Element Electronics gets its tariff waivers, will stay in business

• Waiver targets Element's TV parts affected in July by new tariffs imposed on imported Chinese components
• Tariff exemption process is complex, says the U.S. chamber
• President's supporters say tariffs part of a larger strategy to improve U.S. trade
• Tariffs could have a $3.2 billion impact on trade in SC

Even as an additional $200 billion in tariffs on Chinese goods are set to go into effect Monday, a South Carolina assembly plant has gotten a pass on paying import taxes on the Chinese flat screens it says it needs to continue making television sets.

Element Electronics, which employs 134 people at a plant in Winnsboro just north of Columbia, announced in early August that the tariffs President Donald Trump's administration had imposed a month earlier on $34 billion in Chinese components had made the cost of making their TVs too high. 

More:

        ►South Carolina's first tariffs casualty: Television factory in Winnsboro closes, lays off 126

        ►Tariffs on TV parts could cost Winnsboro, an SC town that's struggling against poverty

        ►Why Trump tariffs hit this rural South Carolina town especially hard

The TVs' four main parts, all imported from China, include a screen that makes up 70 to 75 percent of their cost. Several of the parts were already subject to 4.5 percent tariffs before the administration bumped those up another 10 percent or more.

At the time, it was the first plant in South Carolina to announce it would close because of the new tariffs. Citing already razor-thin profit margins before the tariffs, plant officials had said they would have to start laying off workers on Oct. 5 if they were unable to get a tariff waiver on parts to make flat-screen TVs. 

Political intervention

Company, state and local leaders worked together since early August, urging the White House to waive tariffs affecting the plant.

Brian Symmes, spokesman for Gov. Henry McMaster, confirmed in an email Tuesday evening that the plant had secured the waivers and would stay open. He said the governor had called the company's owner, Mike O'Shaughnessy, to discuss the waivers. 

“The governor has said from day one that we needed to exercise patience throughout this process and most of us have done that," Symmes wrote. "This is great news for Fairfield County, Element Electronics, and all of Team South Carolina that worked hard to make sure the facts were known and that Element’s case was made to the administration.”

The process for exemptions has not been easy, with hangups in the approval process, objections raised and the lack of a rebuttal process, according to the U.S. Chamber of Commerce's Kris Denzel.

The governor's Democratic opponent in November, James Smith, took time out from an event in Spartanburg to respond to the news, which he called "truly wonderful."

Smith also said that Element's tariff waiver amounted to "dodging a bullet," and he continued his criticism of the governor for not speaking out more against tariffs.

"The bullet should never have been aimed at them to begin with," Smith said. "Henry McMaster should still stand up against the tariffs themselves, which are aimed right at the heart of South Carolina’s economy.”

The president's supporters, including McMaster and U.S. Sen. Lindsey Graham, have suggested Trump is playing a long game, using tariffs and America's huge economy to pressure other nation's into better trade deals. 

In addition to a modernized NAFTA deal and a more level playing field with China, a 10 percent European tariff on American cars could go away if Trump prevails, Graham told a group of Upstate chamber members two weeks ago. Currently, the United States imposes a 2.5 percent tariff on European cars.

"The trade dispute is hot, it's ugly, but I think it's going to turn out OK," Graham said. "Somebody had to do something, and Trump's doing something."

Impact in South Carolina

Still, South Carolina's export-heavy economy could suffer a $3.2 billion impact to its economy amid the current trade war, which has drawn retaliatory tariffs on American goods from China, Mexico and Canada, according to the pro-business U.S. Chamber of Commerce.

In an Aug. 6 letter to the South Carolina Department of Employment and Workforce, the vice president for human resources at Element Electronics, Carl Kennedy, squarely laid his company's troubles at the foot of tariffs.

"The layoff and closure is the result of the new tariffs that were recently and unexpectedly imposed on many goods imported from China," Kennedy wrote at the time.

The combined $250 billion in tariffs that the Trump administration has and soon will impose on Chinese-made products affects roughly half the goods — including popular consumer productions — that China ships into the U.S. 

This comes on the heels of broad import tariffs on washing machines, solar panels, steel and aluminum earlier in the year.

Element is the nation's only television assembly plant, employing 134 people. It is owned by the O'Shaughnessy Holding Co. out of Minnesota and makes five flat-screen TV models primarily for Walmart.

The workforce in Fairfield County numbers fewer than 10,000 people. The Element plant's target staff size — 500 workers (it has not yet reached that size) — would  comprise 5 percent of the total workforce there.  

Reporting from USA Today's Michael Collins contributed to this story.