CaptiveAire president says tariffs hurting small businesses

North Carolina company CaptiveAire, one of the leading manufacturers of commercial kitchen ventilation systems, has incurred $15 million in tariff costs since April 2, “Liberation Day,” when President Trump announced a universal 10% tariff on all imported goods.

While the business says they’ve done well overall, they say it shows how these costs could prove detrimental to smaller businesses. 

“We didn’t really consider it to be Liberation Day,” Robert Luddy, president of CaptiveAire, told the Carolina Journal. “I decided early on that we would not pass along any tariffs to our customers.”

Due to its decision not to pass along tariff costs to its customers but rather to absorb them, CaptiveAire has not seen a decrease in sales. In fact, according to Luddy, it has seen an increase, as its competitors are raising prices. 

“One thing to keep in mind with tariffs is they raise costs, and as costs increase, you will have a demand decrease,” said Luddy. 

In 2026, CaptiveAire celebrates 50 years of producing commercial kitchen ventilation systems and a modern HVAC package unit that delivers outside air, clean air, and modulating performance for customers across North America, the Caribbean, Mexico, and Central America.

“CaptiveAire is in a very strong position… and we’re strong financially,” Luddy said. “For most businesses, they cannot absorb the tariffs; their margins are lower, and their financial capabilities are not as strong. Tariffs are devastating to economic growth, particularly to small businesses and all to emerging businesses.” 

But CaptiveAire has not always been in such a strong position; 30 years ago, it was a small company, according to Luddy. 

“Now it’s a major company in the HVC industry,” he said. “Spawning and growing a company, I think many people don’t realize it takes decades… For most businesses, it takes a very long period of time to reach fruition and strong financial health. So anything that interferes — higher taxes, more regulation, tariffs — is a major negative for long-term economic growth.” 

On March 5, CaptiveAire filed a lawsuit in the Court of International Trade seeking to recover the tariffs it has paid. Currently, the company incurred about $15 million in the first year after April 2, 2025.

“It’s going to be a long, slow, arduous process to get those tariffs back,” said Luddy. “CaptiveAire is primarily all US manufacturing except for international components that we purchase. So anything that violates free trade violates our ability to be competitive and to be an exporter.” 

The primary impact of the tariffs on CaptiveAire has been on the net profit margin.

“So the main impact would be adverse impact to profit,” said Luddy. “But because we haven’t raised our prices, our customers continue to reward us with orders. So we continue to grow as a company. Were we to manufacture or have subcontractors manufacture the products we buy abroad, they would cost more money in all cases than the tariffed product that we currently buy… Making everything in America is not a solution.”

Luddy also argues that tariffs are always harmful to consumers; if they weren’t, everything would be manufactured domestically. 

“We will always need our international companies and countries, because of comparative advantage,” said Luddy. 

Carolina Journal asked Luddy what he would say to President Trump about tariffs and their impact on American businesses.

“I would say America was built on free trade, and comparative advantage is an economic law which will never change,” Luddy said. “And we are very reliant on countries and companies around the world to produce the highest quality product in the US at the best price. Free trade is the cornerstone of America… Unilateral free trade is the best answer, it will always be the best answer, and there is no dispute as to material facts.”

Luddy said exceptionalism in America is all about freedom and that “Freedom produces incredible results.”

“Individuals can produce to their maximum capabilities based on their God-given talents, and when you interfere with that, you have fewer goods produced, you have less innovation, and less creativity,” Luddy concluded. “The government should do everything possible to provide the maximum freedom consistent with fair and justice for all citizens.”

“CaptiveAire president says tariffs hurting small businesses” was originally published on www.carolinajournal.com.