WEST LEBANON — As the burden of tariffs and expiring tax credits begins to weigh on the only woodstove manufacturer in New Hampshire, the company has begun downsizing.
“What you do if you’re in business and you’re dealing with tremendous uncertainty is that you contract,” said Tom Morrissey, the president of Woodstock Soapstove in Lebanon.
Five of the firm’s 25 manufacturing positions have been left unfilled in recent months, said Morrissey, who has been with the company for all of its 47 years.
The company is also reducing inventory, decreasing the number of models in production and increasing lines of credit, General Manager Lorin Day said.
The stove manufacturer recently had to pay $40,000 in tariffs on a shipment of material for which they would have paid just a couple hundred dollars in the past, Morrissey said.
“We’re just like a little acorn in this hurricane,” Morrissey said.
Any steel and aluminum materials coming from outside the U.S. are now tariffed at 50%, including the steel and cast iron that Woodstock Soapstone uses to make its stoves.
The company at one point got its cast iron from Randolph-based Vermont Castings, which stopped supplying it to Woodstock Soapstone’s specifications. Their cast iron now comes from a foundry in Spain.
And while most of its steel is North American, some of it comes from Canada, which is subject to tariffs, Morrissey said.
There’s also uncertainty about whether the soapstone — a naturally occurring rock — will be tariffed, as it comes from Canada, but isn’t produced in the U.S., Morrissey said.
Morrissey said he expects the tariffs to raise retail prices of his stoves by around 12% to 15%. This will begin in the next seven to 10 days, Day said.
As a small business that sells directly to “working class” customers mostly, Woodstock Soapstone is at a disadvantage to larger manufacturers that have more leeway on prices, Morrissey said.
And while the increase will have to happen soon, the company has been holding it off, Morrissey said. It hasn’t started shipping products built from the tariffed goods, using more of their reserve supplies as they try to “put off the pain as long as (they) can,” Morrissey said.
“It’s essentially an unexpected unilateral tax on materials that we buy from outside the United States — that we can’t get from the United States,” Morrissey said.
The manufacturer requires a certain grade and format of metal that is not available in the United States, Day said.
For example, the business buys some steel from China, which is not produced well domestically, for a specialty part that reburns smoke.
“I can show you what you can get in the United States, but you’d be disgusted,” Morrissey said.
In addition to the raised tariffs, the federal tax credit on wood heaters is set to expire at the end of December, instead of 2032, as previously set. This credit reduces the price of woodstoves approved by the Environmental Protection Agency by 30%.
Morrissey said he expects the surge in orders to increase as more people learn that the credits are ending. This will help in the near future, but hurt sales long term.
It will also strain the company’s ability to build enough stoves on time, he said.
The strain is worsened by bureaucratic red tape. For example, Woodstock Soapstone has been awaiting the EPA’s approval of a new stove model since April.
There are currently $300,000 to $400,000 in orders that can’t be fulfilled because of the lack of approval, Morrissey said.
In the past, a phone call to EPA administrators could have resolved the issue in a matter of days, Morrissey said. But he hasn’t been able to reach anyone in the agency for the last five months, he said.
A spokesperson for the EPA wrote in an email that the processing time for new certifications have been “longer than usual” due to “resource issues and the need to prioritize renewals of expiring certifications.”
The spokesperson also wrote that Woodstock Soapstone’s new model is scheduled for a detailed review starting on Sep. 29.
But at a certain point, Morrissey has to tell customers that he’s “not sure I’ll be able to fulfill their orders,” he said.
Sen. Jeanne Shaheen, D-N.H., visited Woodstock Soapstone to raise awareness about those impacted by tariffs.
“The only thing that’s going to move this administration is when they hear from businesses (and) consumers that they’re being hit by these tariffs in a way that makes it hard to do business,” she said.
In January, Shaheen introduced Senate Bill 151, which seeks to deny tariffs imposed through the act that the Trump administration used on metal imports. The bill was blocked by Republican senators, but she has continued to push the issue.
“We need to continue to bang that drum so that people make the connection between the tariffs and what they’re seeing in their pocketbooks – and what small businesses, in particular — are seeing with the impact of tariffs,” she said.
The cost increases aren’t life-threatening for Woodstock Soapstone, which has no debt and owns its property, tools and supplies, Morrissey said.
But as Woodstock Soapstone braces for the near future, it is beginning to look into other markets that aren’t regulated by the government, such as furniture — which can be built in their shop, Morrissey said.