Stanley Black & Decker, hit hard by Trump’s tariffs, sees relief — but no big change — in Biden administration

Stephen Singer, Hartford Courant
·3 min read

Stanley Black & Decker Inc., which has been hit hard in trade wars with China following tariffs imposed by President Donald Trump, sees some relief, but no big changes when Joe Biden becomes president in January, Chief Financial Officer Donald Allan Jr. said Tuesday.

The New Britain manufacturer of tools and storage equipment could benefit from an improvement in the “hundreds of millions of dollars” if tariffs ease, he said in an online discussion with an industry analyst. If tariffs go away, “it would be a very significant positive to our company,” Allan said.

The total cost of tariffs to the company is about $300 million on an annual basis, he said.

Price increases, moving production and other actions have helped offset the impact of tariffs and continuing those polices will overcome tariff-related costs, Allan said.

“Over the long term we feel we mitigate a lot of the tariff impact, but that’s probably going to take about three years," he said. "The better strategy obviously for us would be for the tariffs to roll back and we see, in fact, a positive impact starting next year.”

Allan doesn’t believe big trade shifts are imminent.

“On tariffs we haven’t really seen much change there and I don’t expect there to be a change based on the current view of the election results,” he said. “If there is a change it could be positive but I’m not even sure that would happen in a Biden administration. I think they’ll continue to use that as a negotiation process with China.”

Still, he said he believes the likelihood of more tariffs with China “is probably a very low probability at this point."

Trump’s tariffs were part of his “America First” economic policy to pursue bilateral trade agreements rather than free trade agreements negotiated by groups of nations, including the U.S. Trump had insisted that the U.S. was coming up short in multilateral agreements.

Republican policy, which was upended by Trump, generally opposed tariffs in favor of trade unimpeded by barriers. Democrats, in contrast, have favored what they call “fair trade” that accounts for labor rights, environmental policy and other factors.

Analysts say Biden will have to steer through numerous Democratic Party interest groups as he navigates a trade policy. Labor unions seek job protections; liberals want action on climate change, lower drug prices and human rights; and farmers and U.S. corporations want reduced tariffs.

Biden hasn’t detailed his plans, but said during the presidential campaign he will work with European and other allies to pressure China to change its behavior.

In May 2019 Stanley Black & Decker warned that the escalating trade dispute between the U.S. and China was expected to raise tariffs to a cumulative annualized impact on the company of $250 million to $275 million from an initial $150 million.

It was forced to respond by raising prices and working with suppliers to partly limit the impact of tariffs.

Allan has been blunt when speaking of Trump’s tariffs. At a business meeting in Trumbull two years ago, he said tariffs, particularly a 25% levy on steel, aluminum and finished goods and retaliatory tariffs by China, were having a significant impact on Stanley Black & Decker.

Stephen Singer can be reached at ssinger@courant.com.

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