Many of America’s most beloved chocolate, candy and baking brands have a little bit of Baton Rouge inside thanks to Solvay, a company that’s been making vanilla flavors in Louisiana for more than 25 years. Situated along the Mississippi River, Solvay’s Baton Rouge plant has about 100 employees.
Our site is part of a global corporation that owns many plants in the U.S. and around the world. We have seen investment here, but we’ve also seen it go to our sister plants overseas. We compete globally, so every penny counts when it comes to the competitiveness of our local operations.
A number of factors make the difference in our success. Taxes and tariffs are among them.
At Solvay, we are pleased to see Congress show renewed interest in reducing import tariffs for certain goods and materials. Import tariffs, also called duties, are meant to protect domestic industry. But when there is no domestic producer to protect, Congress has the leeway to implement a duty-free policy. This is not a subsidy; it just recognizes a competitive reality.
For example, Solvay imports a key raw material in Baton Rouge because it is currently not available in the U.S. We pay a 3.7 percent duty.
For what? To protect a domestic producer that doesn’t exist.
Several years ago, there was a process that allowed manufacturers like us to petition Congress for temporary duty relief if there was no domestic industry to harm and there was a limited impact on U.S. customs revenue. Congress would consider legislation, called a Miscellaneous Tariff Bill, to account for actual market conditions. The whole process was thoroughly vetted, well-documented and transparent.
For many years, we benefitted from that policy. This allowed us to be more competitive with our overseas rivals, who make cheap vanilla flavor without the quality we ensure.
Then the process broke down. A political stalemate caused a de facto tax hike on U.S. industry. Of course, our overseas competitors enjoyed our disadvantage.
More recently, we see our Congressional leaders working together again to address this issue. Solvay applauds U.S. Sens. David Vitter and Bill Cassidy, U.S. Rep. Cedric Richmond and others for supporting this important legislation, the American Manufacturing Competitiveness Act of 2016. Manufacturers will be able to spend more on critical business needs and less on needless tariffs.
When our global business leaders see that Congress understands the ultra-competitive, worldwide nature of business today — and that they are willing to use their power to ensure that tariffs work for the U.S. business community and not against it — that gives companies like Solvay the confidence to continue investing here.
plant manager, Solvay