.
It would be nice to put this off as another example of government bureaucracy gone wrong — but it has very real economic consequences for DuBoff.
DuBoff estimates he is losing $125,000 a month in revenue because of the tariffs — a loss he has been taking since they were announced in April. And it potentially could cost jobs at the manufacturing plant he recently invested $3 million in because he wants to — wait for it — help build a manufacturing base in the U.S. and New Jersey.
“We’re doing everything we can to try and avoid losing jobs,” he said. “We are looking at some other options, other countries other than China, which we might be able to work with.”
He doesn’t want it to come to that. And he hopes a sensible solution will prevail.
“We believe intellectually this can’t go on forever, right? But both sides seem to be really digging, so we don’t know,” he said.
DuBoff said he will not make any decision until the end of the year, something he said he has done to alleviate any immediate concerns of his more than 250 employees, employees with an average service time of 17 years at a company that has been in the U.S. since 1929 and in New Jersey since 1966.
“I don’t want to lose people who think we’re going to move this operation somewhere else because of the tariff situation,” he said. “We’re going to just bide our time.
“We’re not going to make any changes this year and hope that, in the meantime, between now and the of the year, this goes away.”
Arrow Fastener has resubmitted its exemption requests. The application has been posted and now there is a 30-day window when companies can comment on the request.
It’s the greatest economic development opportunity for steel manufacturers in the U.S., as it gives them a chance to pick up business. So far, (and the latest comment period closes Aug. 26) no companies have jumped in to say they can supply the product Arrow Fastener needs.
“U.S. Steel and Nucor are going through the exclusion requests and commenting if they can supply the product,” he said. “And, anytime someone says they can supply the product, the exclusion of request is denied.”
And as much as DuBoff is hoping someone will say it can produce the product — a long, thin steel wire that he shapes into staples — he’s fairly certain no one will.
“We already would be using them,” he said.
DuBoff also is fairly certain that, if his application gets through the comment period, it will not be acted upon quickly due to the volume of requests.
“There’s the 30-day comment period and then it’s as long as it takes them to get to it,” he said. “There is no guarantee on time.
“We were actually early, when we submitted the initial request, and that took 60 days. It wouldn’t shock me if this one took six months because they’re inundated with 20,000 requests.”
That’s a long time to tell a story that makes no sense.
Read more from ROI-NJ:
- Unexpected consequences: Trump’s steel tariffs are hurting N.J. manufacturer that can’t get raw materials in the U.S.