Pennsylvania company sees Trump boost, hopes for help on trade
Maybe it was Donald Trump's promise to fast track the Keystone XL and Dakota Access pipelines, or his pledge to cut corporate taxes and regulations.
Then again, perhaps it was the possibility of a major infrastructure construction program.
Whatever the reason, TorcUp founder and CEO John Kovacs has noticed a significant change in his business since the start of 2017, a renewed confidence among his customers, mostly in the pipeline and energy industry.
"We are already seeing it," Kovacs said, relating a call he had recently with one of his salespeople in Louisiana.
Forks Township-based TorcUp makes hydraulic and pneumatic wrenches used primarily in the energy industry. In recent years, as oil prices dipped and U.S. oil and gas drilling slowed, his customers had begun renting rather than buying his equipment, uncertain about the future. In recent weeks, that has changed.
"I had three quotes in the Louisiana territory alone," he said. "My phone calls are turning from rentals to purchases."
Trump has made a promise to "unleash America's $50 trillion in untapped shale, oil and natural gas reserves" a key plank in his administration's America First Energy Plan. That seems to be benefiting TorcUp.
Kovacs says he isn't political. He's waiting to see how much the Trump administration's trade polices help his company. He does a lot of business overseas, but TorcUp is constantly battling trademark and patent infringement in places such as China, Brazil and even the Middle East.
When it comes to China, in particular, Kovacs said the playing field is grossly uneven.
"My main focus is on fair trade," he said. "We export our products, and we design and I have patents here in the U.S. on the design of these tools. And they are counterfeited in China. They sell it to the U.S. and the tariff and duty is 5 percent."
Yet when TorcUp sells its American made-and-sourced products in China, it faces a 35 percent tariff, he said. He'd like to see that playing field leveled a bit.
Based on early indications from the Trump administration, companies such as TorcUp could get some help in the battle against foreign competitors in the U.S., said Tim Charlesworth, an attorney at Fitzpatrick Lentz and Bubba who specializes in international trade.
Trump has talked about imposing a border tax on products coming into this country, he said, that would "make the imports more costly to U.S. companies," he said.
It wouldn't do much to help companies like TorcUp sell their products in China, he said, because that country's tariffs wouldn't be reduced. China could also challenge any border tax by filing a complaint with the World Trade Organization.
The $15 trillion U.S. economy is so diverse that changes in U.S. economic policy will have a wide range of effects on businesses, creating winners and losers depending on the industry, said Roland Kushner, Muhlenberg College economics professor.
In the case of a border tax, companies such as TorcUp are likely to benefit, he said. Who loses out? Consumers who like buying inexpensive goods at places like Target and Wal-Mart.
"In general, if import taxes go up, it will work through the economy and consumers will pay it, period," he said. "If companies have to pay more to bring goods into the country, they will pass some of those costs along."
There's not a whole lot more the U.S. can do to police trademark infringement in other countries other than pressuring its trading partners to crack down, but Trump seems to be the kind of president who would ratchet up that pressure, Charlesworth said.
Generally though, it's so early in the Trump presidency, the people and companies Charlesworth with whom deals in his practice are taking a wait-and-see approach to the new administration.
"I'd say there is a mix of sentiments because we are still not sure how things are going to shake out," he said.
That uncertainty can itself be an impediment to business investment, Kushner said.
"Business owners want stability, they want to know what is going on," he said.