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Shayne Kemp realized final week that his household’s craft wooden firm should pay $300,000 in import tariffs by Monday. The small firm doesn’t have that form of cash.
Kemp, who’s vp of Farmington-based Kemp Enterprises, is anxious for his household and the broader implications for Maine’s wooden business, which has seen merchandise it used to make in abundance transfer to cheaper abroad manufacturing.
“My father is making an attempt to have a look at other ways to tug this out of a hat, however realistically, he could haven’t any selection however to promote his residence,” Kemp mentioned. “It’s actually not proper.”
It’s an instance of the collateral injury to American firms from a commerce struggle with China that started below former President Donald Trump however continues to be being enforced by President Joe Biden. Whereas tariffs are imposed on items that the U.S. authorities deems a menace to home business, Kemp Enterprises is an instance of an organization that depends on imports.
The stiff duties come from a federal rule that went into impact in February 2021. On high of a 25 % obligation levied on sure items from China, it provides tariffs of 220 % of the worth of sure millwork imports, together with wood dowels that Kemp Enterprises buys from a Chinese language firm.
However it’s troublesome to supply sufficient of the white birch dowels within the U.S., Kemp mentioned. The wholesaler sells dowels and wood parts to toymakers, builders and different firms, with the dowel phase making up 25 % of Kemp’s enterprise.
He and his father have been unaware of the brand new tariff. Had they identified about it, they’d have found out a approach to deal with it, even when that meant getting dowels domestically out of costlier wooden. They discovered they’d not been paying the additional obligation on their imports final Monday, after they heard from a competitor that it had been requested to pay the obligation.
Kemp contacted his native freight forwarder and customs dealer, Ocean Air, which confirmed he wanted to show his merchandise didn’t fall below the legislation or pay the extra duties to the federal Customs and Border Safety by Monday. An Ocean Air spokesperson was not instantly accessible for remark.
He mentioned 4 containers of dowels value about $60,000 per container have been flagged by customs as not having the additional obligation paid, and one other three or 4 may doubtlessly require funds.
“It may value us a whole bunch of hundreds of {dollars} in tariffs,” he mentioned.
Kemp mentioned he and his father have reached out to members of Maine’s congressional delegation, which mentioned it’s speaking to the related federal authorities concerning the state of affairs and is working to arrange a gathering with the Commerce Division as quickly as potential.
The corporate additionally employed a lawyer, Richard Furman, who mentioned it should pay or doubtlessly endure further monetary losses. Though the federal government usually doesn’t grant cost extensions, he mentioned, it is likely to be potential to work out a cost plan.
The federal authorities may doubtlessly seize the dowels and promote them at public sale. One other potential final result is that the surety company that supplied an import bond for the merchandise may pay the duties after which come after Kemp Enterprises for the quantity owed.
Furman mentioned the federal government doesn’t notify particular person firms of legislation modifications. That’s performed by publishing them within the Federal Register. Whereas bigger firms could have workers devoted to looking for these modifications, it’s difficult for smaller firms. Kemp has 10 staff.
Twenty years in the past, Kemp’s firm may have purchased dowels from almost 100 completely different U.S. mills, however he mentioned solely 4 or 5 are left, forcing him to purchase offshore. He could flip to some to purchase costlier poplar dowels if he doesn’t get reduction for the present funds due, whether or not that’s by way of monetary assist or an import exemption for white birch.
“We don’t essentially utterly disagree with the legislation itself,” he mentioned. “Twenty-five years in the past it most likely would have saved the wooden business, but it surely’s about 25 years too late, sadly.”
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