‘We Are Paralyzed’
With so much economic uncertainty, a family-owned, Florida-based manufacturer puts its expansion plans on hold.
Good Morning!
Here are today’s highlights:
Growing expectations of higher inflation are taking a toll on consumer confidence.
Will all of those federal layoffs affect the labor market? What about removing half a million Haitians who have been here legally?
Two shops with similar names are engaged in an increasingly bitter feud.
Gene Marks thinks it’s time to get rid of the Small Business Administration.
INTERNATIONAL TRADE
Trump’s tariffs are hitting small businesses the hardest: “American companies of all sizes are on edge over President Donald Trump’s tariffs, but it’s arguably small business that is most exposed. Many smaller firms say they’re having to hike prices, freeze expansion plans, or absorb a hit to already-thin profit margins as import bills climb. Such businesses employ half the U.S. workforce, so how they cope with Trump’s ramped-up trade war will be crucial to the wider economic impact. In Florida, Jay Foreman has already felt the bite. He’s chief executive of Basic Fun Inc!, which designs and markets toys like Care Bears and Tonka trucks — and his imports from China were spared from Trump’s first-term tariffs, which focused more on materials and machinery than consumer goods. But not this time.”
“Foreman says his prices with vendors and customers were already locked in through the third quarter when a new 10-percent China levy landed this month. For now he has no choice but to absorb the costs, which could wipe out almost one-third of this year’s profit margin. After that, if there’s no U.S.-China deal to remove tariffs, his options include pressuring suppliers to charge less, accepting smaller profits, and raising toy prices just in time for the holidays.”
“Along with inflation, another key tariff question is how business investment will be affected. The concern is that companies will be reluctant to build factories in America and add jobs — the ultimate purpose of Trump’s trade policy — until they have a clearer idea of how much they’ll have to pay to import machinery, parts, or materials. That’s an issue for corporate giants — General Motors won’t ‘spend a large amount of capital without clarity,’ Chief Executive Mary Barra has said — and, at the other end of the scale, for Todd Adams at Sanitube too.”
“The family-owned, Florida-based firm makes stainless steel tubing, valves, and fittings for food manufacturers. It sources materials from a range of countries, and employs some 20 people. Sanitube has put expansion plans on hold, Adams says, because there’s no telling how much his bills will increase as a result of tariffs — and he needs to conserve cash just in case. He’s already on the hook for the 10-percent China duty, and may well be exposed to two separate tariffs due to take effect early March, on metals and Canadian goods.”
“‘We are paralyzed as a company,’ he says. ‘Until we have an idea of what tomorrow, next month, or this year holds, we’re just sort of in a holding pattern.’” READ MORE
