CLYDE, Ohio — President Donald Trump’s decision to impose tariffs on goods entering the United States has had a clear and profound effect on some American businesses. But companies like Whirlpool, and the towns that depend on them, are experiencing a whiplash in how those tariffs could affect their bottom line.
Washing machines spin through trade warAug. 1, 201802:50
In January, Trump slapped initial tariffs of 20 percent on imported washing machines to help American companies like Whirlpool while taking aim at some of their foreign competitors like LG and Samsung.
The company cheered the administration’s decision, but was cautious in tying it to long-term success. CEO Marc Bitzer told investors on a conference call that month that it was "too early to quantify the financial impact on 2018,” yet he felt the move was "without any doubt, a positive catalyst for Whirlpool.”
Then came the president’s decision in March to impose tariffs of 25 percent on imported steel and 10 percent on imported aluminum. Whirlpool took a financial hit because steel and aluminum materials make up key parts of the washing machines they sell.
In a statement to MSNBC, Bitzer acknowledged that "the net impact of all remedies and tariffs has turned into a headwind for us."
"The washer safeguard related remedies, which are quite distinct from the recently enacted tariffs, should be a positive for us as the companies in which these tariffs were levied work off the inventories they stockpiled in advance of the regulatory ruling. As we see the net effect of [each set of tariffs], the net impact is, in fact, a negative for our business."
Since January, Whirlpool’s stock has slid 27 percent, with numbers plunging 14.5 percent one day last week alone following the release of their quarterly earnings, their worst day posted in more than 30 years.
When asked about whether Whirlpool has notified any stores about changes in pricing, a representative for the company told MSNBC that “Whirlpool doesn’t discuss retailer interactions or pricing strategies.”
But data from financial analysis firm Thinknum estimates that since January, the average prices of Whirlpool washing machines at big box retailers have actually increased around 23 percent.
The ground level
Any repercussions from these tariffs could be felt in the community of Clyde, Ohio, where Whirlpool operates its gigantic washing machine plant and employs more than 3,000 people.
A town of roughly 6,000, Clyde sits in the northern part of the state between Toledo and Cleveland, surrounded by farmland, humming with the pace of small town life and largely defined by the company’s deep-rooted presence in the area.
The city's finance director, Craig Davis, says roughly two thirds of his budget comes from taxes paid by Whirlpool, its workers, suppliers, and vendors.
“We talk about our withholdings for income tax, things like that, it's huge,” he said. "But I think they're vested in the community, too. Obviously, Whirlpool goes, Clyde goes. Clyde goes, Whirlpool goes, as in working together.”
The park right next to his office even has a stone sign saying it was funded in part by the Whirlpool Foundation.
Nearly every person in town and in the surrounding area is connected to the company in some form, and all of the businesses are affected by what happens to the area’s largest employer.
Directly across the street from the plant, Bill Tea runs an RV sales lot, and says he’s sold hundreds of vehicles to Whirlpool workers over the years.
Whirlpool’s significance to Clyde and the neighboring towns is “huge,” he said. “If anything happened to that plant, this would be a ghost town.”
Clyde sits in Sandusky County, a politically decisive area in a politically decisive state.
Not only is Ohio a critical swing state in presidential election years, but this year it’s the home of competitive midterm races for governor and for senator. The county narrowly voted for Barack Obama in 2008 and 2012, but swung hard for Donald Trump in 2016 by a margin of 23 points.
Tea voted for Trump, and although he said that trusting the president on this issue "gets a little tougher every day,” he added: "I have to have faith. I have faith."
Despite feeling a burn from the steel and aluminum tariffs, Whirlpool says they aren’t making any big production decisions yet.
"We will not make any premature decisions on our production footprint,” Bitzer said in his statement to MSNBC. “Eighty percent of the products we sell in the U.S. are made in the U.S. — and we intend to keep it that way."
But they are worried about other potential repercussions in the future.
"One area of concern for us is the 'unintended consequence' of the tariffs,” he continued. "Not only the domestic U.S. steel prices — which are now 50 percent higher than the rest of the world, making competitive domestic appliance production challenging — but also the retaliation effects, such as the recent Canadian tariffs on U.S. appliance imports."
Businesses and officials in Clyde meanwhile are watching to see what both Trump and Whirlpool do next, anticipating the company’s continued prominence in their community.
“It's been here for 65 years,” said Davis. "We hope it's here at least another 100 years."