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NBC News
6 days ago
- Business
- NBC News
This cookware maker is bracing for steel tariffs behind a wall of pots and pans
Checkbook Chronicles Steel and aluminum tariffs are going to cost Heritage Steel hundreds of thousands of dollars a year. But Danny Henn, who runs the family-owned stainless steel cookware company, says it may have a competitive edge. Aug. 3, 2025, 2:06 PM EDT By Emily Lorsch Heritage Steel, a small, family-owned cookware manufacturer in Clarksville, Tennessee, is expecting to pay hundreds of thousands of dollars in tariffs this year. The company recently received a tariff bill of $75,000 on an order of handles, and the company's vice president of operations, Danny Henn, is anticipating another bill of closer to $200,000 for goods that will likely reach the U.S. this month. 'We're a pretty small business,' Henn said. 'Having that as an additional sort of surprise expense is not insignificant.' But even with that new cost factored in, Heritage Steel believes steel and aluminum tariffs could be good for the business. 'Just from the base economics of it, yes, we have to pay more, but others have to pay a whole lot more,' Henn added. Heritage Steel employs about 40 workers and has more than doubled its revenue since 2018. The company is up 60% in cookware sales since last year. While company leaders now have to rethink pricing and make adjustments in response to President Donald Trump's trade war, Henn said they're feeling optimistic. Business highlights Danny Henn's grandfather Donald Henn was a door-to-door cookware salesman after graduating from college. In 1983, he purchased a factory in Clarksville, Tennessee, and from there was born New Era, which later became Heritage Steel. 'My grandma and grandpa and my parents were always big people about cooking at home. The cookware was always there,' said Henn. From frying pans and skillets to stock pots, saucepans and knives, Heritage Steel sells about 50 different cookware products on its website and Amazon. The company also sells wholesale to independent gourmet retailers. 'We are happy and proud to be an American producer of goods.' Heritage Steel needs three main types of inputs to make its cookware, and about 75% of the company's materials are imported. The most important part and the largest cost is the five-ply cladded body, which includes a combination of stainless steel and aluminum. 'It's very specialized processing that it has to go through to get into this form,' Henn said. 'And so, because it is very specialized, there's not a whole lot of people that do it.' Tariff impacts Heritage Steel imports its cladded steel from South Korea, which will be facing a 15% tariff that Trump announced on Wednesday after the country made 'an offer to buy down' the 25% duty level he had previously set. The company imports its handles, made from pure stainless steel using a process called lost-wax casting, from China. Meanwhile, the company purchases the material for its stainless steel lids in the U.S. Those parts don't have to be cladded and are a more simple single layer of stainless steel that's more widely available. Heritage Steel had previously sourced cladded steel from U.S. vendors, but those providers have since exited the business, according to Henn. 'There's just not enough of a U.S. market for cookware manufacturing of this type … right now. There isn't a viable vendor for us to find.' Since the company only makes a handful of raw-material purchases each year, it typically has a large order coming in all at once, which set up the company nicely when the first 25% tariffs on steel went into effect earlier this year. 'We had a good amount of it,' Henn said, referring to the raw materials, 'so that gave us more time of being able to know we're going to be able to manufacture and sell a bunch of stuff without the tariff cost on it.' Henn said that wasn't a tariff strategy, but instead a benefit of his company's workflow. However, they knew that leeway wasn't going to last forever. Eventually it became time for Heritage Steel to order more materials. That first tariff bill was about $75,000, and Henn is expecting the next to be more than twice as much. Who pays? For Heritage Steel, there was never a doubt it would have to raise prices because of the tariff expenses. The question was how high would they have to go? 'We're happy and proud to be a provider of really high-quality cookware, but one that's more affordably priced than some of the others on the market,' Henn said. 'We want to continue to offer the best price we can, given our constraints.' As of Friday, the company had raised prices by about 15% on all of its products. Heritage Steel explained the increase in an announcement on its website, calling the adjustment 'fairly modest' considering the price of the company's input materials spiked at least 50%. 'Obviously, we can't bear the full impact of these cost increases,' Henn said, 'but we also don't want our customers to bear the full cost.' He expects these changes to negatively impact the company's profit margins, but as of now the extent is unclear. Henn believes the company has more flexibility than a lot of its competitors because Heritage Steel is only importing raw materials, not the full product, and manufactures in the U.S. That's why he expects the overall market disruption could be good for the company. 'They might have to do something closer to a 50% price increase,' he said of his competitors, 'because their entire cost of goods is going up by 50%.' For Heritage Steel, on the other hand, only the price of parts is up 50%, not the full product. Henn said it's all about finding the sweet spot: a fair amount to charge customers to compensate for the new costs while still being a price leader in the market. 'We're just doing our best to do good by our customer, not raise prices too much, do well by our employees, keep paying them well and try to stay competitive within the market.' Even though Henn is optimistic about this potential competitive edge, that doesn't mean he believes the Trump administration's tariffs are the right approach. What makes more sense to him, he said, is a change over a longer period of time. 'If there is something that would have a similar effect of giving incentives to bring more more industry back to the U.S., I think that would likely be a positive,' he said, adding that he believes the intent of the tariffs policy is good. 'The implementation is a little bit rocky,' he said. Henn declined to comment on his political views and whom he voted for in the presidential election. As for other options that could bring down Heritage Steel's tariff bill, that's something being discussed as well. While stainless clad cookware is the company's bread and butter, Henn and his co-owners are exploring a range of possibilities. 'If we had our full wish,' Henn said, 'we would be able to have a fully U.S.-based supply chain for our entire manufacturing process.' Emily Lorsch Emily Lorsch is a producer at NBC News covering business and the economy.
NBC News
26-07-2025
- Business
- NBC News
Kicking the can down the road on tariffs won't work for this Maryland manufacturer
Checkbook Chronicles Independent Can Company has raised prices twice this year already after Trump imposed 25% duties on steel in March, and then doubled them in June. July 26, 2025, 7:15 AM EDT By Emily Lorsch When Rick Huether strolls the floors of his four manufacturing plants — two in Maryland and two in Ohio — employees' typical greetings such as, 'Hey, how's the family?' have been increasingly replaced with, 'Hey Rick, should I be looking for a job somewhere else?' Huether, the CEO of Independent Can Company, has had to raise prices on customers twice this year and it's the third time since President Donald Trump's first term. 'It's frustrating,' Huether said of the Trump administration's ever-evolving tariff agenda, which now includes 50% import taxes on the foreign-made steel his company relies on. 'I can't run my business the way I want to run it.' Huether, a Republican, said he shares the administration's goal of reinvigorating American industry. 'We want to bring as much manufacturing back to this country as you can. And as a family, we made a strategic commitment to being the specialty can maker in America with American workers,' he said. 'We want to be here.' But according to Huether, Trump has made that harder to do. He said he has never voted for the president because he dislikes how he treats people and communicates, and his trade policies have caused headaches for his business operations. 'Chaos is our nemesis,' Huether said, echoing a concern many small business owners have voiced for months amid Trump's erratic tariff rollout: 'We can't plan when we don't have a vision of what's going on for the next two or three years.' Business highlights Independent Can Company's wares might already be in your cupboard. The Belcamp, Maryland-based family business, in operation since 1929, makes the packaging for everything from Wegmans' brand of Virginia peanuts to the Santa Claus tins filled with chocolates or popcorn that hit grocery shelves around the holidays. The company manufactures cans and other containers for popular consumer brands including Swiss Miss, Zippo and Titleist. One of its newest customers is the lip balm maker Burt's Bees. Independent Can Company — whose annual sales have averaged $130 million in recent years — used to have more than 30 domestic competitors in specialty can making, Huether estimated, many of which were family-owned businesses. Today there are just a couple left, he said. The company employs about 400 people across its four plants. A fifth, in Iowa, closed in 2024 due to what Huether described as a combination of clients' shifting packaging needs and Trump's first-term steel tariffs. He secured some exemptions from those levies at the time but still had to raise prices in 2018 by anywhere from 8-16%, depending on the product. Independent Can Company's manufacturing process relies on a highly specialized material called tinplate, a very thin-gauge, flat-rolled steel with an electro-coated surface of tin. Developed as a corrosion-resistant material safe for food packaging, tinplate supplies are limited — the product makes up only about 2% of global steel production, Huether estimated, and it's only roughly 1% of the steel produced in the U.S. Up until about 2007, Independent Can Company bought most of its tinplate domestically but now sources most of it overseas — the majority from Germany, along with Taiwan and South Korea — due to foreign suppliers' quality, service and price. The business adopted more efficient production systems starting in the 1990s, which included a new printing line in 2000 that uses a larger sheet size, boosting efficiency. The issue: steel coils large enough for that system aren't available domestically right now, partly because American steel companies haven't kept up with manufacturers' needs, Huether said. In addition, the materials Independent Can Company uses are about twice as expensive in the U.S. than in Asia and about 20% more expensive than in Europe, Huether estimated. Tariff impacts The cost squeeze is weighing on Independent Can Company as it struggles to rebound from a rough two years, amid pandemic-related supply-chain issues and cost swings. Those challenges left the company with a lot of expensive steel that it had to sell at a loss. But after tens of millions in capital investments, including in automation, Independent Can Company is finally settling into a new normal that Huether expects to put the company back on surer footing this year, tariffs notwithstanding. Still, access to affordable tinplate is non-negotiable and remains a wild card. That material alone represents 50-75% of its products' prices, Huether estimated. With tariff exemptions removed in March, Independent Can Company began paying Trump's 25% levies on all its imported tinplate, a steep new expense that Huether said forced the business to hike prices on some products by 8-16%. After the duties were raised to 50% in June, the company imposed another round of 8-16% increases. 'This adjustment is necessary to ensure that we can continue to provide you with the high-quality products and service you have come to expect,' Huether informed clients in a statement on the company's website earlier this year. 'We've really absorbed the amount of the tariffs that we can absorb,' he told NBC News. 'It's going to be passed through.' Bringing the shine back to 'Made in America' Huether is relieved that Independent Can Company hasn't lost business yet since the price hikes, but that worry is ever-present. There's a risk that some companies will switch to cheaper packaging, he said, including options that may not be as safe or recyclable. But it's hard to know how things will shake out… 'You instantly go to: Well, is this going to happen, or is it a tactic to get somebody to do something else? Is it real or not?' he said. In the meantime, Huether doubts whether rewriting U.S. trade policy can bring back American manufacturing overnight, or even in a few years. Huether believes in expanding vocational training in schools and eliminating the stigma often associated with certain career paths. 'We do not have the skills in this country to manage it,' he said, nodding to a reality that companies and analysts across a range of industrial sectors have underscored since the trade war began. 'It takes one to five years to get a full manufacturing plant up and running,' Huether said. 'We need time to do this.' What's more, 'We need predictability and consistency,' he added. 'We need to understand what the rules are. If the rules are constantly changing, we don't know how to play the game.' Emily Lorsch Emily Lorsch is a producer at NBC News covering business and the economy.
NBC News
29-06-2025
- Business
- NBC News
Can this game maker figure out Trump's China tariffs before they sink him?
Checkbook Chronicles Dan Linden developed a new table game and worked with suppliers in China to bring it to life. Now, he's unsure just how much tariffs will hit his bottom line. June 29, 2025, 8:03 AM EDT By Rob Wile Dan Linden likes games. He likes trying to figure out the answers. But one tricky puzzle has him stumped: What is the actual percentage he now owes for tariffs on toys and games imported from China? Linden, a 38-year-old Seattle resident, told NBC News he still doesn't know how much he'll have to pay to import the game he created and has staked his financial future on. 'I'm not a millionaire or anything,' Linden said. 'These $10,000, $20,000, $30,000 tariff hits are going to take a significant chunk out of my own pocket.' As it turns out, the entire toy industry is confronting the same problem. A representative for The Toy Association, the industry's chief trade and lobbying group, told NBC News it could not comment on the current tariff level because it was 'gathering new data about tariff impact on toy companies.' Linden estimates he's invested some $25,000 from his own savings to develop the game, Offshoots, a tabletop contest to see who can build out a 'tree' using wood-based, branchlike pieces without toppling the trunk. Think Jenga meets K'nex. He said he has plenty of orders lined up — and is racing to get more shipped across the sea before President Donald Trump changes his mind and increases the duty level. Business highlights After two years and two dozen iterations, Linden developed Offshoots into what he felt was a potential smash. He said it received rave reviews at a game expo in March and has won praise from other industry pros. Thanks to contacts made through his full-time job at a larger toy developer, Linden was able to work closely with Chinese manufacturers to produce an initial prototype of the game that worked out to a $29.99 retail price. Toy fair contacts said if he could get that down to $24.99 per game, he had a 'slam dunk,' Linden said. His first official sale came last July. Since then, he's sold about 2,200 — and has placed an order for another 2,500 that he hopes will not be fully subject to Trump's import duties. But the price point is hanging in the balance. Already, it's gone back up to $29.99 to cushion the potential tariff blow. 'My game is getting a really good response by the public so I have to stay the course and try to grow it,' he wrote in an email. 'However I feel like I am continuing to invest significant money and all it would take is another tariff increase to tank the whole thing.' Tariff impact Toys and games had previously been exempt from tariffs altogether. In his most recent social media post on the subject, Trump said duties on Chinese-made goods would be as high as 55%. In theory, that calculation incorporates the 30% in new tariffs Trump has imposed in his second term: 20% for fentanyl-related issues, plus the president's new 10% baseline. That 30% is added to the existing average tariff level of 25% on Chinese goods that was in place when Trump took office. But if toys and games faced zero tariffs before, what do they face now? Linden said he remains in the dark — but that the final answer could clobber his income from the game. Before Trump announced his China tariffs, Linden was seeing a 23% profit margin on Offshoots games sold through a distributor, and about 50% when they were sold directly to a retail shop. With 30% tariffs, that fell to 6% profit through the distributor and 39% through the retail shop. If he ends up having to pay a 55% duty, he said, he will have to rethink his entire distribution strategy. Looking ahead Linden's concerns ultimately go beyond getting his game off the ground. The company where he works his day job is also facing headwinds from the tariffs. Should something happen to it or his role there, Linden fears he won't be able to successfully transition into another field in what has been a gradually weakening labor market. 'I don't have the work experience to change careers very easily, so I've had a lot of fear over what happens if these tariffs put the toy company out of business,' he said. 'And then if they put the new game out of business, I don't have a lot of marketable skills outside of the toy industry, and I can't imagine people are going to be hiring like crazy anytime soon.' Linden said he has no objection to making the game in the United States and has even begun taking orders for a version that is American-made — though at a $5 higher price point. Linden said matching Chinese quality is significantly more expensive and more logistically complicated. He said he must string together disparate parts of the manufacturing process in the U.S. that, in China, tend to be under the same roof, or at least closely coordinated. In Linden's experience, consumers who like to talk about 'buying American' tend to ultimately choose the option that provides the most bang for their buck, wherever it happens to be made. Linden said a recent visit to another specialty toy fair showed his concerns about the state of the overall industry are widespread. 'It felt kind of spooky,' he said in a follow-up email. 'I think everyone in the business is aware of impending price increases, but almost no one was willing to talk about it. This uncertainty has a lot of people stuck in limbo waiting to read what the morning news will bring.' Linden said he hopes that by the end of the summer, 'something will change,' or at least there will be clarity about the final tariff number. Thoughts about the current administration Linden said he did not support Trump in the presidential election for numerous reasons, and was not surprised that the president has made tariffs the primary tool of his economic policymaking, given his campaign rhetoric. Still, he said he has been taken aback by the toll Trump has allowed the process to take on the business community. 'He said he was going to do all this,' Linden said. 'I knew what he was going to do. I guess he kept that promise at the expense of the businesses I'm involved in.' Rob Wile Rob Wile is a Pulitzer Prize-winning journalist covering breaking business stories for
NBC News
21-06-2025
- Business
- NBC News
How a high heel entrepreneur is handling tariffs before the other shoe drops
Checkbook Chronicles Haley Pavone testified to Congress that tariffs are crushing small-business owners' American dream. June 21, 2025, 5:07 AM EDT By Kayla Steinberg Haley Pavone thought this was going to be the biggest and best year yet for her footwear company. Based in Southern California, she had big dreams for Pashion Footwear, the online business she started as a 20-year-old college junior that sells high heels that convert into flats. Instead, she found herself imploring lawmakers for help as tariffs threaten to cripple her company. 'We went from duty-free status to paying actually 190% on average overnight,' Pavone told NBC News. In the months since President Donald Trump took office, the trade war has swung wildly back and forth. Tariff rates have, at times, changed suddenly and dramatically as U.S. officials seek deals with other countries. It has ensnared business owners like Pavone in a battle they didn't choose, as they struggle to plan for a future they can't clearly see. 'It has been chaos to say the least,' she said. 'It feels like small businesses are either being intentionally attacked or being completely forgotten. And I don't know which one is worse.' Business breakdown Pashion Footwear was born out of Pavone's own struggles with high heels. She loved wearing them but hated the inevitable pain that came with being hours on her feet. So in 2016, she founded Pashion. 'It's the biggest love-hate relationship in women's closets,' she said. 'And we're trying to change that.' Pavone's company has grown to employ 12 and has patents in the United States, China and the European Union. for its sole-support technology. And last year, Pashion made $9 million in gross revenue, up 88% from 2023. Pavone attributes much of that success to social media. She and the company have more than 2 million followers combined across TikTok and Instagram, with posts showing an array of heels transforming into flats with a quick twist and press. Tariff troubles For Pavone's small business, it has never been easy: between Trump's first trade war with China and then the pandemic — plus the ensuing supply chain crisis and recession. Pavone said this year she had expected her business to grow 150%, planned to hire several employees and was looking into wholesale. But then Trump eliminated the 'de minimis' exemption, which allowed items from China valued at $800 or less to come into the U.S. duty-free. The change took effect May 2. 'We went from making about 19-20% per shoe after all of our operating expenses to actually losing about $40 per shoe,' Pavone said. The Walnut Knit Booties that used to make the company $43.70 per pair, she said, turned into a $41.16 loss. After the U.S. and China agreed to a 90-day tariff pause, Pashion was left with tariffs of 36% to 75% on each product. The company has paid more than $50,000 in tariffs to U.S. Customs and Border Protection since the May 2 change. The company's shoes are manufactured in China, and Pavone said they can't be made elsewhere — though it's not for lack of trying. 'I've tried talking to manufacturers in Vietnam, Brazil, India and even one very small factory I was able to find in the U.S.,' she said. 'All of them have unanimously said that China is the only supply chain currently that can do what we need at scale.' And Pashion was hit hard by another rule change. Earlier this year, it qualified for and signed a $5 million loan from the Small Business Administration. Pavone planned to use that money to buy Pashion out of predatory debt it took on to survive the pandemic, invest in hiring and buy more inventory. But the Trump administration changed the qualifications to receive the funding, now requiring all shareholders to be U.S. citizens — and Pavone said her company raised 1.7% of its funding from international investors. The loan was pulled. 'We feel completely ignored, and we also feel completely out of control,' she said. 'It basically feels like we're just waiting for the other shoe to drop every second of the day.' Taking action The changes and uncertainty have dashed Pavone's big dreams for the year. She said she slashed inventory orders from $1 million for the fall and $1.5 million for the holidays to around $300,000 each, wanting to keep her budget open to assume tariff liability. 'This went from being a growth year to a year where we're really just trying to make ends meet and stay afloat,' she said. To handle the increased costs, the company added a tariff tax averaging $15 to $25 per product when U.S. customers check out. Demand from U.S. consumers has since dropped around 30%, Pavone said. 'There's plenty of customers where even though they understand what we're doing, they're now priced out of what they can pay, so they can't buy,' she said. She shared her frustrations on TikTok, breaking down for her followers exactly how tariffs are affecting the business. And at a hearing in May, Pavone explained to lawmakers just how painful the changes have been. 'Every day that these trade policies continue, it means the death of more American dreams,' she told lawmakers. 'This is not a short-term pain. This is the destruction of livelihoods, both for entrepreneurs and those they employ.' Pavone hopes her testimony could help lawmakers push for relief. 'No matter what happens, I at least know that I've fought as hard as anyone possibly could,' she said. Kayla Steinberg Kayla Steinberg is a producer at NBC News covering business and the economy.
NBC News
15-06-2025
- Business
- NBC News
He invented a viral watch-cleaning device. Now he says the American dream has been 'ripped out of my hands' by Trump tariffs.
Checkbook Chronicles Anthony Mendoza, a veteran Army major and father of two daughters, saw his invention as a pathway to entrepreneurial success, That dream is hanging by a thread. June 15, 2025, 8:04 AM EDT By Rob Wile President Donald Trump's April 10 announcement that he was raising tariffs on China to 145% left Anthony Mendoza shattered. The 41-year-old Phoenix resident, father of two and veteran U.S. Army major had stumbled onto an invention that allows amateur antique watch aficionados to gently rinse a timepiece's components. He named it ChronoClean, and the device began to go viral. By last winter, Mendoza had sold out of his first 500 units. Yet with a single social media post, the president seems to have dashed Mendoza's plans for the future of his business. 'I really felt like my American dream had been ripped out of my hands,' Mendoza said. 'And that our own president and government was letting it happen.' Business breakdown The ChronoClean had gained traction online among a fast-growing amateur community of antique timepiece tinkerers, especially abroad. Unable to locate an affordable manufacturer in the United States, Mendoza had turned to Chinese producers, which allowed him to sell the device for $150 each. 'I tried to get it built here — that's what I wanted to do initially,' Mendoza said of manufacturing the product in the U.S. 'But I went to several companies, and every one I went to said, 'No way, we can't do that, it would cost $300 each just to make it for you.' So it was totally out of the realm of possibility.' A boost from a popular YouTube account in the timepiece community helped. After accounting for costs, Mendoza estimated that he earned about $60,000 in profit. Tariff troubles After selling out of his first batch of 500 units last winter, Mendoza said he had dialed up another 500 on Valentine's Day for production. Two weeks later, Trump's tariff escalations began. The president first imposed a total of 20% duties on exports from China in early March. Over the next several weeks, the level would steadily rise until it hit a high of 145% in the second week of April. At that point, Mendoza thought he'd have to abandon the ChronoClean entirely, just as the second set of products was ready to ship. The duties would stay at that three-figure level for about a month more, shaking global markets and keeping Mendoza awake at night. Having recovered from a devastating divorce and still unable to find steady work after retiring from a 20-year career in the Army, Mendoza had pinned his entrepreneurial hopes on the success of ChronoClean. Finally, on May 12, the Trump administration announced a breakthrough after trade talks between the U.S. and China in Geneva. That agreement brought the duty level back down to what was initially announced as 30%. Mendoza jumped, telling his Chinese liaison to immediately ship the units. Even at the newly lowered tariff level, Mendoza's shipping costs doubled from $1,100 on the first batch of ChronoClean devices to $2,650 for the second. Looking ahead To this day, Mendoza must grapple with the uncertain environment Trump's on-again, off-again tariff pronouncements have created. As a backup plan, Mendoza says he has routed some orders directly to the U.K. to avoid the U.S. duties. But it's an expensive hedge: Mendoza said it cuts into his bottom line. He remains anxious about further escalations from Trump. 'If it goes back to 145%, I won't be able to import my next shipment into the U.S.,' Mendoza said. He has a lead time of about five months, and has to be able to make decisions with certainty. 'Because they are selling so well, I need to start working on my next order now,' he said. A closer look at this moment in time Mendoza describes himself as having 'strong political feelings.' 'I don't like the way things are right now,' he said. He called the Trump administration's insistence on moving vast manufacturing operations from overseas to the U.S. 'a slap in the face' to small-business owners. 'It sounds great if you don't understand how logistics work. For my product, the reason it sells is because it's the cheapest you can buy,' Mendoza said, pointing to the reality that affordable manufacturing outside of the U.S. helps him keep his prices low for customers. As a single parent, Mendoza is working to try to put his two daughters through college. Between those expenses and funding ChronoClean, Mendoza said his financial cushion is thin. It's all the more wrenching given what he's gone through, he said. 'It's like, 'You've been deployed, you started as a private, retired a major, got through a horrible divorce, you're a great father and now you've started your own business and invented a product people want — they're begging for it,'' he said of ChronoClean. 'Then here comes your own government to shatter that dream, so big businesses and Elon Musk can get richer," Mendoza said. "To me, that's not the American dream. It's small business, middle America, everyone should have a good chance at this. [The tariffs] will potentially put me out of business, it's hard to wrap your head around it.' Rob Wile Rob Wile is a Pulitzer Prize-winning journalist covering breaking business stories for
