Tariffs: A Boon for Some Businesses, But a Blow to Others’ Inflation Levels

At the Kitchen & Bath Industry Show in Las Vegas in 2005, an American kitchen cabinet maker was faced with unfair Chinese competition face-to-face for the first time.

A Chinese man was selling cabinets using the American business owner’s marketing brochure.

Paul Wellborn, the owner of Wellborn Cabinet, recognized the Chinese man—he had visited Wellborn’s factory in Alabama not long prior, posing as a prospective customer. Wellborn confronted the competitor.

“He just laughed and said: ‘We sell Gucci purses. We make all this stuff, and nobody can do anything about it,’” Wellborn recalled.

Wellborn said this encounter provided him an “incentive” to “fight for what’s right.” He paid about $14,000 in legal fees to ensure the man would stop using Wellborn brochures. Then, almost 15 years later, when he realized that his business was at risk due to Chinese cabinet dumping, he sought tariffs for self-protection.

That’s when he crossed paths with former President Donald Trump. In 2017, he met with Trump in Milwaukee regarding those challenges.

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During this election season, Trump has repeatedly mentioned the kitchen cabinet industry as a beneficiary of tariffs he implemented during his first term.

The Republican presidential nominee said, if reelected, he would impose a universal 10 percent tariff on all imports and a 60 percent tariff on those from China.

Tariffs have been a contentious issue in this election.

When announcing the new rates in May, President Joe Biden said the tariff increase would protect American industries from “China’s policy-driven overcapacity that depresses prices and inhibits development.”

During the annual meeting week of the International Monetary Fund (IMF) and the World Bank in late October, Treasury Secretary Janet Yellen reiterated her concerns regarding China’s industrial overcapacity. She said China had yet to solve the fundamental issue she emphasized during her trip to Beijing in April—that China was producing more than its domestic demand and dumping cheap products worldwide.

Meanwhile, voters have mixed views.

Trump has continued championing tariffs on Chinese goods, despite the criticism.

“The most beautiful word in the dictionary is tariff,” Trump told the Economic Club of Chicago on Oct. 15. “It’s my favorite word.”

At the same event, he said he met a cabinet maker who told him, “Sir, China and South Korea are building kitchen cabinets for a third of what I can make them … I can’t compete.”

A few years later, the same person told him, “You saved my company when you did the tariff, and you saved thousands of jobs. My company is now doing very well.”

Wellborn believes Trump was referring to him. Although it’s difficult to confirm, his story matches up.

Wellborn Goes to Washington

After the first encounter in 2005, Wellborn Cabinet, headquartered in Ashland, Alabama, survived the Great Recession between late 2007 and mid-2009—when many American households couldn’t pay their mortgages—by offering a broad range of products.