Trump's 90-day tariff pause with China is too little, too late for some US small businesses
Small business owners told BI that a 90-day trade deal with China doesn't let them plan confidently.
Some aren't sure what taxes existing orders will face and feel like they're "gambling."
The uncertainty of the short window has caused some to pause expansion plans.
When tariffs on Chinese imports dropped from 145% to 30%, Connor Alexander hit print on a new board game that he's publishing. If he's lucky, the game will be ready to ship in 60 days and arrive in the US a couple weeks later.
By that point, tariffs could be back up.
"This pause on the tariffs doesn't really help me. In fact, it just kind of terrifies me, because we're in a situation where 90 days from now is the earliest my stuff could be hitting the port," Alexander, a 54-year old board game publisher in Seattle, Washington, told Business Insider."If that pause goes back to 145%, if it gets turned off, I'm out of business. I'm done."
Under the most recent trade agreement with China, the US lowered tariffs on Chinese goods to 30%. The agreement lasts for 90 days and it's unclear what will happen after it expires. Kush Desai, a spokesman for the White House, said in a statement that "the Trump administration is committed to restoring American Greatness with an America First economic agenda of negotiating balanced trade deals, cutting regulations, unleashing energy, and streamlining our government."
BI spoke with four small business owners about the new trade deal. They said they're glad that the tariffs were lowered, but that 90 days is not long enough to make decisions confidently — now, business feels like a guessing game.
Racing against the clock
When tariffs were at 145%, Alexander said he'd paused production on two projects for his company Coyote and Crow Games, which produces board and card games that represent the Indigenous community. He decided to green light both games when the trade deal went into effect, partly because he'd already sunk years and money into them.
Yet Alexander isn't sure that he'll be able to take advantage of the new rates, which are significantly higher than before the trade war began.
Under the fastest circumstances, 90 days may not be long enough to get his game that's currently being printed in China to the US, especially with potential shipping delays. He has no idea what taxes he'll end up paying on the game when it arrives.
Haley Pavone, the 29-year-old founder and CEO of Pashion Footwear, which makes convertible heels, called the trade deal "a mix of relief, but also frustration."
"If I could make a shoe in 10 minutes, I'd be stockpiling right now, but they take four months to make and this is only a 90 day reprieve," Pavone said. "It's not enough time to make any kind of change other than continuing to play it safe."
Her summer shoes have arrived and fall products are in production, but she said she hasn't placed her holiday order yet. Pavone said that her fall shoes should arrive in August, but she doesn't know what taxes she'll pay on them.
"It's anyone's guess," she said.
Hugo Ramirez, 42, told BI he typically buys all of his nonperishables from China for Frio Mexican Treats, an ice cream and churro shop in Appleton, Wisconsin that features flavors from his hometown of Chihuahua, Mexico.
When 145% tariffs were in effect he paused all of his orders from China and started buying from US manufacturers instead, but the materials were more expensive and not customized.
For Jessica Kim, the 34-year-old owner of Mycha LA and Chicago, a company that operates vending machines for boba and specialty teas, the 90-day window offered a brief opportunity to receive a shipment, but no chance for long-term planning. She sources all of her vending machines, non-perishables, and a few specialty tea leaves from China.
An order of 10 machines that was meant to arrive in February was delayed and was only ready to be shipped at the end of April. Kim paused the order, though, because of the 145% tariffs in place at the time. When the taxes dropped to 30%, she approved the delivery, and the machines are scheduled to arrive by mid-June.
"I was trying to time it, almost like gambling," she told BI.
'Guessing game'
Alexander told BI he's anticipating a $10 to $20 price hike on his games if tariffs stay at 30%, but he can't accurately predict costs.
"I've already had to tell my customer base, 'I don't know what I'm going to have to charge you in the long run. I'll know when that inventory gets here,'" Alexander said. "I'm taking a chance. I'm gambling on my business."
Pavone said she has no choice but to remain "as cautious and risk-averse as possible," which will likely impact her supply and pricing long-term.
"While we're trying to put that budget together, we're having to play a guessing game of what happens at the end of the 90 days," she said about her holiday order.
Pavone has also been impacted by President Donald Trump closing the de minimis loophole, which allowed shipments under $800 to avoid import taxes.
To cope, she's raised prices on her products and attached a tariff tax to US orders, so consumers can see how much more they're paying. Prices haven't changed for her international customers.
Expansions paused in their tracks
Pavone said she had planned to grow her staff — she had an offer letter out but has rescinded it.
Ramirez said he's also stopped thinking about expansion because it would mean having to buy new machines from China. So far, he said he's managed to keep prices stable on core orders, like a single scoop, but raised the cost of premium items.
He said he doesn't want to play the blame game, and is instead focused on solutions, but he's unsure of the upside of the tariffs.
"If they're going to fix the current markets and help us small businesses grow, I'm all for it," he said of the Trump team. "But as far as what I can see, this is what my experience is."
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