Imports from China Drive New Jersey Manufacturer’s Global Exports

US exports to China create jobs in the United States. In fact, exports by US companies to Chinese buyers supported over one million jobs in the United States, according to the US-China Business Council’s 2023 Export Report. But what about imports from China? Do they create or cost American jobs? For Devon Winter, Chief Operations Officer (COO) at F. W. Winter Inc & Co., the answer is clear—imports of intermediate ferroalloy inputs from China support the jobs of all 25 employees at her family-run company based in Camden, New Jersey. Not only that, but those imported inputs have enabled F. W. Winter to export metal and alloy powders to markets around the globe.

Ferroalloys are a group of materials composed of iron mixed with at least one other metal. They are critical in the production of steel, as well as a wide range of industrial equipment. Devon Winter is an expert in the global ferroalloys business. Her family’s company sources ferroalloys in lump form and processes them into special alloy powders in their New Jersey factory. The company then sells the powders to manufacturers worldwide who utilize them in the production of engines, welding wires, catalytic converters, and many other products for the automotive, oil, gas, and aerospace industries.

Winter’s company was among the earliest American businesses to trade with China after the start of reform and opening, dating back to the founding of the company in 1983. Forty years later, Winter shared her insights on navigating the uncertainties within the US-China commercial relationship.

“We buy enough so we want direct relationships with the suppliers.”

The story began with Winter’s father, Friedrich Winter, a German metallurgist who traveled across the globe in the mining and raw material trade industry before immigrating to New York City in 1978 to take up a position at a trading company there. Friedrich invested in a New Jersey metal company and purchased the assets of the company in 1983 after it went bankrupt, turning it into F. W. Winter Inc & Co. The company now owns 18 automated mills in Camden, New Jersey, and it remains a family-run business, with some very long-term employees.

Winter never thought she would work in metals or manufacturing. She had dreams of becoming a journalist. She started working in her family’s company while attending graduate school for business at Drexel University at night. But she soon took to the role, researching lean manufacturing and implementing her own ideas, boosting the competitiveness of the company in the process. Winter also benefited from participating in a joint study abroad program between the University of Vermont and Qingdao University on doing business with China, which she completed in 2011 during her undergraduate studies. That proved helpful since managing relationships with Chinese partners is integral to F. W. Winter’s business.

China sourcing leads to global exporting

F. W. Winter currently sources a large percentage of its ferroalloys from China. According to Winter, diversification is not out of the question. In addition to China, countries such as Russia, Turkey, Kazakhstan, and South Africa are also suppliers of these raw materials. However, the Russian invasion of Ukraine, and the US sanctions that followed, have eliminated Russia as a sourcing option. Sourcing from the United States is not an option and for many of the ferroalloys, China remains the most economical and reliable channel.

As the COO, before COVID-19, Winter regularly traveled to China to meet with suppliers in person. “We need to know what we are buying,” Winter emphasized. The chemical composition of ferroalloys is critical for Winter’s clients, especially the iron and aluminum content, so she always seeks to ensure the highest quality when sourcing. “We buy enough so we want direct relationships with the suppliers,” Winter added.

According to Winter, approximately 30 percent of her company’s revenue comes from exports to markets in Canada, Southeast Asia, South America, and Europe. F. W. Winter’s exports to other regions of the world, as well as their domestic manufacturing and sales, depend on the high-quality intermediary inputs of ferroalloys that they import from China.

Tariffs are not the answer

When the Trump administration increased tariffs on ferroalloy imports from China, China responded by increasing subsidies for its producers so they could lower the price and undercut competitors in international markets. Prices fell so fast that by the time Winter’s company could manufacture their final product, customers would come asking for further discounts.

“It’s not good for business having these conflicts. In terms of what we do, the relationship is not going to stop. What happens is that we just end up paying more for it. We need to cooperate to make this work.”

Winter recognizes China’s dominance in the global ferroalloy market as an issue that requires a collective response from the United States and its allies, but import tariffs are not the answer. When the Trump administration implemented a 28 percent tariff on aluminothermic chromium, a key ferroalloy that Winter’s company imports from China, the company struggled. “For a US$1 million invoice, we were spending US$280,000 on tariffs”, Winter lamented. The tariff added extraordinary costs but, according to Winter, did little to pressure China to change.

The Biden administration removed the Trump-era tariff on aluminothermic chromium in 2022, reverting to the standard most-favored-nation (MFN) tariff of 3.1 percent. That progress could be at risk, though, with increasing calls from some elected officials to revoke China’s Permanent Normal Trade Relations (PNTR) status. If China’s PNTR status were revoked, over 17,000 tariff lines would be impacted, raising tariffs by an average of 32 percent. That is what Winter wants to avoid.

Seeking common ground

Having spent a summer studying in Qingdao in college and years of doing business with China since, Winter understands the importance of having a global perspective. “It is important to learn about other cultures, and language learning should be promoted more in the United States. Mandarin is a leading language.” Looking back to her time in Qingdao and her experience doing business with Chinese suppliers, she regrets the COVID-19 pandemic prevented her from traveling to China for five years.

Over the years, business has gone relatively smoothly with China. Winter’s father remains involved in the company and has maintained his relationships with Chinese partners for 40 years. Winter focuses on the business part of the engagement with their Chinese suppliers. However, the current state of the US-China relationship is not something Winter likes to see for her business. “It’s not good for business having these conflicts. In terms of what we do, the relationship is not going to stop. What happens is that we just end up paying more for it. We need to cooperate to make this work.” Although impediments exist in the relationship, she believes “there is definitely a way out.”