As a site and blog that focuses on small, local businesses, especially more artisanal brands, we would be remiss to not write about the recent tariff trade war and how it will effect American businesses, especially small businesses.
I have had a few small businesses reach out to me this past week to discuss in confidence how this will effect their brand and how they are trying to find solutions to survive the high tariffs imposed on the countries they have create their products, buy their raw materials from or both.
This past week I was told by an employee that works with an American home decor company that only sells artisan fair trade goods that they are expected to raise their prices by 42% to incorporate the new tariffs. Their prices were already above average to make sure their foreign labor and domestic employees were paid fairly so now with such a dramatic increase in prices they feel achieving their sale goals was going to be a next to impossible task.
A local jeweler with a small online brand told me that all her raw materials and the artisans she uses to create her jewelry were from South East Asia so she would have to drastically increase her prices to make any profit. The prices of raw materials, especially gold were already high before the new tariffs were imposed so now she is challenged to find new affordable sourcing.
An industry that will be especially hard hit in the small business world is fashion as the US imports 98% of its clothing and 99% of shoes and accessories. There is zero fabric production in the United States as most fabrics come from Europe or Asia. There are currently not enough tanneries in the United States to supply our leather production. We are a complicated matrix from all around the world that creates all different types of products. This has been in effect for many decades now and it is not a quick fix. Virtually every item of clothing and accessories will be hit with additional duties, raising prices for consumers which is bound to bring about inflation to the US and the world.
Even if manufacturing was brought back to the United States, it takes years to bring a factory to life. First it must be funded, then there is finding a location with a nearby population that can work at the factory. After building a factory you must hire and train a work force whilst making the product at a competitive price.
As someone who formerly worked as a product developer and in production, I spent many years traveling abroad to Europe, Mexico and Asia to oversee production of American goods and there is a culture abroad that can provide mass production and smaller batch production that at this point in time America cannot compete with. To do this requires a long term plan with America reinvesting in new industries that will be needed in the future especially robotics, tech and materials for green energy.
Seeing America at work is definitely a task that should be on the agenda, however raising tariffs and having no real immediate plan as how to make this happen is not the answer. I have seen pundits representing the current government on the news this week giving answers that I know are wrong as to how to make this happen. Only time now will tell what is going to happen, however I have heard in the last week fear and panic from small business owners on how they are going to survive the latest trade wars and the fear is palpable.
The current government likes to claim they know what they are doing and the end will justify the means. They claim only the weak will not survive. We, the American people and the world deserve better than this.
By Natalie Rivera
