HOLLAND, Mich. – Since buying First Class Seating just three years ago, and aided by a cultural trend toward a more immersive movie-viewing experience, Chuck Reid has built up his company's staff from 15 to 40.
First Class Seating, recently featured in the New York Times, is a Michigan-based manufacturer of oversized leather seats equipped with motorized recliners for movie theaters.
Now, proposed trade tariffs from President-elect Donald Trump could negatively impact First Class Seating and other American manufacturers who import goods from China.
Trump, who won the White House in part by promising to bring manufacturing jobs back to the U.S., has established China as a symbol of unfair trade practices and has threatened to implement 45 percent tariffs on imports from the country.
The tariffs could be a burden to companies who manufacture their products in America, but import a part of their supply chain from China.
Reid estimates that a 45 percent tariff could raise manufacturing costs at his shop by as much as 20 percent.
Reid says that while tariff would be even worse for his competitors who import more from China, his company would be weak to competition from Mexico and Australia, who would be free to utilize China’s supply chain without fear.
Trump’s economic advisor Peter Navarro told the New York Times in an email that imposing steep Chinese tariffs was a necessary step in addressing the trade deficit with China, which reached $365 billion in 2015.
Navarro described the tariffs as an opening gambit, not an endgame, to bring trade back into balance.