There Are Still a Lot of Questions
For example: Isn’t a 30-percent tariff still pretty high? And what happens after 90 days?
Good Morning!
Here are today’s highlights:
In this week’s podcast episode, Ben Knepler takes us on his journey to try to build a better outdoor chair.
Does corporate America still want to win the talent war?
Fewer foreign workers seem interested in coming to America.
A new book takes us inside the world of multilevel marketing.
THE CHINA TRUCE
Normally, a 30-percent tariff on Chinese goods would be horrific: “While the temporary tariff relief was welcome news, businesses said they are still grappling with a higher tariff environment. Companies and trade associations warned of higher prices for the back-to-school and holiday shopping seasons. The Port of Los Angeles and other large U.S. ports said they don’t expect a huge surge in imports from China. And some business leaders said the uncertainty of whipsawing tariffs is still too high to chart a course forward. ‘In normal times, a 30-percent tariff on Chinese goods would be horrific news,’ said Steve Greenspon, CEO of housewares company Honey-Can-Do International. ‘Compared to 145-percent though, it’s phenomenal news. But it’s still going to mean higher prices and lower profits for companies.’”
“SharkNinja Chief Executive Mark Barrocas was obsessively checking his news feed Sunday night, looking for any sign that the U.S. and China would reach a tariff deal. Early Monday morning, the news came: a 90-day reprieve in which the U.S. would lower tariffs to 30 percent from 145 percent. Barrocas immediately instructed factories in China to release goods bound for the U.S., including coffee makers and the Ninja Slushie, a frozen-drink maker.”
“SharkNinja has been scouting for a place to build a factory in the U.S. that could produce goods that don’t require much labor, such as coolers and certain vacuum cleaners. Barrocas said the factory would have to be built from the ground up and goods wouldn’t start rolling off production lines until the end of 2026 at the earliest. ‘There are still a lot of questions,’ Barrocas said. ‘What happens at the end of 90 days?”
“Scott Johnson, president of Musgrave Pencil in Shelbyville, Tenn., was ready to send back an incoming shipment of Chinese-made slats—the wooden part of a pencil—when news of the trade deal broke. Even with the reprieve, Johnson said Musgrave’s total tariff cost on Chinese slats will still be close to 60 percent. Musgrave is moving much of its slat-making to Vietnam, where the rate will be just over 13 percent, and Johnson said he has no plans to turn back. ‘The ship has sailed, so to speak, on our moves to adjust our supply chain,’ he said.” READ MORE
THE 21 HATS PODCAST
I’ll Tax Your Seat: This week, we meet Ben Knepler, who, along with his True Places co-founder Nelson Warley, came up with an idea for an outdoor chair that they believe could be a game-changer. They liked the idea so much that they quit their corporate jobs, they raised money, they borrowed money—putting their own homes at risk—they fought through the pandemic, they found a manufacturer in China, they launched on Kickstarter, they found another manufacturer in Cambodia, and then they ran smack into the brick wall of President Trump’s second-term tariffs. Or, as George Harrison almost put it, “If you try to sit, I’ll tax your … sturdy, portable, folding chair that could create a whole new category of high-end outdoor products except you’ll probably have to try to sell them in some other country … ‘cause I’m the tariff man.”
Got questions for Ben Knepler? He’ll be hanging out on the 21 Hats Slack channel today and tomorrow.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
