Trump S 145% China tariffs endanger US small companies massively

Trump S 145% China tariffs endanger US small companies massively

in 2017 Christina and Ian Lacey decided to take a risk and leave their safe careers behind to transform their hobby into a small company. The courage and hard work paid off. The couple from Denver founded Retuned Jewelry from home and recorded impressive sales- an average of $ 360,000 a year, mostly by participating in music and art festivals.

handmade jewelry made of recycled materials

Christina, a former dental assistant, and Ian, who previously worked in information technology, produced earrings, necklaces and bracelets from donated guitar and bass strings. "We worked on it 24/7," said Christina. "This is our baby. We gave everything to keep it alive."

The effects of tariffs on small companies

But all the hard work could be endangered due to the 145%tariff by President Donald Trump on Chinese imports, which made almost $ 440 billion in the USA in 2024. According to John Arensmeyer, founder and CEO, the Small Business Majority, an association that represents a network of 85,000 small companies, smaller companies such as Retuned Jewelry are particularly affected.

He explained that small companies were forced to increase prices, reduce personnel, to delay growth plans or, in the worst case, to close completely, only to keep up with the increasing import costs that they cannot obtain in Germany.

The challenges in material procurement

While the laceys are dependent on free strings that would otherwise land on landfills, the other materials they need come from China. Ian explained that they tried to obtain materials in Germany, but these products are simply not produced in the USA. "We were looking for," he said. "There is no company here that can make what we need." The Laceys have already increased the prices of their products in the run -up to the tariffs.

the financial burden of tariffs

Arensmeyer pointed out that small companies usually have no reserves to survive unexpected price increases. He described the tariffs as a crisis for small companies in which they do not have much control.

For the Mitchell Group, a family -run second generation textile company based in Niles, Illinois, the lack of financial reserves could have serious consequences during production difficulties or other problems. "Because of our business model, the tariffs have exerted considerable pressure on our cash flow," said Ann Brunett, the company's managing director. "We normally hold in stock. Therefore, I pay 45% inch - plus taxes - to bring in products that may be unclear on a shelf until the need for our dealers."

The search for alternatives in production

The Mitchell Group employs 18 full-time employees and 12 sales representatives and, according to President Bill Fisch, generates annual turnover of almost $ 10 million. Brunett emphasized that the company will "do everything" to avoid closure. "The business means everything to us," she said, emphasizing that you want to avoid dismissals. Fisch has checked Vietnam, India, Malaysia and even Europe as an alternative production. "Nobody has the infrastructure that China has," he said. "We need our coated fabrics under one roof and produced according to our strict standards. You cannot make part in Vietnam, another in India and put together in Thailand. It doesn't work that way."

The future of textile production in the USA

Although Trump is praising tariffs to promote domestic production, Arensmeyer explained that a revival of US production could take a long time. "You can't solve that overnight," he said. "You can't just say: 'Oh, we will raise a customs, and now people will buy in Germany' if we have not made these products in Germany."

The textile and clothing industry has shrunk continuously in the United States in the past decades, mainly due to the increase in cheaper production options abroad and globalization, according to Sheng LU, professor at the University of Delaware. Fish pointed out that key materials that Mitchell Group uses, such as special vinyl polymer and textiles, are almost non -existent in the USA. China is the largest textile producer in the world and produces everything from cotton and silk to synthetic fibers and vinyl polymers.

he added that he could not find enough workers to operate a fabric factory in Mississippi. "The textile industry for our kind of products? It has disappeared here," said Fisch.