Trump, Trade, and New Hampshire Manufacturing

Mar 29, 2017

Workers inside Graphicast, a Jaffrey-based manufacturing company founded in 1978.
Credit Todd Bookman/NHPR

The factory floor inside of Graphicast, a manufacturing company in Jaffrey, feels like a throwback to another era. Workers stand around waist-high crucibles, plucking casts out of the pots filled with bubbling liquid metal.

“We’re melting at about 1,200 degrees Fahrenheit,” says Val Zanchuck, the company’s CEO, over the din. 

“A nice shiny silvery looking metallic pool of molten metal, and when we’re done with the casting, it is also silver looking. Nice and shiny when it is coming out of the mold.”

Graphicast isn’t a household name. The company doesn’t sell goods to consumers, but instead produces a range of zinc alloy parts that wind up in other company’s products.

“It doesn’t look glamorous, but at the end of the process, we’re making parts that go in medical equipment that have tolerances down to fractions of a thousandths of an inch,” says Zanchuk. “So it’s very, very precise. It doesn’t look as high tech as some factory with all types of robots making cars, but there is still a lot of engineering and precision that goes into it.”

Val Zanchuk displays a part in different stages of development. He says the company would suffer if the United States finds itself in a trade war.
Credit Todd Bookman/NHPR

The company has been in business since 1978. It’s customers include some big name firms, including General Electric, Siemens, and Johnson & Johnson.

You can think of Graphicast and its 24 employees as a small link in a much larger supply chain that relies on products moving seamlessly around the globe. For the system to work well, countries need to cooperate on trade policy. And if they don’t?

“If there are any trade wars, my business might as well disappear, because I think a lot of our customers are just going to shrink,” says Vanchuk, who is also chair of the board of directors for the Business and Industry Association, the statewide chamber of commerce.

One of the biggest question marks for Zanchuk and his customers right now is the future of the North American Free Trade Agreement, or NAFTA. President Donald Trump campaigned on a promise to renegotiate the 23-year old trade deal that removed most tariffs between the United States, Mexico and Canada.

“We are going to make it either into a deal that brings jobs back into our country, or we are going to just terminate it. We’re out,” said Trump.

That message resonated with voters, but for New Hampshire CEOs, the politics are less important than their own balance sheets.

Take American Steel Fabricators in Greenfield, where company President Mark Carter says the cheaper Canadian steel made possible by NAFTA routinely costs him contracts. If Trump can fix that, hey, why not?

“I’ve heard President Trump say that he’s in favor of free trade, he simply wants fair trade,” says Carter. “And I think that’s a very American position, and something that our industry, the fabricated steel industry, would strongly support, yes.”

Support for or against a renegotiated NAFTA, or another proposal floated by Trump, a border tax on imports, largely depends on what line of business you’re in. For New Hampshire manufacturers that export or make high-tech goods, current free trade deals have provided a boost. Meanwhile, jobs in paper production, car parts, and textiles have suffered.

Credit Sara Plourde/NHPR

Automation and the rise of China are to blame for a share of those losses, and most economists agree trade deals like NAFTA do more good than harm. Bruce Elmslie at the University of New Hampshire says the problem is empty factories are a hard thing to ignore.

“It is a difficult message to get across. The reason being is what we see on the news, and you hear about, is a company closing, or you see the job loss,” says Elmslie. “You don’t see the decrease in prices, you don’t see the workings of the international supply chain creating jobs. Those are invisible things, whereas the costs are really visible.”

He cautions that a Trump-style “America First” trade policy—one that doesn’t level the playing field between countries, but rather, seeks to protect certain industries—hurts American consumers in the long run.

'He's in favor of free trade. He simply wants fair trade, and I think that's a very American position.'

“So if we have a ‘Buy American’ program, Canada has a ‘Buy Canadian,’ Mexico has ‘Buy Mexico.’ Then, essentially, the world’s supply chain shrinks,” says Elmslie, driving prices up for everybody.

Add that potential outcome to already existing challenges with health care and energy costs, and you understand why Val Zanchuk, the CEO of Graphicast, is wringing his hands a bit more these days.

“These are uncertain times, and businesses like stability,” he says. “We are making plans years in advance.”

But with a new administration, and maybe a new trade policy, many New Hampshire manufacturers are suddenly finding that a lot harder to do.

This is the third story in NHPR's series On The Line: Manufacturing in New Hampshire.