So far exempt from tariffs, maple industry still feels their effects

In a few weeks Dave Kemp will be making his annual pilgrimage to the Vermont Maple Festival in St. Albans, where he will tour the open houses of sugaring equipment manufacturers clustered nearby.

Canadian maple syrup equipment firms Lapiere, CDL, H20 and Dominion & Grim all have showrooms within a short distance of each other in Franklin County, the epicenter of Vermont’s sugaring industry.

The weekend-long event, which includes a parade through St. Alban’s downtown, draws thousands of attendees, including many maple syrup producers, who come to talk shop, sample each other’s products and put in their advance purchase orders for the latest in sugaring equipment and technology.

But this year Kemp, industry director for the New Hampshire Maple Producers Association and owner of D & D Maple Supplies, a maple syrup equipment distributor in Jaffrey, N.H., expects his annual “working vacation” to be consumed with questions over the impact of the Trump administration’s imposition of 25% tariffs on Canada will have on northern New England’s maple syrup industry.

“You’re going to be looking for something in stock that you can get a good price on because later you’re going to be paying full price plus quite possibly 25 percent,” said Kemp.

“So if you have any intention of expanding, buying a bigger evaporator pan or reverse osmosis system, now would be a good time, even if you need to borrow money to do it,” he advises.

The impacts from tariffs are far from clear and — contrary to belief even within the sugaring industry — maple syrup imports and equipment are exempt under prior trade agreements, according to Vermont’s maple syrup trade association.

But that doesn’t mean exempt products themselves — which can include materials imported by Canadian manufacturers from the U.S. — won’t be affected as reciprocal tariffs imposed by Canada will drive up costs on the supply side.

Kemp, 71, said he is bracing for the dealership meeting with his major equipment supplier, Quebec-based CDL, which will be on April 26, the day before the manufacturer showrooms open to the general public.

That’s when CDL dealers expect to hear how much more they will be pay for evaporators, vacuum pumps, boiling pans, tanks, tubing, containers, bottles and the panoply of equipment sugarmakers use to boil maple tree sap into syrup — as a result of the trade war unleashed by tariffs.

“Everybody is concerned because 90 percent of what makes maple or is maple comes to us through Canada,” said Kemp, adding he is “speaking my own opinion” since the MPA board has not yet formed an “official position.”

Despite the apparent tariff exemptions for maple syrup and equipment, some in the sugaring business report they are nonetheless already being affected by the broader turmoil.

Bruce Bascom, owner of Bascom Maple Farms, the giant maple industry equipment supplier and producer of syrup based in Alstead, N.H., said he sent a truck to pick up two stainless steel storage tanks at a manufacturer’s warehouse in Swanton, Vt., last week that were destined for a customer in New Hampshire.

But, when Bascom’s truck arrived at the Vermont warehouse a surprise 12% surcharge had been slapped onto his wholesale cost for the tanks imported from their manufacturer in Canada.

“We already had those tanks sold to other people,” Bascom related. “So we ended up taking a loss because we couldn’t change the price at that point. We got caught in the middle.”

Allison Hope, executive director of the Vermont Maple Sugar Makers’ Association, who has been liaising closely with U.S. Sen. Peter Welch’s office, said the Trump administration’s statements on tariffs “has changed so much over the past couple of months that it’s hard to get final crystal clarity on it.”

She noted, however, that the White House’s announcement on April 2 imposing a broad array of tariffs on U.S. trading partners states that under the USMCA trade pact with Canada and Mexico negotiated to replace NAFTA “compliant goods will continue to see a 0% tariff” and are exempt from the 25% tariff rate.

The list of “compliant goods” — materials and products that qualify for preferential tariff treatment — is extensive but includes “maple syrup” and “machinery for sugar manufacture,” according the schedule of duties under the pact.

That suggests it seems to have “not picked up anything new from (April 2) announcement,” Hope said, noting “that’s not to say that there won’t be effects on producers. I want to be clear about that.”

But as far as syrup and equipment goes, “we have sidestepped any new tariff rules at this point,” Hope said.

That’s the view, too, of Welch’s office, according to spokesperson Aaron White.

“The certification process to prove USMCA-compliance is functioning on a claim-by-claim basis,” White said last week, referring to the tariff exemptions.

Welch, he said, “urges the administration to honor previous claims of compliance.”

Nonetheless, exempt from tariffs doesn’t mean immune from tariffs.

As a micro boiler who expects to produce about 100 gallons of syrup from his 550 taps in West Harford, Carl Nelson, owner of Wildlife Farm, said for him “the impacts of tariffs haven’t hit yet but I know that all four manufacturers tried to ship their entire year’s inventory down here before the tariffs hit.”

Nelson, who sells his syrup “out of my house” on Jericho Street and describes his operation as “off the grid” noted that a lurking danger for big sugaring operations will be the cost of energy — oil and electricity from Canada — that will be driven up due to tariffs.

Syrup makers “use oil for boilers and boatloads of electricity for reverse osmosis and vacuum pump systems. Electricity is almost not a cost right now but if it’s hiked” that would affect operating costs. And although the cost of heating oil has been stable, Nelson remembers what happened the last time there was a price shock.

“Seventeen years ago when heating oil went to $4 per gallon a lot of people just didn’t sugar that year … one of these days it’s going to go through the roof again and that will rack sugarmakers,” he said.

Kem p, the equipment dealer, said he can’t foresee all the fallout tariffs will bring to his industry, other than “it will make maple syrup on store shelves more expensive.”

There is not a lot of price elasticity in the product.

“What worries me the most is that maple syrup is not a staple. It’s a luxury commodity,” Kemp said. Paying more on top of what is already an expensive treat for many consumers “increases the hardship and makes it less likely that people will want to buy. Anybody that doesn’t have rose-colored glasses on can see that.”

Contact John Lippman at jlippman@vnews.com.