Don’t Look Up
There’s an asteroid headed for American small businesses, says Flexport CEO Ryan Petersen, whose logistics company helps businesses transport goods around the world.
Good Morning!
Here are today’s highlights:
Some small U.S. manufacturers are in fact benefitting from the tariffs.
Rob Levin says there’s still a talent crisis confronting small businesses.
Michael Girdley says it’s insane to trash the SBA and the 7(a) loan.
Price hikes are already upending the wedding industry.
THE TRADE WARS
The CEO of Flexport, Ryan Petersen, says that if small businesses could have moved their manufacturing out of China, they would have: “Petersen is explaining to anyone who will listen why hefty U.S. tariffs on Chinese imports could be catastrophic for America’s small businesses. ‘If they don’t change the tariffs, it’s going to be an extinction-level, asteroid-wiping-out-the-dinosaurs kind of event,’ he told me. ‘Only these aren’t dinosaurs. These are dynamic, healthy businesses.’ He knows this because those businesses are his customers. They use Flexport to transport products from the factory to your front door. Petersen’s company handles everything from booking space on planes, trucks, and enormous ocean carriers to managing all the tedious paperwork along the way. It’s a sleek tech platform that gives Petersen a window into the entire global economy, providing a real-time look at the situation on the ground and on the water.”
“He can track exactly how much it costs to ship any item anywhere—and how much more it costs because of tariffs. His company has visibility into about 1 percent of U.S. trade, he said, which is more than enough data for him to connect dots. ‘We have a pretty good view of what’s happening,’ he says. And what’s happening isn’t pretty.”
“If the tariffs on Chinese goods continue at this rate, he says, thousands of American companies will fail and millions of employees will lose their jobs. President Trump says the current 145-percent tariffs on Chinese imports will come down substantially. But until then, companies are operating in conditions of tremendous uncertainty. For now, they are paralyzed. Before long, they could be pulverized.”
“This past week, he traveled from San Francisco to Washington, D.C., where he spent two days meeting with government officials to make the case that tariffs pose an existential threat to his customers. America’s biggest and most powerful businesses have armies of lobbyists and CEOs who dine with the president. Even for them, tariffs are disruptive. But for America’s small businesses, they could be destructive.”
“Through no fault of their own, he explains, their business models have broken. They can’t afford the latest tariffs on Chinese goods. But Vietnam’s factories won’t bother with their production jobs, so they also can’t move their manufacturing out of China. ‘If they could,’ Petersen said, ‘they would have.’ Meanwhile, there is too much in flux to figure out what they should do. And if they haven’t moved their supply chains already, there’s no point in moving them yet. ‘It’s either too late or too early,’ Petersen said.” READ MORE
