Why Trump tariffs hit this rural South Carolina town especially hard

Anna B. Mitchell | The Greenville News

The Element Electronics plant could be the first in South Carolina to close because of tariffs on Chinese imports recently imposed by President Donald Trump. Here's why Element was so deeply affected and what it means for the rural community of Winnsboro:

What is Element Electronics?

► This is the nation's only television assembly plant, employing 134 people in Winnsboro just north of Columbia. It is owned by the O'Shaughnessy Holding Co. out of Minnesota and makes five flat-screen TV models primarily for Walmart. The TVs' four main parts, all imported from China, include a screen that makes up 70 to 75 percent of their cost.

Where the heck is Winnsboro?

► It is a 34-mile, 35-minute drive north of Columbia on Interstate 77. This is the stretch of highway where you will see vast tracts of pine trees on either side. Timber is big here, covering 84 percent of the county's acreage. Winnsboro was cotton country before war, environmental degradation and foreign competition snuffed it out by the 1920s — and it has the antebellum townhouses and plantations to show for it. Winnsboro is the county seat of Fairfield County, which has been in the news a lot over the past year as home to the beleaguered V.C. Summer nuclear plant. Between 250 and 300 locals lost their jobs when V.C. Summer halted its expansion plans last year.

How important is Element to Winnsboro?

► The workforce in Fairfield County numbers fewer than 10,000 people. The Element plant's target staff size — 500 workers (it never got that large) — would have comprised 5 percent of the total workforce. Consider how important the auto industry is to the Upstate. This was their BMW.

Why do we care?

► After announcing in 2013 that Element would come to Winnsboro, the state of South Carolina gave Fairfield County a $1.25 million rural economic development grant to help pay for Element's building, which the county leases back to the company for $1 a year. So aside from seeing these people suffer, you might care because your tax dollars helped bring this plant here. It provided jobs to a high-poverty (34 percent) county where unemployment, at 5.7 percent, is second highest in South Carolina.

Will it really close?

► Company, state and local leaders are asking the White House to waive tariffs on critical Chinese components the plant needs to make its TVs. If the waivers don't happen, workers will be sent home starting Oct. 5. The plant will keep a skeleton staff to maintain the place on the off chance tariffs are lifted at a later time. Interestingly, Winnsboro folks can't buy an Element TV in town, as their own Walmart closed two years ago, taking with it 165 jobs.

Why was it SC's first tariff-related closure?

► Element's owners were banking on free trade and a razor-thin margin when they opened this plant. The company also had a dangerously monolithic supply chain, importing all its parts from China. As it stood earlier this year, components were already subject to a 4.5 import tax, which the owners had been trying to get waived for years. When they announced the plant back in 2013, they had expected the recently expired U.S. Miscellaneous Trade Bill (MTB) to be renewed. That didn't happen, and they have been operating essentially at no profit ever since, according to Fairfield County Economic Development Director Ty Davenport. The company had hoped a new MTB would pass in 2018 (Congress is working on it now), which would have gotten them back in the black. They had also testified in May in Washington, D.C., in favor of a tariff on imported TVs, which would have given them a competitive advantage. As it stands — with a 25 percent tariff on Chinese components on top of the original 4.5 percent — the company can no longer operate.