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We Are at the Limit": Trump's Tariffs Turn Small Businesses Upside Down
The article is on the front page of this morning's paper, below the fold.
“This has the potential to pull the carpet out.” Small businesses and startups are struggling to absorb the cost increases that come with Trump's tariffs.
Link to tweet
‘We Are at the Limit’: Trump’s Tariffs Turn Small Businesses Upside Down
They lack the wiggle room to absorb cost increases or shift production, and many are re-evaluating plans and strategies
By Ruth Simon
https://twitter.com/RSimon18
Ruth.Simon@wsj.com
Updated Aug. 8, 2018 4:27 a.m. ET
M2S Bikes, an electric-bike startup, planned to build itself a 100-strong dealer network. Then came the Trump administration’s proposed tariffs on China. ... The firm, which employs five people in Asheville, N.C., imports the bikes it designs from a factory in Jinhua City, China, and says it can’t find comparable motors in the U.S. The tariffs would add $425 to the cost of its bikes, which currently retail for as much as $3,250. The dealership idea is now on hold while the company tries to figure out a new wholesale price that dealers will accept and that won’t kill its profit.
The Trump administration says tariffs on thousands of items from ball bearings to circuit boards are designed to counter what it sees as unfair trade practices that give Chinese firms a leg-up over their U.S. rivals.
The U.S. has imposed 25% tariffs on $34 billion of Chinese imports, and on Tuesday finalized a list of $16 billion in Chinese imports that will be subject to 25% tariffs. U.S. officials have also said they are considering duties on $200 billion more. China has started to respond in kind and is threatening to impose tariffs on up to $110 billion of U.S. goods if Washington moves ahead.
The impact is now being felt particularly acutely by small businesses and startups. Broadly, this class of company, like others, feels good about the economy. But compared with larger operations, they have less ability to deflect higher materials prices or pass along new costs to customers.
....
—Eliot Brown contributed to this article.
Write to Ruth Simon at ruth.simon@wsj.com
Appeared in the August 8, 2018, print edition as 'Tariffs Unsettle Small Companies.'
They lack the wiggle room to absorb cost increases or shift production, and many are re-evaluating plans and strategies
By Ruth Simon
https://twitter.com/RSimon18
Ruth.Simon@wsj.com
Updated Aug. 8, 2018 4:27 a.m. ET
M2S Bikes, an electric-bike startup, planned to build itself a 100-strong dealer network. Then came the Trump administration’s proposed tariffs on China. ... The firm, which employs five people in Asheville, N.C., imports the bikes it designs from a factory in Jinhua City, China, and says it can’t find comparable motors in the U.S. The tariffs would add $425 to the cost of its bikes, which currently retail for as much as $3,250. The dealership idea is now on hold while the company tries to figure out a new wholesale price that dealers will accept and that won’t kill its profit.
The Trump administration says tariffs on thousands of items from ball bearings to circuit boards are designed to counter what it sees as unfair trade practices that give Chinese firms a leg-up over their U.S. rivals.
The U.S. has imposed 25% tariffs on $34 billion of Chinese imports, and on Tuesday finalized a list of $16 billion in Chinese imports that will be subject to 25% tariffs. U.S. officials have also said they are considering duties on $200 billion more. China has started to respond in kind and is threatening to impose tariffs on up to $110 billion of U.S. goods if Washington moves ahead.
The impact is now being felt particularly acutely by small businesses and startups. Broadly, this class of company, like others, feels good about the economy. But compared with larger operations, they have less ability to deflect higher materials prices or pass along new costs to customers.
....
—Eliot Brown contributed to this article.
Write to Ruth Simon at ruth.simon@wsj.com
Appeared in the August 8, 2018, print edition as 'Tariffs Unsettle Small Companies.'
1 replies
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