Knee – Jerk Reactions Have Consequences
Increasing tariffs can cause uncompetitive US suppliers.
First, I do not know the exact composition of the ABS material. The point being made here is there are no domestic sourcing alternatives with the capacity to supply Genova Pipe and four other owner-operated businesses. The closure of one US ABS supplier the 2nd qtr. 2025 leaves the one remaining facility in the US to supply the necessary resin. That one US supplier is probably at capacity. So for US ABS Plastic component suppliers, they have to buy resin from companies outside the US. If Trump makes imports more expensive, the ABS component molders left with higher material costs. In which case, they can not compete, are uncompetitive with foreign molders, will lose business, and go out of business also. Read on . . .
“Plastic Pipe Maker Joins Lawsuit Challenging Trump Tariffs,” Plastics Today
The Liberty Justice Center is suing the Trump administration’s authority to unilaterally issue across-the-board tariffs without congressional approval on behalf of five owner-operated businesses, including Genova Pipe, a Salt Lake City–based extruder of ABS pipe. The company uses imported resin from South Korea and Taiwan, and the tariffs have increased raw material costs at its Washington state factory, which primarily exports to Canada.
Misuse of emergency act, plaintiffs claim
Filed on April 14 in the US Court of International Trade, the lawsuit challenges the use of the International Emergency Economic Powers Act (IEEPA) to justify the “Liberation Day” tariffs announced by Trump on April 2, and then suddenly paused for 90 days a few days later, as well as tariffs on Mexico, Canada, and China.
“Under that law, the president may invoke emergency economic powers only after declaring a national emergency in response to an ‘unusual and extraordinary threat’ to national security, foreign policy, or the US economy originating outside of the United States,” explains a press release on the Liberty Justice Center website. The lawsuit argues that the justification — a trade deficit in goods — is neither an emergency nor an unusual or extraordinary threat. “Trade deficits have existed for decades, and do not constitute a national emergency or threat to security. Moreover, the administration imposed tariffs even on countries with which the US does not have a trade deficit, further undermining the administration’s justification,” notes the release.
The IEEPA does not authorize the president to impose across-the-board tariffs — it does not even authorize tariffs at all — and even if the IEEPA did extend such power to the president, that would be an unconstitutional delegation of Congress’s power to impose tariffs, according to the center.
No domestic sourcing alternatives available to Genova Pipe
The tariffs are devastating small businesses across the country, according to the Liberty Justice Center. Genova Pipe, which is a party to the lawsuit, operates seven manufacturing facilities across the United States. “With limited domestic sources, we rely on imports to meet our production needs,” said Andrew Reese, president of Genova Pipe, in a prepared statement. “The newly imposed tariffs are increasing our raw material costs and hindering our ability to compete in the export market.”
Genova Pipe cannot domestically source the raw materials, including plastic resins, and manufacturing equipment it needs to produce its American-made plastic pipe, conduits, and fittings, the company said in the filing. There are only two US producers of ABS resin suitable for the products that Genova makes, and one of them is shutting down and the other is unavailable to supply the company.
“With over 75% of global ABS resin production concentrated in Northeast Asia, Genova Pipe is dependent on imports to continue its manufacturing operations,” said the filing. “The tariffs will directly increase the cost of raw materials, manufacturing equipment, and resale goods imported from abroad by Genova Pipe. And its Canadian customers may opt for local suppliers who are not subject to the tariffs, potentially resulting in a large loss of revenue.
The other businesses taking part in the suit are VOS Selections, a New York–based importer and distributor of alcoholic beverages; FishUSA, an e-tailer specialized in fishing tackle and related gear; MicroKits, a maker of educational electronic kits and musical instruments in Charlottesville, VA; and Terry Precision Cycling, a Vermont-based brand of women’s cycling apparel.
INEOS announces closure (2nd Qtr 2025) of INEOS ABS facility, Styrolution Portal
“’Over the past few years, we have seen the ABS market become increasingly competitive, particularly with growing competition from overseas imports,’ said Steve Harrington, CEO of INEOS Styrolution and INEOS ABS.
‘After a thorough analysis, we concluded the substantial investment needed to continue operations and achieve profitable cost competitiveness makes this site no longer economical. This difficult yet necessary decision is driven primarily by external market conditions and is not a reflection of the performance or dedication of our team in Addyston.’
INEOS, through its Styrolution business remains dedicated to serving the North American ABS market and will continue to serve affected customers from our other production facilities in North America and within its global footprint.'”
INEOS closing a resin plant is forcing domestic users to buy the ABS resin from foreign suppliers. If the Gov really wants to solve the competition issues with foreign competitors, pay for some of US company costs in the US. Costs such as healthcare, dental, etc. Much of which is paid for in other countries.