WILMINGTON — In the past month the Delaware business community has been uneasily watching for signs on potential tariffs, concerned that an all-out trade war could make price points even more difficult.
Last month, United States President Donald Trump announced a punishing 25% tariff on goods from two of the closest trade partners, Canada and Mexico, a tax that businesses would pay. Trump had delayed tariffs to March 4. However, in the days since, he has hinted that the deadline may be extended even further.
It’s been a stunning turn of events for businesses in the First State that rely on smooth exports, said World Trade Center Delaware Executive Director Carla Stone. Delaware exported $4.7 billion in goods in 2024, with one-fourth of it in chemicals for pharmaceuticals and acrylic polymer plastics.
“We are hearing that foreign buyers and partners are more concerned about the reliability of U.S. companies as suppliers because so many U.S. products are made with imported components,” Stone told the Delaware Business Times. “Companies like consistency, and right now, they are unable to plan for the long term.”
The WTC Delaware, which serves as a resource to companies looking to expand their business through international trade, has hosted listening sessions to help identify concerns and stumbling blocks.
In particular, Delaware companies and their trade partners have been confused at how quickly the talk turned to tariffs, and how broad the proposals were, she added. In his first term, Trump announced tariffs on solar panels, washing machines and steel in 2018, though steel had some exemptions.
The current tariff proposals were made weeks after Trump returned to the White House and include a blanket tariff on goods from Mexico and Canada. The only tariff that has gone into effect as of Friday was a 10% tariff on China, but the president has indicated he may want to double that.
The confusion has led many in Delaware to talk about buying ahead to avoid extra costs, and the national data has proven that other businesses had the same impulse. The U.S. trade deficit for goods widened by 26% in January, according to the U.S. Department of Commerce. Manufacturers and businesses imported $325 billion in goods and exported $172 billion in goods.
Right now, Stone said, it’s still too early to predict what the final decision on tariffs will be. But sourcing materials and components could be a major challenge.
“[Companies] all agree that the U.S. cannot build factories fast enough to substitute for foreign manufacturers. There may be no [local] substitutes for the imported products or raw materials they need,” she said.
WTC has opened a survey to better estimate the impact a trade war would have on Delaware companies and the number of jobs. Stone said the hope is to offer companies resources to adjust to the changing landscape.
Delaware’s trade with Canada
Trump campaigned on the idea of big tariffs while some of his original steel tariffs remained under President Joe Biden. But what shocked many, like Consul General of Canada Tom Clark, was that these are targeted to the U.S.’s major allies.
As the Consul General of Canada for five states, including Delaware, Clark has been tasked with working with federal and state officials and the business community on business trends and policies. In the past month, he and other Canadian officials have been talking with the Trump administration, governors and the media about the looming storm.
“It’s not in our interest to hurt our friends, and we know who our friends are. But we are dealing with an administration now who has put Canada under attack and has threatened us,” he told DBT. “We feel it’s important to let our friends know that Americans are the ones who end up paying on tariffs.”
Tariffs are designed to alter purchasing behavior, but it also results in companies raising prices thus passing the cost onto the consumer. An analysis by the nonpartisan Tax Foundation reported that if all of Trump’s proposed tariffs as of Feb. 13 are enacted, it would equate to an $800 tax increase per U.S. household.
Canada is Delaware’s No. 1 customer with the country importing $856 million in goods per year. That’s more than twice the amount Delaware exports to the United Arab Emirates and China, the next closest partners.
Among the top exports Canada buys from the First State is fruits and nuts at $158 million, according to the Consul General. The Port Wilmington is ranked the top on-dock cold storage facility in the U.S., with many cold storage vessels arriving and departing in the past week delivering bananas, grapes, clementines and citrus fruits from around the world.
Port Wilmington operators are monitoring the federal policy shifts and are in contact with foreign trade partners to “provide transparent logistics solutions and keep America’s supply chain thriving.”
“While the movement may be different, tariffs do not completely stop the import or export of cargo. Enstructure is maintaining its normal operations at Port Wilmington,” Enstructure Communications Specialist Laurie Stoval wrote in an email.
Mexico is where Delaware imports most of its goods, with Canada ranked at No. 2. The largest sector of imported goods is oil and gas. The Delaware City Refinery imports about 20,000 barrels of crude oil per day, Clark said.
The Delaware City Refining Company had not returned a request for comment as of press time.
“When you look at that, it means it’s going to be 10% more expensive, and there’s estimations that everywhere in the state would see a gas price increase as much as 80 cents a gallon or more,” Clark said. “And that’s just American tariffs. [Canada] has said very clearly that if tariffs come our way, we would retaliate quickly and robustly.”
