As of May 2019, the United States has imposed tariffs of 25% on $250 billion worth of goods imported from China. This has already resulted in price increases on many items, from the food you eat to the TVs that you watch in your home
– and on anything else made in China and imported to the United States.
The tariffs are also taking their toll on the colored mulch industry. They may be indirectly affecting everything from the cost and availability of raw materials needed to produce colored mulch to the equipment and parts that mulch producers are purchasing.
If the 25% tariffs are in place long term, it could have a number of negative effects on your mulch production operation, including:
- Rising prices for raw materials
- Outages at production facilities
- Further strain on the U.S. workforce
Iron oxide is one of the main ingredients in a variety of colored items, including house paint, cosmetics, and brown and red mulch colorant. A vast majority of iron oxide is produced in China, with very little of it made in the United States. Brown and red are two of the top three colors sold by Colorbiotics.
Outages and downtime
The tariffs have resulted in more work needing to be done when a product arrives at a U.S. port. The imported goods need to be inventoried and categorized so that the proper tariffs can be applied. Materials are taking longer to get through the ports and get shipped out to mulch production facilities, resulting in outages and downtime at facilities across the nation. Be sure to plan for additional lead times to help protect your operation’s productivity and profitability.
Further strain on the workforce
If the 25% tariff on Chinese imports lasts, it could lead to a need for producing more products and materials here in the United States. This would put an even larger strain on the U.S. workforce, which is already facing a worker shortage.