What Really Happens on the Ground When the US Slaps Tariffs on China

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  1. >Pittsview, Alabama, home to 1,000 people, has a corner store, a clutch of churches and an abandoned train depot. Emporia, Virginia, population 5,500, has a casino, strip malls and truck stops. They’re the sort of forgotten communities that make up much of rural America. But if you want to understand the depth of the economic rivalry between the 21st century’s two superpowers, the US and China, they’re good places to start.

    >The two towns sit on opposite sides of a yearslong tariff battle over a mundane product the global economy needs to keep moving: shipping container trailers. The 1950s invention of the 40-foot steel container revolutionized international shipping and helped supercharge globalization. Once those boxes hit land, they have to be attached to a trailer chassis— essentially a long, skeletal bed frame with wheels—so trucks can haul them, and the products inside, across the country.

    >During the pandemic supply chain mess, a shortage of trailers left stacks of containers stranded at ports, contributing to the inflation surge and cost-of-living crisis that became a political liability for President Joe Biden and still hangs over the US economy and this year’s election.

    >Pittsview and Emporia both have chassis plants that have made them central to a fight over tariffs on Chinese-manufactured trailers that’s ended up raising questions about who gets to fly the “Made in America” flag and avoid import taxes. The conflict isn’t political in the blue-state-versus-red-state sense—in a rare case of bipartisanship, Democrats and Republicans generally back tariffs to reduce reliance on China in critical areas like logistics. Republican Donald Trump’s election in 2016 and the support he drew from ­hollowed-out factory towns helped upend what had been a decades-old Washington consensus supporting free trade.

    >Having slapped tariffs on everything from steel to Scotch whisky, Trump is repeating the script as he runs for reelection, proposing a 10% to 20% tariff on all imports that would be imposed above yet more duties on imports from China.

    >His Democratic opponent, Vice President Kamala Harris, has dubbed it the equivalent of a national sales tax that would raise costs for the middle class. But the Biden administration kept Trump’s China tariffs and sought to limit the country’s access to advanced chip technologies, policies Harris appears set to maintain if she wins in November.

    >As most economists will tell you, tariffs are a messy business that usually result in the consumer paying the price. The story of Pittsview and Emporia shows just how surprising the consequences can be for the industries supposedly being protected.

    >The Pitts name looms large over Pittsview. Pitts Enterprises Inc.’s headquarters sits in a restored 19th century home with rocking chairs on its porch that once belonged to William Pitts, one of the town fathers. The community is occasionally ­mistaken for a ghost town because of a pair of single-story brick buildings—one a former bank and the other carrying the legend Pitts & Sons—that appear abandoned along the main drag. Just up the road, there’s the busier Pittsview Corner Market, where patrons can gas up and eat Krispy Krunchy chicken.

    >Like many properties in Pittsview, the vacant buildings are owned by members of the family that gave its name to the town, as is Pitts Enterprises, one of the largest employers in rural Russell County. Andrew Pitts founded the company in 1976 to build trailers for the local forestry industry and ran it until 2002 when his son, Jeff Pitts, the current owner and chief executive officer, took control.

    >Pitts makes trailers of its own design in its sprawling factory yard a mile from its headquarters. Axles, tires and other parts pile up around metal factory buildings, whose huge doors, when rolled open to move material in and out, expose the workers inside to the elements. Inside, along with robots and other machines, sit stacks of steel plates. They’re welded into I-beams to form the rigid backbone of trailers and bent, cut and shaped into other “subassemblies” such as the running gear that holds the axle, or the neck that connects the trailer to the truck.

    >“It is a rough, dirty job,” says Dustin Preslar, who started at Pitts over a decade ago as a welder and worked his way up to plant manager. “It’s hot in the summer, cold in the winter.”

    >The company got into the chassis market in 2017 and started selling 40-foot trailers under its Dorsey Intermodal brand. But according to JP Pierson, Pitts’ president, the expansion soon stumbled because of intense Chinese competition. By 2018, as cheap Chinese trailers flooded the market, Pierson says Pitts was shut out. “It really didn’t matter how low I went on the price,” he says. “I was not competitive.”

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