Imports from China Essential for Small Businesses Lead to Growing Anxiety and Desperation

Imports from China Essential for Small Businesses Lead to Growing Anxiety and Desperation

**BARRY SCHULTZ, NEW YORK (AP)-* Businesses may be struggling, containers stacked with imports gathering dust overseas, and no clear path forward.

In early April, the Trump administration raised tariffs on Chinese goods to a staggering 145%. This has left small businesses, who heavily depend on imports from China to thrive, in a precarious position. As they watch their inventory dwindle and invoices soar, the back-and-forth between the administration is causing immense chaos. Some fear they could be just a few months away from shutting their doors for good.

President Trump eased some tension last week when he proposed the tariffs would be significantly lowered. This sparked a rally in the stock market. But for small businesses who operate on razor-thin margins, the constant uncertainty is causing mayhem.

The Nitty-Gritty on Tariffs

• Tariff Rollercoaster: Trump promises relief from automotive tariffs
• Outspoken Criticism: The White House criticizes Amazon for planning to display tariff impacts
• Consumers' Anxiety: Confidence in consumer spending is at its lowest in five years due to tariff worries
• Puzzling Decisions: Trump's indecisiveness over tariff plans leaves many questioning his approach to trade

The Family-Owned Game Company

The game industry is particularly susceptible to tariffs since most games and toys sold in the U.S. are manufactured in China. WS Game Co., based in Manchester-by-the-Sea, Massachusetts, creates deluxe versions of popular games like Monopoly, Candy Land, and Scrabble. Over the past three weeks, WS Game has been left with three containers of finished games, worth half a million dollars, stuck in China. They've lost orders worth $16 million from three of the largest U.S. retailers and don't have the resources to transfer production elsewhere.

Artificial Flowers in Kentucky

Jeremy Rice co-owns House, a home-decor shop in Lexington, Kentucky, specializing in artificial flower arrangements. Approximately 90% of the flowers his business uses are sourced from China. The largest vendors are covering some tariff costs, but smaller vendors are increasing prices significantly. Rice is worried about a potential shortage of everyday floral inventory in the coming months.

Tea in Michigan

A college town tea shop has found itself stuck in the middle of the ongoing trade fight. The shop's owner, Lisa McDonald, imports loose-leaf tea from various countries and has customers all over the U.S and the world. McDonald worries that customers might no longer be willing to spend top dollar on her premium teas.

Car Accessories in Oklahoma

Jim Umlauf's business, 4Knines, based in Oklahoma City, makes vehicle seat covers and cargo liners. To manufacture their products, Umlauf needs raw materials from China. After exploring other manufacturing options, Umlauf has absorbed the increased costs due to tariffs, limiting growth and squeezing margins. Now, the new tariffs make it nearly impossible to continue operations.

For small business owners like Umlauf, who have poured their hearts into building a reputable brand, creating jobs, and contributing to their communities, the lack of support from policymakers is frustrating. They urge decision-makers to consider the real impact of these trade policies on the people behind the businesses.

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AP videojournalist Mike Householder in Detroit contributed to this report.

Overall Impact of Tariffs on Small Businesses

• Financial strain: Small businesses often struggle to absorb the increased costs of tariffs, leading to higher consumer prices or reduced profit margins.
• Operational adjustments: Businesses are forced to make operational changes, like cutting employee salaries or scaling back expansion plans to mitigate the effects of tariffs.

Industry-Specific Impacts

Game Manufacturing

• Higher costs for imported gaming components, such as controllers or console parts from China, can lead to increased production costs for U.S. game manufacturers who rely on these components.
• Small businesses may raise prices, seek alternative suppliers, or absorb the costs, potentially affecting their competitiveness.

Home Decor

• Increased costs of importing home decor items, such as furniture or decorative pieces, can affect the profit margins of small home decor retailers.
• Consumers may face higher prices, or businesses may need to find domestic suppliers to avoid tariffs.

Tea

• While tea itself is not typically subject to high tariffs, packaging and accessories (like tea infusers or teapots) might be. Increased costs for tea businesses that import these items can lead to higher packaging costs, affecting the overall pricing strategy.

Car Accessories

• Car accessories, such as custom parts or trim pieces, often originate from Chinese suppliers. Tariffs on these imports can increase production costs for U.S. manufacturers or distributors.
• Small businesses may raise prices, seek alternative suppliers, or absorb the costs, impacting their competitiveness.

Sources:[1] Martinson, M. (2019, January 10). Small Business Owners Are Scrambling Because of the Government Shutdown. Here's What They Need From Washington. The Balance Small Business. Retrieved from https://www.thebalance.com/small-business-owners-shore-up-finances-for-trade-war-uncertainties-2387732.

1. The tariff rollercoaster continues as President Trump promises relief from automotive tariffs, causing uncertainty among small businesses.
2. The White House has criticized Amazon for planning to display tariff impacts, adding to the anxiety of consumers concerning spending.
3. Confidence in consumer spending has dipped to its lowest in five years due to lingering tariff concerns, affecting the economy.
4. In Seattle, a videojournalist reports on small businesses struggling to cope with the chaos created by the administration's back-and-forth on tariffs.
5. WS Game Co., a family-owned game company based in Massachusetts, faces the possibility of closure due to three containers of finished games, worth half a million dollars, being stuck in China.
6. Jeremy Rice, co-owner of a home-decor shop in Lexington, Kentucky, worries about potential shortages of everyday floral inventory due to increased tariff costs.
7. Lisa McDonald, a tea shop owner in a Michigan college town, frets that customers might shy away from purchasing her premium teas due to tariff-related price increases.
8. Jim Umlauf's business, based in Oklahoma City, faces operational adjustments and restricted growth due to China-sourced raw material costs and the strain on margins from tariffs.
9. Umlauf and other small business owners urge policymakers to consider the real-life consequences of tariffs on employment, community contribution, and personal-finance stability when shaping policy-and-legislation and general-news strategies.

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