Trump’s tariffs create the ‘Wild West’ on Wisconsin’s factory floors
Trump’s tariffs create the ‘Wild West’ on Wisconsin’s factory floors
KI, a contract furniture manufacturer based in Green Bay, is navigating the uncertainty surrounding tariffs and trade policy changes that are affecting U.S.-Canada commerce. The company produces the majority of its products in its five U.S. plants but also operates a factory in Ontario, which generates approximately $50 million of its total $800 million in annual sales. A significant portion—90%—of those sales from the Ontario plant are exported back to the U.S., making the company particularly sensitive to any shifts in trade regulations between the two countries.
Brian Krenke, CEO and president of KI, described the current trade environment as highly unpredictable, with new policies and adjustments being introduced every couple of weeks, making long-term planning difficult. Like many manufacturers, KI is grappling with rising costs due to tariffs on raw materials such as steel and other components, forcing the company to reconsider its pricing strategies.
To offset these rising costs, KI is implementing a two-pronged approach. First, the company is raising prices across its product lines to account for increased expenses related to raw materials. Second, it is introducing a “tariff surcharge” for select products as part of its pricing strategy. This means that certain high-end product components, such as premium office chair mechanisms imported from Italy, will be offered at an additional cost, allowing customers to opt for the premium version at a higher price or select a more budget-friendly alternative.
Krenke emphasized that these rapid changes in trade policies create a challenging environment for manufacturers, particularly those with international operations. The fluctuating landscape makes it difficult for businesses like KI to plan ahead or develop a consistent response strategy. Despite these challenges, the company is working to adapt, ensuring that it remains competitive while managing the financial impact of tariffs on its supply chain and pricing structure.
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