Peter Lehnen, president and owner of Lehnen Industrial Services, introduces Keene Mayor Jay Kahn during an opening reception for Lehnen Lab in October. (Courtesy of Lehnen Industrial)
Tariffs, even talk about them, has introduced chaos into the economy, says a Keene business owner, and they could cause his company a $750,000 contract and possibly its future. A regional business group says tariffs could damage New Hampshire’s economic ties with Canada.
Peter Lehnen, president of Lehnen Industrial Services, shared his observations during a recent telephone interview about the plan by President Donald Trump to impose 25% tariffs on Mexico and Canada, mostly across the board, and a 10% tariff on China.
Trump has put the Mexico and Canada tariffs on hold until March but has recently threatened tariffs against the European Union, too. Lehnen says the tariffs may ultimately be imposed and that they have already caused damage.
Tariffs “become an excuse for prices going up, and if the tariffs actually went into effect, it’d certainly be an excuse for everybody to raise prices,” said Lehnen, whose company makes process control machinery for manufacturers, including the life sciences industry.
Uncertainty about tariffs has already delayed a major contract, he said.
“We actually have one project happening right now, a three-quarter-million-dollar project, which we proposed eight months ago,” Lehnen said. “The customer selected us as the vendor, and they were supposed to purchase it right at the end the year, but because of tariffs they’re reconsidering and that’s devastating to us.”
Lehnen Industrial, founded in 2001, has 23 employees and is located in what Lehnen called the “life sciences triangle” of Boston, Keene and Portland, Maine. Annual sales are in the range of $6 million to $7 million, Lehnen said.
While not a Trump supporter, Lehnen said he believes tariffs have a place in the global economy for specific purposes. China, for example has subsidized the metal germanium, making it financially impractical for other countries to produce it, he said.
Germanium is “critical to our military infrastructure, optics and to space exploration,” Lehnen said.
“The world has no supply because China wrapped it all up. That is a legitimate and actually strategically necessary reason to use tariffs,” he said.
The NH-Canada connection
Trump has used tariffs as a negotiating cudgel against allies, including Canada, a major trading partner to New England states.
About $10.2 billion of motor fuels, natural gas and electricity annually come from Canada into New England, according to the New England-Canada Business Council, a nonprofit trade group. Eighty percent of New England’s gasoline and diesel come from Irving Oil’s refinery in St. John’s, New Brunswick, as does 90% of jet fuel used at Logan Airport.
Citing the Embassy of Canada, the U.S. Census Bureau and Dun & Bradstreet, the council said New England cumulatively exported $9.4 billion of goods to Canada and $4.2 billion worth of services in 2023.
That same year, New Hampshire exported $1.4 billion of goods to Canada, including, in descending order, agricultural machinery; natural gas and other gases; animal meats; pharmaceutical products; animal feed; precision instruments; iron and steel tubes, pipes and sheets; pasta, breads and cereals; plastics and plastic articles; and tractors.
The Canadian Army has contracted with Newington-based SIG Sauer Inc. to purchase 7,000 P320 pistols and holsters with an option to buy 9,000 more pistols and holsters.
The Canadian embassy said there are 89 Canadian-owned companies in New Hampshire that employ 4,750 workers here.
New Hampshire imported $2 billion worth of products from Canada in 2023 led by fuel oil, $444 million; engines and turbines, $140 million; fish and crustaceans, $111 million; as well as petroleum coke and bitumen; wood and semi-finished wood products; softwood lumber; animal meats; aircraft and parts; iron and steel tubes, pipes and sheets; and aluminum and aluminum articles.
On its fact sheet, the Canadian embassy describes Canada and New Hampshire as an “integrated economy,” between “friends, partners, allies.”
Overall, there was nearly a trillion-dollars worth of two-way trade between Canada and the U.S., the embassy said, with Canada being the No. 1 export destination for 36 states, New Hampshire among them.
During a Jan. 31 webinar hosted by the New England-Canada Business Council, Christopher Guith, senior vice president of the U.S Chamber of Commerce’s Global Energy Institute, said tariffs restrain trade and are a hindrance to economic growth.
A 25% tariff on Canadian products would make things “expensive” for many Americans. Yes, the U.S. is the largest producer of oil in the world, he said, but it’s the light and sweet kind that Guith equated to Dom Perignon champagne.
Meanwhile, Canada’s western provinces pump a high-sulfur oil that is “kind of like the Budweiser” of oils, he said, but which Canada has the means to process and sells “at a discount,” whereas American oil sells “at a top price.”
Guith warned that if tariffs were imposed on Canada, the cost of diesel and jet fuel “will go up in days, not weeks.”
Everyone can disagree on Trump’s premise that the U.S. has been taken advantage of by Canada and that tariffs would even that imbalance, Guith said, but Canada needs to show its willingness to work with him.
Trump delayed tariffs on Mexico after that country agreed to put 10,000 soldiers on the U.S. and Mexico border to stop illegal immigration and the flow of fentanyl; Canada has offered to do the same.
Guith noted that in December, China stopped the export of three minerals to the U.S. — gallium, germanium and antimony — that the Reuters news agency said have “widespread military applications.”
Canada produces those minerals, he said, and also a lot of uranium, which is refined in the U.S. and could be used for nuclear energy.
Taylor Caswell, commissioner of the state’s Department of Business and Economic Affairs, acknowledged the importance of the Granite State’s relationship with its northern neighbor.
“The State of New Hampshire and the Eastern Canadian Provinces have a long cultural and economic history that continues to this day,” Caswell said via email. “I hope that the federal governments of our two nations can work together to avoid the imposition of any tariffs and the associated negative economic impacts.”
Two major Canadian businesses that the Canadian Consulate said were willing to contribute to this article declined. A representative of a New Hampshire company, speaking off the record, said they feared professional and possibly personal retribution for making public comments.
The New Hampshire congressional delegation, all of whom are Democrats, have publicly opposed Trump’s tariffs.
Congresswoman Maggie Goodlander, who represents the Second Congressional District, which covers Coos County, recently toured the district and met with Adam Hammill, the owner of Exile Burrito on Main Street in Berlin.
Hammill, who acknowledged that he knew the industry was extremely volatile when he opened his restaurant in May 2020, thinks it might not make it to its fifth anniversary. Exile Burrito began with 14 employees and now has seven. He worries there might be costs increased to his business caused by the tariffs.
“We’ve already gone into debt this year just to stay open, to keep my team, but I’ve reached a tipping point where we can’t take out any more personal debt and we can’t take out loans,” he said.
Goodlander said tariffs are “an essential tool for our country to level the playing field for American workers and small businesses and to combat anti-competitive practices,” but cautioned that they “must be used strategically and thoughtfully.”
Trump’s tariffs on what she called “our biggest trading partners and neighbors” are both “sweeping and reckless, and I am deeply concerned that people in New Hampshire will pay the price. In particular, I am concerned that President Trump’s tariffs will drive up the cost of everything from cars and gas to housing, heat and groceries for hard-working Granite Staters.”
Jim Brett, the president and CEO of the nonpartisan Boston-based New England Council, repeated several of those points of view in both a press release and a telephone interview. The century-old nonprofit is an alliance of business, academic and health institutions that also includes labor unions.
“People always marvel ‘how do you (the council) have unions and CEOs,’ and the answer is, ‘We want everybody at the table to express their view (because) if you’re not at the table, you’re on the menu,’” said Brett, who served in the Massachusetts House of Representatives as a Democrat for 16 years and was chairman of its taxation committee.
Brett suggested that Trump could put off discussion on tariffs until 2026, when the United States-Mexico-Canada Agreement is up for reconsideration, “but to do so now, and at a double-digit rate of increase, will cause a great deal of hardship in New England.”
‘I’ve seen this movie before’
Lehnen’s family hails from Murg, Germany. “My father was conscripted into the tank corps in Africa, and my mother was relentlessly bombed by the Allies,” the Keene business owner said. The Trump tariffs are the potential descent of the U.S. into totalitarianism, he said.
“Both my parents were hugely impacted by Hitler, and, basically, if I could be frank, were (messed) up for life. Mom died about 10 years ago, and Trump had just gotten elected (for his first term). She said, ‘I’ve seen this movie before; he’s going to do really bad things and it can happen here.’”
For a company like Lehnen Industrial to line up and secure a client could take up to three years, he said, and during that time, companies from other countries would likely be making their own pitches to that same would-be client.
“I don’t know which forces will dominate,” Lehnen said. “But I can tell you that the chaos being created by Trump right now is bad for business with absolutely no question about it.”
