YOUNGSTOWN, Ohio – John Miles, president and CEO of Steelite International, sits casually in his office downtown. Behind his desk is a tall piece of drywall stamped with maker’s marks renowned worldwide for tableware – Grosvenor Fine Bone China, Dunn Bennett & Co., for example – English brands that reflect the apogee of British colonial rule and global trade during the late 19th century.
Steelite, a company established in England in 1983, but whose international headquarters is today based in Youngstown, can trace its roots to these brands. What has remained consistent is Steelite’s global footprint, which includes manufacturing operations in Europe and Asia, and some light manufacturing in the United States. Furthermore, the company sells to customers in the restaurant and hospitality industry across 145 countries.
Steelite manufactures and sells tableware such as dishes, cutlery, silverware, glasses, buffet equipment, table lighting and other products in the global market. As such, the nature of its business makes it vulnerable to the current volatile international trade environment, mostly driven by the Trump administration’s tariff policies.
“It’s very impactful,” Miles said. “It’s millions and millions of dollars of our business.”
The Trump administration in April levied a standard 10% global tariff on goods shipped to the U.S., plus additional tariffs targeted at specific products and countries, such as a 25% tariff on foreign automobiles and a 25% tax on steel and aluminum.
Steelite has manufacturing operations in China, for example, and tableware produced there and shipped to the U.S. incur not only the 10% tariff, but also another 20% penalty on items produced in China that was enacted by the Trump administration, Miles said.
However, there were sizable tariffs already in place on these products before the latest rounds of trade actions, Miles said. “What most people don’t understand is that there was a large tariff to begin with on a lot of these products,” he said. “These are just stacked on top of what is already a big tariff for us.”
Miles said that in 1977, Congress approved a 45.5% tariff on imported tableware items to protect domestic manufacturing. That tariff was gradually reduced every two years by half a percentage point. But the policy had little to no effect as it didn’t prevent production moving overseas.
“In 1977, the United States had 14 domestic manufacturers that made ceramics for hotels and restaurants,” Miles said. “By the early 2000s, all 14 manufacturers had gone out of business.”
By 2017, the tariff on imported dinnerware from China stood at 25.5%, Miles said. During the first Trump administration, the tariff was raised by another 7.5%, bringing the total import tax to 33%, he said. “Now with the 20% tariff and the 10% universal tariff, it’s 63%,” he said.
Coping with Tariffs
The policy has caused companies affected by these tariffs to rework their business strategies, Miles said, which includes shifting production to other countries with less onerous trade barriers such as Vietnam, India and Cambodia. Such moves, however, require investment such as retooling, which chips into Steelite’s ability to reinvest in the U.S., he said.
“Instead of investing in wages and buildings here, I’m spending money retooling production in other countries where the tariff is less than China’s,” Miles said. “That’s certainly one of the things that is impacting us heavily.”
Tariffs could also impact how businesses engaged in importing finance their operations, Miles said. Banks, he noted, are more likely to reduce lines of credit because of the volatile trade market. “We’re a big company, so it’s less impactful for us,” he said. “When you look at a lot of the smaller guys, a lot of them are getting hit with credit line cuts, and it’s creating a tremendous amount of stress and pressure.”
A recent survey conducted by the Federal Reserve Bank of Cleveland shows that 70% of the 122 company respondents believe tariffs would have a negative impact on business over the next six months. Twenty percent responded they anticipate no impact, and 9% reported the tariffs would produce positive outcomes.
Across the region’s manufacturing sector, 63% of the respondents said they anticipated a negative net impact; 11% said tariffs would have no impact; and 25% replied that the tariffs would be beneficial over the next six months.
Finding a Solution
Miles was among a delegation of 50 business representatives from the Mahoning Valley who participated in the Youngstown/Warren Regional Chamber’s annual Washington D.C. Fly-In last week. There, Miles and others were provided an opportunity to meet with the region’s elected representatives and Trump administration trade officers.
“I don’t think there’s a good understanding of the impact and severity that the tariff policy is having on businesses,” Miles said. “I don’t think it’s well understood throughout Congress.”
Miles said the current policy is unlikely to create any new jobs in his industry or reshore manufacturing to the United States. One solution is to adopt a policy that would remove stringent tariff barriers on companies, provided that these companies make a commitment to building new factories in the U.S. and hire more workers.
“The tariff piece is only half of it,” he said. “The other half is incentives to manufacture here.”
For example, should a company that employs less than 1,000 people make a commitment to build a new manufacturing plant that creates a minimum of 100 new jobs over a 48-month period, then the government could eliminate the company’s Harmonized Tariff System code, which designates tariff levels, he said.
“If that were the case, we’d build three factories here in Youngstown,” Miles said. “You’d have more industrial construction than the country has seen in 100 years.”
Tariffs were a main topic of discussion among the delegation that visited Washington on June 25 and 26, added Guy Coviello, president and CEO of the Youngstown/Warren Regional Chamber.
“We exchanged some really good, probable ideas,” Coviello said. “Policymakers were very attentive to learning about some of the unintended consequences. I do think that there’s a path to using tariffs in a very productive way.”
One idea, in particular, was to use revenue generated from tariffs and place it into a fund governed by the U.S. Small Business Administration for an onshoring grant program. “So the companies being tariffed can use the money to start producing the product they’re importing,” Coviello said.
Others included advocating temporary exemptions on some products, with the understanding that companies that manufacture these goods overseas would begin domestic production, he said. Once that occurs, that exemption would become permanent.
“What we discovered is that there was a willingness to receive that information and bring that back to the decision-making tables,” he said.
Moving Forward
Meantime, companies such as Steelite International are engaged in the complexities of navigating a trade environment that is ever-changing. At present, the Trump administration is negotiating with 18 global trading partners in an effort to reach new agreements to prevent higher tariffs. Initially, President Donald Trump had set a deadline of July 9 to reach these agreements, but officials on Friday indicated that trade talks could extend until Labor Day.
Steelite International employs 120 people in Youngstown and another 240 at its light manufacturing and distribution center in New Castle, Pa., where it broke ground on a $50 million expansion project in January. The company also operates a showroom in the Commerce Building in downtown Youngstown.
Worldwide, Steelite employs approximately 1,700 people, including its North American operations.
Despite headwinds produced by international trade issues, business remains strong for Steelite, Miles said. “We continue to really thrive,” he said. Part of this business, however, is the result of gaining market share from smaller companies that have found it too difficult to remain competitive, he said.
Still, the inconsistency brought on by tariffs have compromised how businesses plan for the future, which impacts potential expansions, Miles added.
“The most important point is that the importers are the manufacturers,” Miles said. “If you cost me millions of dollars in additional tooling and you stress my line of credit, you increase my cost; you decrease my profits; you force me out of investing in new products. Then I’m not going to build a manufacturing plant here,” he said. “That’s the effect on most of us today.”
Pictured at top: John Miles, president and CEO of Steelite International.