The core purpose over our nearly 20 years at GCP has been to help people and organizations grow. With the recent politics of duties unfolding we do not intend to stop pursuing our purpose with you.
What I mean by the politics of duties, is that there is no economic basis for a 10% or 25% duty. The intent of the duties, as I understand them, is to push China to change its approach to “forced” technology transfers for American companies doing business in China.
What GCP has been able to accomplish with the support of our factories is to reduce the full impact of the 25% duty. The amount of the reduction is substantial, and will be discussed with you individually so that your specific situation is made clear.
We have already begun to negotiate with the Factories whose products will be affected by the third round of duties. On September 6th the USTR office will announce the date for imposition of the tariffs, and whether it will be at 10% or 25% duty rate. We do not expect the duties to be applied until late September.
Again GCP is developing plans for both the possibility of 10% or 25% tax rates for the third round of duties. As soon as the USTR makes its plans known for the level of duty and the timing, GCP will communicate to you the specific impact on your business.
Although this conflict with China that we are currently experiencing is without precedent in my almost 40 years in business, I do not expect the duties to be in place for an extended period of time. President Trump has consistently made his position clear that he favors “Free Trade,” which means no tariffs, no barriers, no subsidies. I believe that President Trump will follow through with his position, once there is some meaningful movement from China.
India has been touted as the “next China,” and GCP’s involvement with India goes back 8-years. Even with a 25% duty on Silicone products, India just starts to become competitive on pricing; however, the Indian factories do not have the capacity, breadth of product line, or proven quality – not to mention reliable delivery times! All of these factors are important components of being competitive on a world scale.
GCP’s responsibility is to do all of the work necessary to ensure that you are competitive not just with a price for the product. We have established and nurtured strong personal relationships, that has resulted in a short and effective supply capability. Working with factories for up to 20 years, our decisions can be made quickly and cooperatively.
The bottom line is that GCP will keep you competitive to the best of our ability and the ability of the factories. It is important that you keep your confidence up, and focus on assuring your customers that you will be competitive and will continue to have high quality supply.
Most people when faced with uncertainty withdraw, hesitate and postpone important decisions. The reality is that the economy is strong, and continues to flourish. If you have products in inventory, you will likely sell it! If you don’t, then customers will go where they can get it and it will unfortunately not be at with your company.
As I stated, GCP will not be beaten by the politics of duties. We have all worked long and hard to be in the position we are in today. My intention is that after all of the dust has settled on these duties, we will all have come out stronger, together. Please take the actions and make the decisions that will position your company to grow not only today but into the future.
GCP’s core purpose is to help people and organizations grow, let us support your growth and competitiveness!
I sincerely appreciate the confidence and support you have shown to GCP through the years,
Thank you,
Gary Mottershead
