FARMINGTON — A family-owned wholesale and craft wood company in Farmington said they may get slapped with a $300,000 bill for unpaid tariffs on wooden dowel imports from China.
A Trump-era rule imposing tariffs on all wood moulding and millwork products from China went into effect last February, but Mark Kemp, president of Kemp Enterprises, said that the company only found out about it last week after receiving a call from a competitor based in Cincinnati, Ohio.
The competitor asked Kemp if they had also been “hit with these new tariffs,” Kemp said in an interview Thursday.
“And we said, ‘What are you talking about?’”
Kemp said the Ohio company, Cincinnati Dowel, had gotten a bill for approximately $600,000 on shipments they brought in over the previous few months.
It was shocking news to Kemp and his son, Vice President Shayne Kemp.
“We were never informed by anyone (government entity, customs, our freight forwarder, OCEANAIR no one),” the younger Kemp wrote in a Facebook post earlier this week. “None of our suppliers, customers, etc., have been enforced either (and still don’t know what is coming.) We have suppliers who could be put out of business overnight by dollar figures like this.”
While Kemp Enterprises buys 75%-80% of their products from domestic suppliers, white birch wooden dowels, “the go-to dowel for 125 years,” are no longer manufactured in the U.S., according to Kemp.
For the past couple of years, Kemp Enterprises has been importing them from China, one of the few places where they can find them, Kemp said. Most, if not all, of the other manufacturers he’s spoken to are not able to provide the volume that Kemp Enterprises needs for its business.
The tariff levies an additional 220% charge on the value of the wood products on top of an already existing 25% tariff on certain goods from China.
After hearing from the Ohio company, Shayne Kemp called their freight forwarder and customs broker, OCEANAIR, who informed them that Kemp Enterprises would have to pay approximately $300,000 to Customs and Borders Protection by this coming Monday.
“But we still haven’t heard from Customs or anybody,” the elder Kemp said.
The Kemps hired a lawyer, New York-based attorney Richard Furman. Furman told the Bangor Daily News that the onus to learn about new laws is on companies, not the federal government. Unlike the 10-person Kemp Enterprises, larger companies are able to hire people specifically to keep track of changes to federal trade regulations.
While the company waits in tariff-imposed limbo, they ultimately decided to pay about $30,000 to send a container of products that was on the way to the U.S. from China. They had already paid about $60,000 for the products but it was cheaper to pay for the extra freight to return it than the 220% tariff if it made it all the way to the U.S.
“And it was not all just white birch dowels,” Kemp said. “So we lost a lot of product we could have legally brought in.”
The Kemps have also contacted Maine’s legislative delegation for help.
In a joint statement, U.S. Rep. Jared Golden and Sens. Susan Collins and Angus King said they spoke to the Kemps last Friday.
“After hearing directly from Kemp Enterprises on Friday about their tariff issue, the delegation fast-tracked a call with the International Trade Commission on Monday to discuss this issue. The offices have also been in contact with federal agencies, including the Department of Commerce and Customs and Border Control, to seek additional information.”
Shayne Kemp wrote in the Facebook post that he has also been in contact with state Rep. Scott Landry, whose district includes Farmington and New Sharon. Landry was not immediately available for comment.
In perhaps an ironic twist, Mark Kemp said the tariffs would have been “more than welcomed by everybody in the wood industry” 20-25 years ago.
That’s because when the World Trade Organization granted China “most-favored-nation” status in the late 1990s, it put most New England wood mills out of business, Kemp said.
“When they were given favored nation status, over the next six to eight years, we probably lost, I’m going to say 60 mills — 60 manufacturers in Maine, New Hampshire and Vermont.”
And because of that, Kemp Enterprises is forced to go overseas, bringing in four containers of white birch dowels from China each month.
They’ve only had positive experiences with their supplier in China, Mark Kemp said, but these new tariffs create an unknown future for the family-owned business.
“It’s going to hurt our company without a doubt. And what the congressional people are trying to do is just get us a payment plan,” he said.
“Any company that’s got to come up with two-, three-, four-hundred thousand dollars on demand is going to be hurting.”
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