Philly businesses prepare for a new era of global trade: ‘Everything remains up in the air’

A manufacturer of protective cushioning and packaging products in Bustleton is holding off on hiring and making capital investments.

A seafood wholesaler in South Philadelphia is scouting potential domestic sources in case a cut of branzino from the Mediterranean Sea becomes economically unsustainable.

And the CEO of a sporting goods company in Southwest Philly is balancing optimism that this new era of protectionism will revive manufacturing in the U.S. against apprehension that steep taxes on imported materials will upend his business.

As U.S. stocks tumbled and fears of a potential recession mounted in the aftermath of President Donald Trump’s announcement Wednesday of sweeping new tariffs on goods from across the world, businesses in the Philadelphia region grappled with deepening economic uncertainty even as some shared Trump’s nostalgia for a time when America — and Philadelphia, once known as the “workshop of the world” — were manufacturing heavyweights.

» READ MORE: Philly port braces for tariffs as the largest U.S. importer of fruit

“This is just like Fort Sumter, the first volley of the war,” Ronald “Boots” Nissenbaum, chief executive of Humphrys CoverSports, said Thursday, borrowing a Civil War-era analogy to capture the shock of Trump’s barrage of tariffs. The company uses materials from Vietnam, China, and Spain to make its products.

But Nissenbaum, who started working for his father’s textile manufacturing company more than 50 years ago, isn’t panicking: “Wouldn’t it be nice to buy American-made stuff?”

That sentiment carried the day at the White House, which held up Friday’s report by the Labor Department showing the U.S. added 228,000 new jobs last month — beating Wall Street expectations — as evidence that Trump’s policies were working. “The report highlights a resilient labor market as companies aggressively onshore jobs amid President Donald Trump’s bold trade and economic agenda,” the White House said.

Financial markets were less sanguine, as the fallout over the trade war continued with China announcing 34% retaliatory tariffs on U.S. goods. Investors continued to sell U.S. stocks on Friday, a day after the S&P 500 index fell 5% — its biggest single-day loss since June 2020, when the country was in the thick of the COVID-19 pandemic.

Federal Reserve Chairman Jerome Powell said Friday that tariff increases will be “significantly larger than expected,” likely slowing growth and increasing inflation. Trump, meanwhile, wrote on social media that the chairman should “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”

Analysts at JPMorgan on Thursday put the likelihood of a U.S. recession at 60%, up from 40% prior to Trump’s “liberation day” speech. Mark Zandi, chief economist at Moody’s Analytics and a columnist for The Inquirer, said the U.S. effective tariff rate will increase to about 25% — higher than the top rate imposed under the Smoot-Hawley Tariff Act of 1930, a federal law he said “contributed to the Great Depression.”

Zandi described the most likely scenario going forward as one in which Trump avoids imposing “the most draconian tariff increases” and the U.S. narrowly avoids a recession. But economic growth would still go “largely sideways” and unemployment would peak at almost 5%, he said.

“This is a big comedown from the growth we had expected before the trade war went down this dark path,” he wrote Thursday. “But there is still hope that the president will pivot before his policies undermine the stock market and the economy.”

Projections aside, the impacts of the trade war are already very real for businesses that have to make payroll and figure out whether and how their orders will be affected by the Trump administration’s fast-changing import taxes.

“We have no idea what is going to happen in the next month or two,” said Fred Woll, owner of Bustleton-based protective cushioning and packaging manufacturer F.P. Woll & Co. “It seems like a broken record, but this is unprecedented.”

Operating in Philadelphia since 1907, the 16-employee company designs and makes packaging products for industrial and military customers throughout the country. Much of Woll’s raw materials are domestically produced, he said, limiting potential exposure to import taxes.

But the final destinations of his company’s products stretch well beyond the U.S. Some of his customer’s projects, he said, have been put on hold in the wake of the tariffs. Woll, 53, said he’s holding off on buying new equipment until he gets a clearer picture of the business environment.

Other business leaders echoed the concern. “Uncertainty is the word of 2025 so far,” said Laura Manion, president and CEO of the Chester County Chamber of Business & Industry, which has 600 members.

“There are companies in a wait-and-see pattern. That is a good place to be for some,” Manion said. “But there are others that are already seeing supply chain issues.”

In South Philly, wholesaler Samuels Seafood Co. imports about half the 50 million pounds of fish it sells every year. It buys fish from around the world. “We are preparing our staff and our customers and vendors, and trying to negotiate as best we can,” said owner Sam D’Angelo, 68. “Everything remains up in the air.”

A longtime South Philly staple, Samuels Seafood employs about 500 people nationwide, and operates not only in Philadelphia, but also in Pittsburgh, Florida, and Las Vegas.

While D’Angelo expects the end consumer to bear some brunt of increased costs, he said the company is already negotiating pricing with overseas producers.

Countries such as Vietnam and India, which face high tariffs under Trump’s plan, are likely to cut prices to keep business going. But already the company has canceled plans with one salmon farm in another country because it was not willing to negotiate a new rate, he said.

Domestic producers and fisheries may offer comparable products at a better rate — say, fresh porgy, caught off the coast of New Jersey, or seafood in Alaskan waters. But increased demand for domestic fish could push prices up, too.

“To take this lying down obviously is not what we are going to do,” D’Angelo said. “We are going to fight it and negotiate and source in other areas wherever we have to.”

Other food wholesalers say agreed-upon prices up and down the supply chain are in flux. Mark Oltman, chief financial officer of Burlington County-based Foods Galore, said one of the company’s largest importers wrote a letter essentially saying “they can rip up contracts and just say, ‘Well, [stuff] happened, and here we go.‘”

If Foods Galore pays more to its vendors, it has to charge its customers more.

“We’ll sell them at the same profit margin … but I can’t have that shrink and all of a sudden I’m selling everyone stuff and making no money,” Oltman said. “It just becomes this whole debacle and everyone’s budgets get blown.”

Foods Galore, a family-owned distributor, sells to restaurants, gourmet grocers, supermarkets, universities, and hospitals throughout the Mid-Atlantic as well as federal prisons nationwide. Big clients are better-equipped to weather the price changes, Oltman said.

“What happens to the restaurants and the pizza shops and the bars?” he said. “It’s going to be a problem.”

Nissenbaum, the Humphrys CoverSports CEO, struck a more optimistic note. His company primarily makes coverings for sports fields, including the rain tarps that the Phillies use, the padding around Lincoln Financial Field, or gym floor coverings for schools.

“We have to wait for the dust to settle,” Nissenbaum said. “We will adjust, but I think that things are going to cool down.”

Across the business world, executives acknowledged that the new trade rules imposed by Trump — if sustained — will fundamentally change the system that has underpinned global commerce for decades.

Holt Logistics Corp., which operates marine terminals on both sides of the Delaware River, has long advocated for the free flow of goods. But as President Leo Holt put it Thursday: “The orthodoxy is out the window.”