Tariffs Harming U.S. Businesses and Consumers, Experts Say

The administration of President Donald Trump has made bringing jobs back to the U.S. a central part of its economic agenda, particularly through the implementation of tariffs on imported goods. During his second term, President Donald Trump and his cabinet have imposed tariffs on goods from over 90 countries, along with adding duties on steel, aluminum, copper, and automobiles.

While the policy's impact on the job market remains a subject of debate, entrepreneur and business owner Sarah Wells argues that policymakers need to look more closely at the effects tariffs are having on U.S. companies and consumers.

Wells, the owner of Sarah Wells Bags, a business that sells designer breast pump bags and backpacks online, shared that her company, based in Fairfax, Virginia, has had to absorb additional costs from U.S. tariffs, which is directly affecting the company's bottom line.

"We contribute to the economy, our ability to thrive and function in the economy, all of these jobs are equally important," Wells stated on Thursday during a webinar titled " The impact of tariffs on the consumer."

"I think it’s really important to look at these issues too when we’re looking at the economy, not just looking at whether or not we can get manufacturing jobs, but remembering the many millions of jobs that are behind small business and importing, supply chain, everything that goes into it, my warehouse, my carriers, my designers, everything along the line and making, again, the public very aware of that side of this coin as well."

This webinar was organized by the National Association of Importers and Exporters of the Mexican Republic. The Mexico City-based organization focuses on promoting development and strengthening bilateral relations between Mexico and its global trading partners.

Along with Wells, the webinar featured Jonathan Gold, Vice President of Supply Chain and Customs Policy at the National Retail Federation, and was moderated by Jorge Canavati, principal of J. Canavati & Co. LLC, a San Antonio-based international logistics and trade consulting firm.

Gold emphasized, "The tariffs aren’t just impacting the U.S. consumers. They’re impacting U.S. manufacturers as well, which is the other side of the coin here. Because first and foremost, you’re making it more expensive for manufacturers to produce here in the United States, because again, you’re hitting the inputs to production."

Canavati shared a recent case where he had to help a client mitigate the impact of tariffs on a shipment from a factory in China. "A customer of mine who is in Mexico, a small business, she sells on Amazon from Mexico in the U.S., and her product was caught at a port in China port … $11,000, $12,000 worth of inventory," Canavati recounted.

"The tariff was going to be almost $26,000. The customer didn’t know what to do. What we did was, when we got to the Port of Los Angeles, I told the custom house broker, cancel the entry. And we put the product into a foreign trade zone with a bonded carrier. Then we sent it to Mexico over the road, where it is now being sold slowly, a little bit more expensive, but the day was saved. But this is the kind of issue that we’re seeing every single day."

Challenges for Small Businesses Amid Tariffs

Sarah Wells Bags, founded in 2013, is a small, family-run business with a global clientele. The company's warehouse is located in Virginia. Her employees and contract workers are all Americans, but her products come from Asia.

Wells said she tried sourcing her products from factories in the U.S., but the costs were unsustainable for her business.

"As an American living and working in Fairfax, it would not only be a joy to manufacture here locally, it would be a lot easier," Wells said. "I would have a lot less supply chain to work with, I would have a lot less time, and I would have more control and have more input into the process. It is just not attainable."

Wells stated that the U.S. manufacturing sector is facing labor and production issues that make it difficult for small business owners to produce locally.

"I have been met with the same messages from the very few U.S. manufacturers in the handbag space, “there’s not enough labor,” or “we can’t take it to scale,'" she shared.

Wells also highlighted that one of the biggest obstacles to bringing more manufacturing back to the U.S. is that most of the raw materials for her backpacks come from overseas.

"This backpack alone - and we have a hundred SKUs (stock keeping units) - requires 15 different suppliers from China for every little zipper, metal piece, fabric inside and out, insulated in specialty compartments we have," Wells said. "Even if we could find someone in the U.S. to do the final labor sewing of these textile materials, everything would have to come from abroad and be subject to these tariffs, which is still costing us. So that has not been a solution for us."

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Source: Phaata.com (According to Freight Waves)

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