The trade war between the U.S. and China continues to imperil manufacturing jobs in western Massachusetts.
Chinese government-owned railcar maker CRRC has been denied an exemption from the 25 percent tariffs being levied on imported parts used at the company’s huge factory in Springfield to build new subway cars for the Massachusetts Bay Transportation Authority (MBTA).
CRRC has an $843 million contract to build more than 400 new Red Line and Orange Line subway cars.
The tariffs that took effect last October add to the cost of each new subway car and according to an MBTA spokesman it is CRRC that will have to absorb the additional costs, and not Massachusetts taxpayers.
Sixty percent of the parts on each new subway car are made in the United States, according to the company. The rest, including the steel car shells, are imported from China.
The Office of the U.S. Trade Representative turned down CRRC’s request to have the tariffs lifted.
CRRC declined comment Tuesday.
State Senator Eric Lesser, a Democrat from Longmeadow, was one of several Bay State politicians who wrote letters supporting CRRC’s applications for waivers from the tariffs.
" It is bad news the exemption wasn't granted. I am disappointed," said Lesser.
CRRC employs 120 people at the Springfield factory and projects its workforce will climb to 300 next year.
" The whole idea, at least we were told, is that the tariffs were intended to protect domestic manufacturing jobs, but in the case of Springfield these tariffs could hurt jobs we already have," said Lesser. " The decisions made in Washington are hurting, not helping the issue they claim to care about."
When it was announced in 2014 that CRRC would build a factory in Springfield after successfully bidding for the MBTA project it was heralded as a win-win – badly needed good-paying manufacturing jobs for western Massachusetts and long-awaited transit improvements in eastern Massachusetts.
The company has contracts to build new subway cars for Philadelphia and Los Angeles at the Springfield factory.
Plans were recently announced by CRRC to build a 42,500-square foot warehouse next to its factory on Page Blvd in east Springfield.
Rick Sullivan, president of the Western Massachusetts Economic Development Council, said CRRC has forged workforce development partnerships with local vocational schools and is purchasing goods and services from local companies.
"This investment here in Springfield is their North American headquarters, it is not insignificant," said Sullivan. "They've come in and really tried to follow all the rules and do the right things."
Whether CRRC gets a break from the tariffs would now appear to hinge on the outcome of the talks between U.S. and China trade negotiators.
President Trump set a March 1st deadline to strike a deal or he threatens to impose more tariffs.
