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Kevin French
Updated: 3 hours ago
News analysis
Maine businesses navigate new reality of tariff whiplash
Photo / Jim Neuger
Container ships come in and out of Portland's International Marine Terminal on a daily basis.
Will he or won’t he? President Donald Trump’s on-again, off-again tariffs are turning longtime allies into foes and throwing Maine business owners and economic prognosticators for a loop.
“It’s difficult enough to be operating a small business, and then the uncertainty just makes it that much harder,” said Dave McConnell, co-founder of Three of Strong Spirits in Portland.
The craft distillery, staffed this time of year by five full-timers and five part-timers, makes and sells bottled rum and canned cocktails. Bracing for higher aluminum prices under new import taxes, Three of Strong recently placed a can order from its vendor in St. Louis.
"We're OK for now, but who knows what the future will bring?,” McConnell said. “We’re just going to keep our heads down and keep on doing what we’re doing.”
Trading barbs
On Friday, a day after announcing a one-month reprieve on 25% tariffs on Canada and Mexico for goods covered by a regional trade pact Trump negotiated during his first term, the U.S. president threatened new restrictions on Canadian lumber and dairy products.
The delayed measures, set to kick in April 2, are aimed at punishing America’s top trading partners for allowing illegal drugs and immigrants into this country in what the president describes as an “extraordinary threat” to U.S. national security.
More tariffs are coming, including a 25% tax on steel and aluminum imports expected to be announced on Wednesday, new “reciprocal tariffs” on April 2, and 25% tariffs on imports from the European Union — a 27-nation bloc.
In a Sunday TV interview with Fox News, Trump said that the U.S. “may go up with some tariffs,” without spelling out what or when. “Our country has been ripped off for many decades … and we’re not going to be ripped off anymore.”
From construction's front lines
At Scarborough-based Landry/French Construction, Chairman and CEO Kevin French said that his company is doing its best to avoid unnecessary costs. However, the new climate of uncertainty “is what keeps me up at night,” he said.
“Is the current president using tariffs for ‘The Art of the Deal’ or will there be another situation next month and the tariffs will be cancelled? I don’t know,” he said. “I’m not an economist, I’m not a politician. I can only deal with what is being dealt to us.”
Landry/French, an employee-owned company, has 85 employees in Maine and close to 40 in Florida. It has not seen any projects cancelled or delayed due to tariffs, according to French. In the meantime, the company is getting queries from clients about costs and pressure to start some jobs earlier, he said.
Government clients include Maine’s Bureau of General Services, which recently accepted Landry/French’s $108.8 million bid to build a consolidated middle school for Windham and Raymond.
“We asked the state about tariffs and how to account for that, and they told us to account for it within our bid,” Landry said.
While making those estimates was complicated, changing circumstances could also work in the builder’s favor.
“If the tariffs are cancelled, I would have a good windfall,” French said, though “I would rather have seen the state give us a number for what the tariffs would cost.”
Landry/French expects to start on the school project in another week or two — by which time there may be several more fits and starts on the trade policy front.
New world disorder
Trump’s trade war goes well beyond Mexico and Canada.
Taking on China as well, the Republican has increased taxes on imports from China to 20% for “intellectual property theft, forced technology transfer and other unreasonable behavior,” while vowing to tame domestic inflation he blames on his Democratic predecessor.
“As president, I’m fighting every day to reverse this damage and make America affordable again,” Trump said in last week’s address to Congress.
Countries have responded with immediate retaliation, with Beijing slapping a 15% tariff on major U.S. farm exports including chicken, pork, soy and beef, and Canadian Prime Minister Justin Trudeau threatening tariffs on more than $100 billion of U.S. goods.
Trudeau is also discouraging Canadian tourists from visiting popular U.S. summer destinations, including Old Orchard Beach in York County.
Curtis Picard, president and CEO of the Retail Association of Maine, said the Augusta-based trade group is concerned about tariffs for a number of reasons.
"With Maine being a northern border state, the Canadian tariffs will have a more palatable impact on states like Maine," he said. "Fuel, lumber and tourism will be impacted for sure.”
Maine exporters caught in the crosshairs include Auburn Manufacturing Inc., a Mechanic Falls-based maker of high-performance textiles for extreme temperature protection.
“Our worry is the retaliatory tariffs that may make our exports too expensive for our many customers in Canada and Mexico,” said Kathie Leonard, the company’s president and CEO.
Economic fallout
Photo / Courtesy Maine Center for Economic Policy
Garrett Martin
Garrett Martin, president and CEO of the nonpartisan Maine Center for Economic Policy, warns of repercussions across several sectors in Maine from tourism to housing construction. He also questions the logic behind Trump’s fixation on balance-of-trade data and that anywhere the U.S. has a trade deficit means this country is being wronged.
“That’s not the way to evaluate the situation,” Martin said. “It’s the meat-cleaver approach to tariff policy.”
Amir Mousavian, a supply chain expert and an associate dean at the University of New England College of Business, said that potential energy supply disruptions from Canada could further strain Maine businesses and households.
He also cautions that reduced tourism from Canada could lead to job losses and lower consumer spending though it’s hard to make long-term forecasts given too many variables in flux.
"Policy decisions have been changing rapidly, with pauses, restarts and shifting strategies, making it difficult to predict lasting impacts,” he said. “This ongoing uncertainty could lead to hesitation in business investments and hiring, further slowing economic growth in the state.”
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