{"id":89026,"date":"2025-05-10T03:17:09","date_gmt":"2025-05-10T03:17:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/89026\/"},"modified":"2025-05-10T03:17:09","modified_gmt":"2025-05-10T03:17:09","slug":"i-dont-have-the-cash-to-pay-for-these-tariffs-us-small-biz-suffers-trade-war","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/89026\/","title":{"rendered":"\u2018I don\u2019t have the cash to pay for these tariffs\u2019: US small biz suffers | Trade War"},"content":{"rendered":"

After working in the outdoor industry for three years at Smith, which makes helmets and goggles, Cassie Abel realised there were not many brands built exclusively with women in mind. In 2016, she founded Wild Rye, a rural Idaho-based outdoor apparel brand for women.<\/p>\n

Building her business was a labour of passion and included big risks, such as leveraging her house for capital. It was not until 2021 that she became profitable. Now, her business faces yet another existential threat: High tariffs will drive up her costs, and she\u2019s unsure how long she can keep her business alive.<\/p>\n

Abel is expecting $700,000 worth of purchase orders arriving in July, which encompasses the brand\u2019s full fall lineup, which she ordered in December from suppliers in China. She says Wild Rye, which imports twice a year, will now be subject to $1.2m in tariffs for its upcoming shipment.<\/p>\n

\u201cI don\u2019t have the cash to pay for these tariffs. These tariffs are due upon entering the country. I won\u2019t have time to sell this product before the tariffs are done. We could be out of business in the next four months,\u201d Abel said.<\/p>\n

Since taking office, United States President Donald Trump has imposed a 145-percent tariff<\/a> on China and 10 percent on all other countries. The president has claimed the tariffs incentivise businesses to bring manufacturing back stateside. But that has left hundreds of small businesses like Abel\u2019s scrambling to find ways to manage the hefty fee.<\/p>\n<\/p>\n

\u00a0<\/p>\n

US Treasury Secretary Scott Bessent told a group of reporters at a White House briefing last week, \u201cThe goal here is to bring back the high-quality industrial jobs to the US. President Trump is interested in the jobs of the future, not the jobs of the past. You know, we don\u2019t need to necessarily have a booming textile industry like where I grew up again, but we do want to have precision manufacturing and bring that back.\u201d<\/p>\n

His comments put additional pressure on employers like Wild Rye. To weather the storm caused by the Trump administration\u2019s tariffs, Abel has frozen hiring, paused salary increases for her 11 full-time employees, and stalled new product development. She said she will need to raise prices on her products for the fall, ranging from 10 to 20 percent.<\/p>\n

On April 29, she and hundreds of members of the outdoor apparel community met leaders in Washington to push for assistance. Abel said Democrats were unsure what they could do amid Republican control of the House of Representatives and Senate, while Republican leadership feared retribution if they went against the president.<\/p>\n

\u201cI was hearing it [concern] from both sides of the aisle. There\u2019s frustration, it\u2019s like it\u2019s hard to find a path forward. Everyone understands that small businesses are going to crumble, and everyone feels like there\u2019s no playbook for this,\u201d Abel told Al Jazeera.<\/p>\n

The US Chamber of Commerce has also pushed the White House to carve out exceptions for small businesses like Wild Rye, which the Trump administration quickly dismissed.<\/p>\n

No comparable US alternative<\/p>\n

Abel says she started as a made-in-USA brand, but that was not financially sustainable.<\/p>\n

\u201cThat almost tanked the business before we launched because the US simply doesn\u2019t have the capability or capacity to produce technical apparel,\u201d Abel said.<\/p>\n

Most textile products like clothes and shoes that Americans buy are not made in the US. The US imports about 97 percent of clothes, mostly from Asian countries including China, which has been hit hard by the 145-percent tariffs, but also from Vietnam and Bangladesh.<\/p>\n

But it\u2019s not just the apparel industry facing this challenge. It\u2019s the entire small business community \u2013 defined as a business with 500 employees or less \u2013 a portion of the economy that employs roughly 61.7 million Americans, representing 45.9 percent of the US workforce and accounts for 43.5 percent of the US gross domestic product (GDP).<\/p>\n

The broader economy has also already <\/a>felt shockwaves from the tariffs that will impact small businesses. The US GDP fell in the first quarter, per the US Commerce Department, by 0.3 percent after a 2.4 percent increase in the fourth quarter of 2024. According to ADP, job growth stumbled to 62,000\u2014a more immediate metric than the US Labor Department\u2019s jobs report, which lags by a month and shows 177,000 jobs added.<\/p>\n

Consumer confidence hit a 13-year low, and consumers are pulling back spending amid fears of further rising costs \u2014 which, in turn, means fewer people could buy products ranging from outdoor apparel to single-origin teas and spices.<\/p>\n

\u2018In a tough place\u2019<\/p>\n

In 2014, Chitra Agrawal founded Brooklyn Delhi, an Indian cuisine-inspired food brand in Brooklyn, New York, with her husband Ben Garthus.<\/p>\n

Over the last decade, they have created a range of products, including 14 different condiments and simmer sauces, that started as handmade and have since grown into a large-scale business distributing to major retailers like Whole Foods and Kroger, as well as meal kit services like HelloFresh and Blue Apron.<\/p>\n

\"ChitraBrooklyn Delhi cofounders Chitra Agrawal & Ben Garthus brace for a rise in expenses as the business imports nearly 70 percent of its ingredients from outside the United States [Brooklyn Delhi]<\/p>\n

Because hers is a specialty brand, sourcing certain ingredients from other parts of the world is not just part of the brand\u2019s allure, it is also a necessity.<\/p>\n

\u201cWe are making these authentic Indian products that require ingredients that are just not grown or available at scale in the US. It kind of puts us in a tough place,\u201d Agrawal told Al Jazeera.<\/p>\n

Agrawal said 65 percent to 70 percent of the ingredients she uses come from outside of the US, primarily from India, and a handful from Mexico and Sri Lanka, as well as glass from China.<\/p>\n

\"AnjalisCup_FounderPortrait_photobyJustinHackworth_1731Anjali\u2019s Cup owner Anjali Bhargava says she will have to discontinue some of the brand\u2019s products to stay afloat [Justin Hackworth\/Anjali\u2019s Cup]<\/p>\n

Like Agrawal, Anjali Bhargava faces a similar challenge. The founder of Anjali\u2019s Cup, a brand that makes single-origin spices and teas from around the world, sources ginger from Vietnam, turmeric from Thailand, and tea from India, ingredients that, in her view, make the brand so special.<\/p>\n

In 2024, the United States was the largest importer of both ginger and several different varieties of tea, including black and green, according to Tridge, a global food sourcing data analytics firm.<\/p>\n

\u201cI am going to have to pay the tariffs on those things if it comes down to it, if I want to continue making those products. [Not being able to make these products] is not negotiable for me,\u201d Bhargava said.<\/p>\n

She says that in order to cut costs, she is trying to find domestic alternatives for aspects of her production, like packaging, a big expense. Pre-tariffs, she imported tins from China. Once her stock runs out, she may have to discontinue four to six of the 11 products she offers because she cannot afford the extra cost for imports.<\/p>\n

\u201cBasically, to keep the business moving, I\u2019m being forced to undertake a complete overhaul of my retail packaging [which can be produced stateside], which means redesigning, re-photographing, and that comes with a cost,\u201d Bhargava added.<\/p>\n

She says she will need to move away from tins, which she imports from China and explore other kinds of packaging options like pouches. The unexpected one-time costs of $10,000 to $20,000 will eat into her already slim margins, Bhargava says. She is the only full-time employee, but hires freelancers and outsources to other businesses for tasks ranging from packaging to delivery.<\/p>\n

Prices go up<\/p>\n

Unlike larger companies, it\u2019s much harder for small businesses to absorb the tariffs.<\/p>\n

\u201cWe\u2019ve seen that it\u2019s hard for small businesses to balance those costs as they have very small margins. They are the ones who are going to get hit hardest,\u201d said Alexis D\u2019Amato, director of government affairs for Small Business Majority, an advocacy group for small businesses.<\/p>\n

\u201cThey\u2019re bracing for impact on how they\u2019re going to either eat these costs or pass them on to the consumer, which nobody wants to do,\u201d D\u2019Amato added.<\/p>\n

Raising prices in response to market pressures does not guarantee they will fall when costs decline. At the start of the COVID-19 pandemic, supply chain disruptions forced producers to increase prices. But even after costs eased, grocers kept prices high because consumers continued paying them \u2014 and no policy or market force compelled reductions.<\/p>\n

That burden weighs on Agrawal.<\/p>\n

\u201cOnce you make that change and say at one point, I want to roll back those price increases, there\u2019s no guarantee that on the shelf, the prices will decrease. It\u2019s very difficult when you\u2019re working with grocery stores to get your prices to be lowered again. We have to really be very careful about this move. We\u2019re still contemplating it,\u201d said Brooklyn Delhi\u2019s Agrawal.<\/p>\n

But these looming concerns have led consumers and businesses to import goods before tariffs kick in, to stock up on key items that may help them avoid raising prices, at least for some time.<\/p>\n

In the first quarter, US imports surged by 41.3 percent, including by entrepreneurs like Sean Mackowski, owner of Tallon Electric, a company that makes guitar pedals in Columbus, Ohio.<\/p>\n

\u201cWe did stock up a lot. I think everybody did their best to scramble, hoping that that will bridge the gap to this going away. But if we get to the end of that bridge, we\u2019ll either need to find a different way or we\u2019re going to start running out of stuff,\u201d Mackowski told Al Jazeera.<\/p>\n","protected":false},"excerpt":{"rendered":"After working in the outdoor industry for three years at Smith, which makes helmets and goggles, Cassie Abel…\n","protected":false},"author":2,"featured_media":89027,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,12633,1700,3058,285,363,1200,1219,16,5664,15,49,286],"class_list":{"0":"post-89026","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-business-and-economy","10":"tag-economy","11":"tag-international-trade","12":"tag-politics","13":"tag-retail","14":"tag-tax","15":"tag-trade-war","16":"tag-uk","17":"tag-unemployment","18":"tag-united-kingdom","19":"tag-united-states","20":"tag-us-canada"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114481374569379008","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/89026","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=89026"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/89026\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/89027"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=89026"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=89026"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=89026"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}