LOS ANGELES 鈥 Some US businesses are activating plans to protect their businesses from President-elect promise to slap new and potentially hefty tariffs on a wide swath of goods from countries including China and Mexico 鈥 the top US trading partners.
Mr. Trump proposed a 10% tariff on all US imports and a 60% levy on Chinese-made products, which if enacted would affect the entire economy by pushing consumer prices higher and stoking retaliatory levies on American exports. Trump also threatened to impose a 25% tariff on all imports from Mexico.
Economists warn that Mr. Trump鈥檚 tariff plans, likely his most consequential economic policy, would push US import duty rates back up to 1930s-era levels, stoke inflation, collapse US-China trade, draw retaliation and drastically reorder supply chains.
Hong Kong-based M.A.D. Furniture Design will ramp up by 50% shipments of its Chinese-made, modern-style chairs, tables and lighting to its Minneapolis warehouse 鈥渢o buy ourselves some time to react after the election,鈥 co-founder Matt Cole said.
In Chicago, Joe & Bella co-founder Jimmy Zollo already has quadrupled orders for the online retailer鈥檚 best-selling Chinese-made shirts and doubled orders for its most popular pants for adults who have trouble dressing themselves due to arthritis, dementia or being in a wheelchair.
鈥淕iven the uncertainty around tariffs, we wanted it delivered before Chinese New Year鈥 on Jan. 29, Mr. Zollo said of that merchandise.
That鈥檚 because Chinese factories close for two to four weeks to give workers a chance to travel home for New Year festivities with their families. When work resumes, orders from small businesses like Mr. Zollo鈥檚 often get pushed to the back of the line, he said.
During his 2017-2021 presidency, Mr. Trump imposed waves of tariffs on products like steel, washing machines, solar panels and consumer goods from China. US importers responded by rushing in goods ahead of those tariffs.
This time, Mr. Trump鈥檚 new proposal affects far more goods and US seaports could get swamped if US businesses repeat the early import strategy known as front-loading.
That protective measure requires substantial resources to cover the cost of goods and extended storage, business owners told Reuters.
As a result, some small business owners are opting out.
鈥淲e are not ordering goods early given the overhead of storage, expedited shipping, and other associated costs,鈥 said Hilla Hascalovici, chief executive officer of New York-based Periodally, which sells Chinese-made heating patches for menstrual cramps that employers stock in bathrooms next to the pads and tampons.
Campaign promises can diverge from the policies enacted once a president takes office, said Max Lemper-Tabatsky, co-founder of Denver-based Oaktree Memorials, which sells cremation urns made in Asia and Europe.
鈥淩ather than committing substantial capital upfront based on hypothetical tariff scenarios, we are opting for a wait-and-see approach,鈥 he said.
Alan Baer, president of OL USA, which handles freight shipments for clients, expects that Mr. Trump will follow through on at least part of his plan.
鈥淭ariffs in shipping are bad no matter how you look at it,鈥 said Mr. Baer, who added that Mr. Trump鈥檚 win likely means his firm could 鈥渉ave less stuff to move and need less people.鈥 鈥 Reuters
