The owners of small businesses who sell goods made in China and Vietnam delay orders before pricing hikes which come into force on Wednesday – with much fearing that an prolonged trade war will force them to prove themselves.
The Trump administration announced Tuesday that the sample on China products would come at 104%, while Vietnam goods will be struck with an outfit of 46%. Almost 30% of clothes sold in the United States are made in China and 25% are made in Vietnam.
Day Owl, based in New York, which makes its elegant backpacks that sell for $ 155 a pop in Vietnam, could go in the belly within 30 days, said owner Ian Rosenberger.
The price of 46% would increase the duty of Black Owl to $ 2 22 and forced Rosenberger to bring its price to $ 212, he told Reuters.
Rosenberger, who launched Day Owl six years ago, interrupted all the future orders of his factories in Vietnam and has enough inventory for about a month.
Another clothing manufacturer based in New York which manufactures combinations for men, outdoor sweaters and jackets in China for American retailers fears to have to close his business in a few months if the bad blood between Beijing and Washington persists.
He expects to lose money on most of the millions of clothes that are produced in China now, including black sweaters he ordered for religious Jews in Brooklyn who should arrive on April 15.
“This is the end of my family business,” said the owner, who did not want to be identified, at the post.
Unlike large manufacturers like Nike, small businesses do not have the leverage with their foreign partners to reduce their costs.
Wild Rye, which manufactures its winter jackets and other outdoor clothes for women in China, has just implemented a job freeze and cannot offer its 11 elevation employees, Cassie Abel told Reuters.
“This will create a huge amount of pressure on the company,” she said at the point of sale, referring to the prices.
It is not only the manufacturers of clothing that prepare for financial shocks.
A roaster and an importer of the Wisconsin said that he was facing a pricing bill of $ 100,000 in a few weeks for the four grain expeditions worth around $ 800,000 which are on the way to us from the American ports of Brazil, Colombia, Guatemala and Ethiopia.
“Everything that was dispatched after April 4 will be struck by a tariff of 10% to 18%,” Tj Semanchin, president of Wonderstate Coffee in Viroqua, Wis.
His company provides cafes, grocers – including whole food – and restaurants.
“I have difficult conversations with my bank right now because my credit line is very tight,” Semanchin told post.
He estimates that the prices will cost Wonderstate $ 300,000 this year – the money he had assigned to new equipment for his growing business and for the opening of a fourth coffee.
“This is a disappointing and unexpected expenditure,” he said.
