The small US businesses with deep links with China are struggling to remain in the sale by selling inventory and reducing jobs as the commercial war between the two largest economies in the world increases, as learned.
The Trump administration increased tariffs on goods from China to 145% last week, a measure that pushed Beijing to increase taxes on US imports to 125%.
While large companies trapped in crossfire have begun the process of manufacturing China, the fate of smaller American jobs has become terrible that is tied to the continent, according to several business leaders.
“In two months, I am likely to close and sell my inventory if nothing changes,” said Sari Wiaz, owner or baby paper based in Illinois, which makes his popular sensory toys in China.
His 11 -year -old company would need to increase the additional $ 20,000 to cover tariff costs for the rest of the year, including the holiday season, he explained.
“That is not feasible to us,” said Wiaz.
Katrina Marshall, president of artistic toys and promotions, said her company is in the same rapid spring boat.
Marshall was forced to falsify an upcoming shipment in May because the company, which makes promotional luxury toys and handle manufacturing for other toy companies, including babies paper, face a tariff bill of $ 403000.
On Friday, he brought together his staff of 20 people to inform them about employment cuts that are scheduled to advertise on Monday.
“We don’t know where this will end,” said Marshall, referring to the commercial war between Washington and Beijing.
He added that moving to production to another country, an option that has previously explored, would take approximately one year.
In general, the US toy industry depends on China for 80% of its production.
“There will be a migration outside China, but I don’t know that any other country will replace China in terms of their workers’ experience and prices,” said Marshall.
Only companies that have tariff leg preparation, including the RH luxury furniture manufacturer and the iconic wedding manufacturer David’s Bridal, recognize that changing production companies simply do not have.
“It’s not that we turn the switch during the night,” said Kelly Cook, executive director of the largest wedding dresses company in the United States.
David’s Bridal has manufacturing facilities in at least five countries, including China, Myanmar, Vietnam, Sri Lanka and India.
The company based in CONHOHOCKEN, Pennsylvania, has a 50% participation in a joint company that owns and operates its factories, said Kelly.
“Our strategy at this time is that we are making a change outside of China and we will have to get the production of our Locations from China,” Kelly said.
She refused to say where she is investing more resources.
“We are going to cover and be very flexible and agile,” Kelly said. “We have very deep and rigorous processes where we can train talented people by location in up to 60 days.”
The 75 -year -old company, which requested bankruptcy protection twice, more recently in 2023 is among the minority of clothing companies that can give up China.
“The clothes are complicated,” said Craig Johnson, president of Customer Growth Partners. “Most of the world’s great sewers are Chinese living in China. Most clothing companies have tried to pivot, but the question is who has had a material pivot.”
Companies were in good notification about a possible commercial war with China almost a decade ago, when saber sport on tariffs begged in the first mandate of President Trump.
China represented up to 44% of US imports of clothing and accessories in 2018, but were reduced to 35% in 2022, according to the global S&P report.
The domestic furniture is another industry highly dependent on China, with approximately 50% of the furniture imported to the US. They come from the country.
RH’s executive president, Gary Friedman, who undead “OH SH-T” in a gain call with analysts while the actions looted 40% after Trump his announcement as a “day of release” on April 2 said that his company plans to reduce his overfishing.
RH had “successful resources most of its production from China to Vietnam,” RH revealed in a statement last week, adding that “a significant amount” or its Chinese production had moved from the factory in North Carolina.
“This movement is quite impressive,” Friedman said last week. “It’s going to force everyone to play a different game.”
Five discount retailer also joined China’s exodus, asking vendors to stop the shipping products that are directed to the United States, Bloomberg reported Friday.
The tariffs were expected to almost double the cost of five below, compared to up to 50% based on Trump’s initial rates in China on April 2, according to Oppenheimer’s analyst Brian Nagel, who was summoned by the departure.
