Tariff opportunity: Channellock Inc. eyes international expansion
By KRIS B. MAMULA
Pittsburgh Post-Gazette
MEADVILLE (TNS) — When President Donald Trump hit Vietnam with an eye-watering 46% trade tariff on exports to the U.S. earlier this month, the southeastern Asia country responded by quickly offering to drop its tariffs on American goods, which averaged 9.4%.
Nine thousand miles away in rural Crawford County, iconic hand tool maker Channellock Inc. saw opportunity in the bargaining: Suddenly, the tariffs turmoil might make it easier to sell the company’s signature products in Vietnam, company officials thought.
The hunch is turning out to be true. In the past few weeks, privately held Channellock inked a distribution deal that will get the company’s signature blue-handled tongue and groove pliers into Vietnam for the first time. Israel has also offered to drop tariffs on U.S. imports after Trump levied a 17% tariff on the country’s exports, opening another door for the company.
And the 45-day global pause for some tariffs that was enacted soon after Trump’s April 2 “Liberation Day” announcement creates opportunities for still other foreign markets to cut deals with the U.S. that could lower tariffs, easing Channellock’s entry into new markets abroad as negotiations with Vietnam and other countries continue.
In Vietnam, the country’s offer to eliminate import tariffs on American goods means that U.S.-made products will become more price competitive, said Jon DeArment, 51, executive vice president, manufacturing and engineering at Channellock.
“This could be good,” Mr. DeArment said. “The price gap between domestic and foreign-made products has grown so much. Consumers are more likely to buy up if the price gap is not so wide.”
A new wrinkle in the fast-moving tariff saga came Wednesday when a dozen states sued the president over the import duties, arguing that he has no power to “arbitrarily impose tariffs as he has done here.”
The lawsuit seeks to stop enforcement of what it calls unlawful tariffs, saying only Congress has the power to legislate tariffs. Pennsylvania was not among the states filing the lawsuit.
When Trump unveiled the duties on virtually every country April 2, he cited the need to rebuild the U.S. manufacturing sector to create jobs and economic vitality along with other reasons. As labor and production costs rose in the U.S. over the past four decades, American businesses turned to lower-cost, foreign manufacturers for cars, shoes, steel and many other goods.
The impact on American jobs was dramatic. Employment in manufacturing peaked at 19.5 million in 1979 before sliding to about 12.9 million in 2024, a 41% drop, according to the U.S. Bureau of Labor Statistics.
While recent uncertainty over the potential impact of tariffs has been blamed for business uncertainty and stock market gyrations, there have been some early wins in response to the trade strategy. Carmakers BMW, Honda and Hyundai; pharmaceutical company Novartis; and chipmaker TSMC are among the corporate giants at least considering adding to their U.S. production facilities.
Some economists don’t see all the jobs coming back, noting the complexity of rebuilding supply chains, the higher domestic labor costs and other issues that make a domestic manufacturing revival unlikely, they say.
Meanwhile back in Meadville, a tiny Pennsylvania city 83 miles north of Pittsburgh, things are booming as Channellock struggles to keep up with demand, company officials said.
The fifth-generation family-owned company, formed when blacksmith George B. DeArment began hand forging farrier tools in 1886, has been investing heavily in automation to build a competitive edge.
The outfit that became Channellock was originally called Champion Bolt & Clipper Co. and the tools were sold town to town in northwest Pennsylvania from the back of a wagon.
A turning point for the company came in 1933, when chief engineer Howard Manning developed the tongueand- groove slip joint pliers that soon became a standard fixture in every toolbox in America and are now sold in 50 foreign countries. The company changed its name to Channellock in 1963 after the rugged pliers with blue handles had become a must-have tool for professional mechanics and do-it-yourselfers alike.
Home Depot and Lowe’s are among the retailing giants that carry Channellock products.
Today, Channellock’s 230,000-square-foot factory is the keystone in Meadville, population 13,000, a city christened Tool City for its cluster of tool and die makers. Others include Parker Hannifin Corp., D&M Tool and Die Inc. and Mecal by Stam.
“They’re one of the biggest employers in town, family-oriented,” Meadville Chamber of Commerce Executive Director Christa Lundy said. “Great people, very involved in the community.”
The new tariffs are creating a window for international growth, said Ryan DeArment, Jon’s 45-year-old brother and executive vice president of sales and marketing.
“It’s huge in getting into markets,” he said. “The ongoing China thing is a concern — they really don’t allow us to export to them — but I really think it’s going to be good for us.”
Others see opportunity in the company, too. Channellock is contacted almost weekly with buyout offers from investors, but Mr. DeArment said the prospect of selling the privately held company is heresy among family members.
“Our growth rate the last five years has been phenomenal, double-digit,” Mr. DeArment said. “Our supply chain is all domestically sourced.”
At this point, the company is investing heavily in robotics and automation, a move that officials say has both reduced workplace injuries and boosted production.
Channellock once employed 600 employees, but its unionized workforce is down to 330 today, in part because of investments in technology that have automated production as the number of products expanded.
On the factory floor, Channellock workers can move between work stations as needed, giving the company work assignment flexibility that’s critical to staying competitive.
Mr. DeArment’s brother Jon is pleased with the promise of economic revival that he said comes with imposition of the tariffs.
“It’s a good play; it’s going to be a transition, but the result will be a big, robust manufacturing economy,” he said. “Getting pride back in making things is important.
“If we’re not making things here now, what are we doing?”