Perry Barnett, a partner at the Gainesville firm Rushton, said Tuesday that if he could describe the economy in two words, “one is change and the other is caution.”
“I think we are all aware of three main things in the world today that really affects and filters down to our economy and our small businesses, one being the trade negotiations with U.S. and China, Brexit and a lot of civil unrest around the world,” Barnett said at a Tuesday Greater Hall Chamber of Commerce panel. “For small businesses … day to day in Hall County, you may not think this affects you, but eventually it does.”
Barnett said that global unrest has led some companies to reconsider large investments.
“Foreign companies that are already here, that want to make expanded investment in the U.S., everything is on hold,” Barnett said. “… They’re already here, they’re supporting the economy, but they’re not going to make a half billion or billion dollar investment until they know what’s going to happen with the trade relations.”
But panelists at Tuesday’s Economic and Political Forecast event, including State Rep. Lee Hawkins, R-Gainesville, Northeast Georgia Health System CEO Carol Burrell, and Brett Fowler, partner at Turner, Wood & Smith Insurance, were still confident in the future of the area’s economy and Hall County’s ability to attract and keep businesses.
Mike McGraw, northeast chapter director of the Georgia Manufacturing Alliance, agrees.
“We’re still in good shape with people moving in,” McGraw said, adding that there is a shortage of large properties left for companies to purchase.
President Donald Trump's trade office said Tuesday it would delay until Dec. 15 the 10% tariffs on some Chinese imports, including goods like cellphones, laptops, video game consoles, some toys, computer monitors, shoes and clothing.
The administration is also removing other items from the tariff list entirely, based on what it called "health, safety, national security and other factors." Officials still plan to go ahead with 10% tariffs on about $300 billion in Chinese imports. Most of the new tariffs will begin Sept. 1.
McGraw said that tariffs placed on some metals like steel affected prices at first, but over the past year or so, businesses have adjusted.
“If you were buying material from China, you’re automatically going to be paying more. … All domestic steel went up the same amount. Now everything has pretty much balanced out,” he said.
The tariffs have caused manufacturers to look for domestic metals instead, he said.
“It is trickling down to the point where a lot of things are being re-shored, and I’m getting calls on things that would normally go to China for my contract manufacturing plant,” he said of the effects on Ranger Manufacturing, a company on Airport Parkway in Gainesville.
Tim Evans, vice president of economic development for the Greater Hall Chamber of Commerce, said tariffs often force companies to find alternative sources for the materials they need.
“If there’s a tariff on goods coming from China, then can they source those goods from somewhere else? And it may or may not be the United States because we may not have a good comparative advantage at producing that good,” Evans said. “Somewhere else might be, and that’s why we trade.”
As for local effects of Brexit, the United Kingdom’s decision to leave the European Union, McGraw said effects have been less financial and more tied to the mindset of protecting domestic business interests.
“The Brexit movement is tied to the psychology of things. … I think that the social cost of things became so overbearing that people who actually do the work are tired of giving so much away that they actually pull some back,” he said.
McGraw said there are some parallels between Brexit and the trade war with China.
“The field just wasn’t good for (the United Kingdom), so they pulled out. … I think Britain just felt like they were getting played, like we felt the same way with China,” he said.
Evans said the direct effects of Brexit are being seen more in Europe.
“But if Europe has the flu, will the U.S. catch a cold? Probably,” he said. “… That might lead to economic uncertainty, and maybe some challenges for the U.S.”
Evans said Hall County has not yet seen economic effects of Brexit.
“I think it has affected some European companies looking at North America for a first location,” Evans said. “Much of what we work with is often companies that already have a presence in the U.S. and they’re adding a second facility, or maybe they have a presence here in Hall County and we’re looking to help them expand.”
The diversity of Hall’s economy also shields it from the worst effects of a downturn, Evans said.
“We not only have manufacturing, but we have a very diverse manufacturing base of food processors, other suppliers, life sciences companies,” he said. “We also have health care, professional services and a lot of small businesses. That kind of insulates Gainesville and Hall County.”
The Associated Press contributed to this report.