This year may be the last for many, if not most, fireworks shows that have become hallmarks of America’s Fourth of July celebrations, unless President Trump backs down in his trade war with China.
White House threats to impose 25% duties on an additional $300 billion worth of imports from the world’s second-largest economy would affect a range of consumer merchandise, including pyrotechnics, that escaped the duties already covering $250 billion in goods.
“I don’t know of another industry in this country that would be affected like the fireworks industry would be,” said Sean Conn, vice president of legal for Big Fireworks in Lansing, Michigan. “There are no other options. We have to buy from China.”
In anticipation of the duties, companies from a wide swath of industries descended on Washington this week, urging Trump to change tack. The fireworks industry, which is pleading for an exemption, fears it could fizzle if retailers are forced to hike prices and lay off workers.
“It would have a catastrophic effect on consumer fireworks, especially because the entire industry, whether you’re a consumer or supplier or retailer, it’s very hard to survive,” Conn said. “This type of thing may effectively wipe out the industry.”
Officials in Washington and their counterparts in Beijing have spent the past several months working on an agreement that the United States hopes will further open Chinese markets to American firms and put an end to Beijing’s appropriate of trade secrets. When the talks reached an impasse in May, Trump more than doubled many of the tariffs already in place and threatened to go even further.
The president plans to meet with his Chinese counterpart, Xi Jinping, at the Group of 20 summit in Japan this month, and administration officials are optimistic the gathering between the two leaders will lay the groundwork for a successful deal. Or at the very least, prevent further trade war escalation.
Even with the meeting forthcoming, the president has suggested companies shift their manufacturing out of China to avoid the duties, but that’s not an avenue available to U.S.-based fireworks businesses.
The American Pyrotechnics Association estimates that 99% of backyard fireworks sold in the U.S. and 75% of professional displays are shipped from China, leaving sellers with little recourse.
“That’s a big reason why we don’t necessarily disagree with trying to level the playing field in terms of trade, but the wage and regulatory environment in America make it impossible to actually manufacture fireworks here,” said Larry Farnsworth, spokesman for the National Fireworks Association.
While the fireworks that will be used to celebrate America’s independence this year are already in the U.S. and spared from the duties, some businesses are considering raising prices in anticipation of the levies.
Bill Weimer, vice president of Phantom Fireworks Cos., said his business would struggle to absorb the 25% tariff and would likely have to alter the deals it offers to customers to compensate.
“The first thing that happens when the prices go up and we start to lose our business, our income goes down, and we can’t afford to employ so many people,” he said.
The Youngstown, Ohio-based company is one of the top three importers of fireworks in the U.S., Weimer said, and he estimated that 99.8% of its products come from China.
“We bleed red, white, and blue. We are American to the core, and I certainly want the administration to be successful in negotiating positive trade deals for the country,” he said. “But fireworks are neither intellectual property-based nor are they anything remotely related to high-tech modern stuff. These are made in rural areas by locals.”
In addition to hurting domestic fireworks retailers, Farnsworth, of the National Fireworks Association, said the tariffs could also take a chunk out of the revenue streams for nonprofit organizations, veterans organizations, and church groups that erect roadside pyrotechnic stands during the summer to raise money.
It’s those entities who are “going to be bearing the brunt of this,” Farnsworth said. “The people who sell fireworks are the very folks who make America great.”
