{"id":34171,"date":"2024-11-01T04:35:32","date_gmt":"2024-11-01T09:35:32","guid":{"rendered":"https:\/\/ustower.net\/?p=34171"},"modified":"2024-11-01T04:35:35","modified_gmt":"2024-11-01T09:35:35","slug":"after-six-years-of-tariffs-small-business-owners-arent-eager-for-more","status":"publish","type":"post","link":"https:\/\/ustower.net\/?p=34171","title":{"rendered":"After six years of tariffs, small-business owners aren\u2019t eager for more"},"content":{"rendered":"\n

With former President Donald Trump floating higher and more far-reaching tariffs<\/a> if he\u2019s elected to a new term, small businesses that sell everything from bikes to beer are nervous about another cost hike that they\u2019d have to pass on to customers.<\/p>\n\n\n\n

Chris Smith, the co-founder of Virginia Beer Co. in Williamsburg, Virginia, remembers when he first spotted a 5.5% surcharge on a statement from one of his suppliers, a U.S.-based seller of tap handles manufactured in China. The fee turned up in September 2019, after Trump placed 25% tariffs on steel, and hasn\u2019t gone away since.<\/p>\n\n\n\n

Smith spends anywhere from $15,000 to $20,000 each year on tap handles emblazoned with the names of his beers \u2014 with about $1,000 of that covering the cost of the tariff. He sells them to distributors that get them placed in bars and restaurants that sell his draft beers, increasing the price to cover the tariff surcharges.<\/p>\n\n\n\n

\u201cThe beer business specifically is a low-margin, high-volume business,\u201d he said. \u201cWe don\u2019t have the volumes that a major player has just by virtue of our size.\u201d<\/p>\n\n\n\n

By contrast, Constellation Brands, which imports Corona and Modelo from Mexico and recently reported<\/a> about $3 billion in quarterly revenue, has waved off concerns<\/a> about further tariffs, saying the company thrived under Trump. But smaller operators have less wiggle room, Smith said: \u201cAny increase in our input costs absolutely affects our profitability.\u201d<\/p>\n\n\n\n

Small-business owners have already been facing tariffs on billions of dollars of goods, most of them from China, implemented by Trump in 2018. The Biden administration, which largely kept them in place, unveiled new levies<\/a> of its own in May \u2014 though experts say they\u2019re mostly symbolic moves<\/a> in a green-tech standoff. So far, the tariffs in force under both White Houses have cost Americans $79 billion<\/a>, the nonpartisan Tax Foundation estimated this summer.<\/p>\n\n\n\n

Consumers who\u2019ve been finding their footing after a historic run-up in inflation \u2014 which had little to do with federal trade policy \u2014 aren\u2019t likely to have seen tariffs dent their wallets<\/a> dramatically beyond a few targeted products in recent years, like washing machines or solar panels.<\/p>\n\n\n\n

But \u201cif you were a business owner and your supply of something from China was directly impacted, then you definitely noticed,\u201d said Erica York, a senior economist at the Tax Foundation.<\/p>\n\n\n\n

Many of the large U.S. companies facing tariffs have either rejiggered their supply chains to avoid them or else eaten the cost, wholly or in part. Bigger firms tend to have more flexibility to source new suppliers and more leverage to negotiate terms, experts say.<\/p>\n\n\n\n

\u201cFor the small businesses, unfortunately they\u2019re not in a position where they can absorb those additional costs,\u201d said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, a major trade group.<\/p>\n\n\n\n

The nation\u2019s roughly 33 million small businesses employ nearly half the nation\u2019s workers and generate more than 43%<\/a> of the gross domestic product, the U.S. Chamber of Commerce estimates. And it\u2019s small and medium-sized firms that disproportionately bear the burden of tariffs, Gold said; in many cases, \u201cthey\u2019ve got to go ahead and pass those costs directly on to the consumer.\u201d<\/p>\n\n\n\n

That\u2019s what Ryan Zagata, the founder of Brooklyn Bicycle Co. in New York City, had to do. He estimated that 95% of the over 100 parts needed to build a bike are made overseas.<\/p>\n\n\n\n

\u201cWhether we like it or not, Asia is the bike manufacturing hub of the world,\u201d said Zagata, who raised prices by between 18% and 22% after the Trump tariffs took hold. He expects he\u2019d have to hike further if a re-elected Trump were to impose his promised 20% blanket levy on all imports.<\/p>\n\n\n\n

In addition to that tariff, the GOP nominee also calls for a duty of at least 60%<\/a> on goods from China, a 100% tariff<\/a> on countries that ditch the dollar as a common trade currency, and a 2,000% tariff<\/a> on vehicles built in Mexico.<\/p>\n\n\n\n

The tariffs that small and medium-sized businesses have shouldered under the current and prior administrations are \u201cpretty extreme\u201d by historical standards, said Felix Tintelnot, an international trade economist at Duke University. \u201cIn the last 75 years, we didn\u2019t have tariff levels anywhere near as high.\u201d<\/p>\n\n\n\n

Taken together, these proposed duties would be \u201cmagnitudes larger\u201d than those Trump implemented years earlier, said York, and could be \u201cmassively disruptive to the way businesses have planned their supply chains.\u201d She expects more severe, long-lasting tariffs would have a \u201cchilling effect\u201d on investment and could encourage retaliation from other countries. Even Germany, a key U.S. ally and trade partner, has warned of that outcome<\/a>.<\/p>\n\n\n\n

Economists broadly oppose Trump\u2019s tariff plans, saying their main outcome<\/a> would be higher costs for consumers. Last week, a joint letter<\/a> by nearly two dozen Nobel-winning economists warned that Trump\u2019s proposed \u201chigh tariffs even on goods from our friends and allies and regressive tax cuts for corporations and individuals, will lead to higher prices, larger deficits, and greater inequality.\u201d <\/p>\n\n\n\n

The Trump campaign has repeatedly dismissed these forecasts, asserting that vast revenue from additional tariffs would fund everything from further tax cuts to new child care subsidies.<\/p>\n\n\n\n

\u201cThese Wall Street elites would be wise to review the record and acknowledge the shortcomings of their past work if they\u2019d like their new forecasts to be seen as credible,\u201d Trump campaign adviser Brian Hughes said in a statement, asserting that tariffs would spur job growth and drive down inflation.<\/p>\n\n\n\n

San Diego-based entrepreneur Nichole MacDonald said profit margins for her patented, 10-pocket Sash Bag have been thinning in recent years as material and freight costs have jumped, and tariffs aren\u2019t helping.<\/p>\n\n\n\n

She sells her product \u2014 which was mainly manufactured in China before Trump\u2019s 2018 tariffs \u2014 mostly online, and its costs went up about 25% in their wake, she said. She has since shifted some manufacturing to India but has largely eaten the cost increases. About 70% of her customers return for subsequent purchases, and she worries about alienating such a loyal clientele with price hikes.<\/p>\n\n\n\n


\u201cI don\u2019t have the option to produce in the U.S.,\u201d MacDonald said, estimating her production costs would double if she switched to exclusively American suppliers. \u201cSo I\u2019m going to keep doing what I\u2019m doing, because otherwise I\u2019m going to have to completely disrupt my business.\u201d<\/p>\n\n\n\n

\u201cThe people who are implementing these policies aren\u2019t in touch with what\u2019s actually happening,\u201d she added. \u201cI would have voted for Kamala Harris anyway, for a lot of other reasons, but I also am a little disappointed that the Biden administration didn\u2019t address this.\u201d<\/p>\n\n\n\n

Vice President Kamala Harris has slammed Trump\u2019s tariff agenda as a \u201cnational sales tax\u201d but hasn\u2019t detailed her plans for levies that already exist. Her campaign didn\u2019t respond to a request for comment.<\/p>\n\n\n\n

While entrepreneurs like MacDonald don\u2019t have viable alternatives to suppliers abroad, many small businesses take pride in producing domestically, and some say they\u2019re committed to doing so regardless of the election outcome. Not only can \u201cMade in America\u201d be a marketing advantage, in some cases it\u2019s also a hedge against another trade war.<\/p>\n\n\n\n

Sara Hauman, owner of the Portland, Oregon-based tinned fish brand Tiny Fish Co., isn\u2019t too worried. She has always tried to source and manufacture domestically, and only one part of her packaging comes from abroad, a purchase she usually makes just once a year.<\/p>\n\n\n\n

\u201cWe will inevitably be affected by tariffs in one way or another,\u201d she acknowledged, \u201cbut because our vision is to use small, independent producers and manufacturers located on the West Coast, we limit ways in which we can be affected.\u201d<\/p>\n\n\n\n

Zagata said he isn\u2019t \u201cnaive\u201d and understands the increasingly bipartisan case<\/a> for protectionism, but he doesn\u2019t believe China will pay for tariffs, as Trump has suggested. So his company is already considering how to handle potential new levies without compromising on quality or affordability.<\/p>\n\n\n\n

\u201cWe\u2019re going to survive,\u201d Zagata vowed. \u201cWe\u2019re going to adjust. We\u2019re going to do what we can.\u201d<\/p>\n\n\n\n

Nbcnews<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

With former President Donald Trump floating higher and more far-reaching tariffs if he\u2019s elected to a new term, small businesses that sell everything from bikes to beer are nervous about another cost hike that they\u2019d have to pass on to customers. Chris Smith, the co-founder of Virginia Beer Co. in Williamsburg, Virginia, remembers when he first spotted […]<\/p>\n","protected":false},"author":5,"featured_media":34172,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[26937,3616,31045,1230],"class_list":["post-34171","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics","tag-small-businesses","tag-tariffs","tag-tax-rates","tag-trump"],"_links":{"self":[{"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts\/34171","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34171"}],"version-history":[{"count":1,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts\/34171\/revisions"}],"predecessor-version":[{"id":34173,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts\/34171\/revisions\/34173"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/media\/34172"}],"wp:attachment":[{"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34171"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}