Latest news with #KellyLoeffler
Time of India
5 days ago
- Business
- Time of India
Trump says retailers should 'eat the tariffs.' Good luck with that.
COMPANIES CAN'T DENY REALITY. Maybe I've misunderstood how retail businesses are supposed to operate, but I was always led to believe that the cost of goods should not exceed actual revenues. Yet that fundamental principle is essentially what President Trump is ordering retailers such as Walmart to abandon as they grapple with the 30 percent tariff on goods from China, as well as various duties on items from Vietnam, Canada, Mexico and other major sources of products for the U.S. market. Walmart should "eat the tariffs," the president demanded recently on Truth Social, his social media site. Then we have the head of the Small Business Administration, Kelly Loeffler, who on a visit to a factory in Georgia pronounced that "the top concern is not tariffs," implying that a 30 percent tariff will free it from evil Chinese communist suppliers. The chief executive of the company wasn't quite buying it: "Manufacturing is a global supply chain," she noted. One that is now more costly. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Killer New Toyota 4Runner Is Utter Perfection (Take A Look) MorninJoy Undo Walmart seemed to have offended Mr. Trump by announcing that it would have to raise some prices given the chaos he has caused. But it's only fair that a company would warn its customers of price increases and explain the reasons for them. And in the end Walmart, like other resellers, will indeed eat some of those tariffs: According to UBS Global Wealth Management, a 10 percent tariff translates to a 4 percent price increase at retail. For Walmart, which sources many of its goods from Asia and particularly China, there isn't much wiggle room given how the company operates. From the beginning, it has won customers and generated profits by keeping costs at a minimum -- including labor and overhead -- and by squeezing vendors. Any ripple in that equation and the business model doesn't work for the company. Live Events A 30 percent tariff isn't a ripple; it's a wave. So Walmart has warned it may raise prices, as has another big retailer, Target. Which of course doesn't play in the White House. Mr. Trump loves to remind us what a great business mogul he is. If that's true, he should understand what happens when expenses exceed revenue, which happened in several of his casinos. (In total, he's filed six bankruptcies for his businesses.) Yet his demand is that big retailers can, or should, absorb enormous cost increases by dialing back in other areas or changing their sourcing. One of these retailers, Home Depot, has said it will do something like that. The company's founders include prominent Trump backers, so you can view the move as partly political. But it's difficult to see how its earnings won't fall. For one thing, home building is stalling, in part because homebuilders and consumers are freaked out about the future. In addition, contractors who do go to Home Depot for supplies might find some products missing, because the company has said it might not stock heavily tariffed products. Consider that upward of 70 percent of imported softwood products come from Canada -- and the United States has threatened to raise the country's current 14.54 percent tariff. For landscapers, some 80 percent of imported potash, which is used in fertilizer, is produced in Canada. Tariffs on aluminum and steel products sit at 25 percent. Home Depot's supply chain reveals how convoluted the question of national interest can be. That Cub Cadet riding lawn mower, which is made in the United States? Some of its parts are imported. Ryobi mowers, which are made in America, could gain more store space -- but Ryobi is a Japanese company (though its U.S. power tool and mower business is owned by Techtronic Industries of Hong Kong). Big companies and their allies seem to be afraid to call tariffs and the resulting price increases what they are: a tax on imported goods, paid by the importer. Denise Dahlhoff, the director of marketing and communications research for the Conference Board, a business group, recently recommended that executives should avoid the word "tariff" and use more "neutral terms," such as "sourcing cost" or "supply chain cost." Think again, Ms. Dahlhoff. Most grown-ups can handle the word "tariff." The avoidance approach assumes that consumers are idiots who can't figure out that they are paying a tax. Wordplay is a wrongheaded strategy, though it jibes with the general obeisance that big businesses have been paying to Mr. Trump -- a tactic that has yielded them nothing. Small and medium-size businesses, on the other hand, live in the real world -- some have even sued Mr. Trump over tariffs -- and have no choice but to pass on the Trump tax to customers. They are making this pretty clear by adding surcharges to goods and services and informing their customers of the source. One example: A Danish furniture store in Westchester County, N.Y., recently posted signs explaining that its imported designs would be subject to a price increase of up to 10 percent as a result of the tariffs. Then again, the Danes don't have to deal with Mr. Trump. (Oh, wait: Greenland.) In one of the tales in Jonathan Swift's "Gulliver's Travels," we encounter the Houyhnhnms, a race of talking horses that are incapable of lying and don't understand why humans need to say "the thing which is not." In today's irrational America, companies are afraid to say the thing which is, for fear of enraging the thing that is making their businesses more unpredictable and less profitable. Swift was writing satire. Business leaders who deny the realities of the tariffs are engaging in self-satire. And it will be self-defeating.
New York Times
5 days ago
- Business
- New York Times
Trump Says Retailers Should ‘Eat the Tariffs.' Good Luck With That.
Maybe I've misunderstood how retail businesses are supposed to operate, but I was always led to believe that the cost of goods should not exceed actual revenues. Yet that fundamental principle is essentially what President Trump is ordering retailers such as Walmart to abandon as they grapple with the 30 percent tariff on goods from China, as well as various duties on items from Vietnam, Canada, Mexico and other major sources of products for the U.S. market. Walmart should 'eat the tariffs,' the president demanded recently on Truth Social, his social media site. Then we have the head of the Small Business Administration, Kelly Loeffler, who on a visit to a factory in Georgia pronounced that 'the top concern is not tariffs,' implying that a 30 percent tariff will free it from evil Chinese communist suppliers. The chief executive of the company wasn't quite buying it: 'Manufacturing is a global supply chain,' she noted. One that is now more costly. Walmart seemed to have offended Mr. Trump by announcing that it would have to raise some prices given the chaos he has caused. But it's only fair that a company would warn its customers of price increases and explain the reasons for them. And in the end Walmart, like other resellers, will indeed eat some of those tariffs: According to UBS Global Wealth Management, a 10 percent tariff translates to a 4 percent price increase at retail. For Walmart, which sources many of its goods from Asia and particularly China, there isn't much wiggle room given how the company operates. From the beginning, it has won customers and generated profits by keeping costs at a minimum — including labor and overhead — and by squeezing vendors. Any ripple in that equation and the business model doesn't work for the company. A 30 percent tariff isn't a ripple; it's a wave. So Walmart has warned it may raise prices, as has another big retailer, Target. Which of course doesn't play in the White House. Mr. Trump loves to remind us what a great business mogul he is. If that's true, he should understand what happens when expenses exceed revenue, which happened in several of his casinos. (In total, he's filed six bankruptcies for his businesses.) Yet his demand is that big retailers can, or should, absorb enormous cost increases by dialing back in other areas or changing their sourcing. One of these retailers, Home Depot, has said it will do something like that. The company's founders include prominent Trump backers, so you can view the move as partly political. But it's difficult to see how its earnings won't fall. For one thing, home building is stalling, in part because homebuilders and consumers are freaked out about the future. In addition, contractors who do go to Home Depot for supplies might find some products missing, because the company has said it might not stock heavily tariffed products. Consider that upward of 70 percent of imported softwood products come from Canada — and the United States has threatened to raise the country's current 14.54 percent tariff. For landscapers, some 80 percent of imported potash, which is used in fertilizer, is produced in Canada. Tariffs on aluminum and steel products sit at 25 percent. Home Depot's supply chain reveals how convoluted the question of national interest can be. That Cub Cadet riding lawn mower, which is made in the United States? Some of its parts are imported. Ryobi mowers, which are made in America, could gain more store space — but Ryobi is a Japanese company (though its U.S. power tool and mower business is owned by Techtronic Industries of Hong Kong). Big companies and their allies seem to be afraid to call tariffs and the resulting price increases what they are: a tax on imported goods, paid by the importer. Denise Dahlhoff, the director of marketing and communications research for the Conference Board, a business group, recently recommended that executives should avoid the word 'tariff' and use more 'neutral terms,' such as 'sourcing cost' or 'supply chain cost.' Think again, Ms. Dahlhoff. Most grown-ups can handle the word 'tariff.' The avoidance approach assumes that consumers are idiots who can't figure out that they are paying a tax. Wordplay is a wrongheaded strategy, though it jibes with the general obeisance that big businesses have been paying to Mr. Trump — a tactic that has yielded them nothing. Small and medium-size businesses, on the other hand, live in the real world — some have even sued Mr. Trump over tariffs — and have no choice but to pass on the Trump tax to customers. They are making this pretty clear by adding surcharges to goods and services and informing their customers of the source. One example: A Danish furniture store in Westchester County, N.Y., recently posted signs explaining that its imported designs would be subject to a price increase of up to 10 percent as a result of the tariffs. Then again, the Danes don't have to deal with Mr. Trump. (Oh, wait: Greenland.) In one of the tales in Jonathan Swift's 'Gulliver's Travels,' we encounter the Houyhnhnms, a race of talking horses that are incapable of lying and don't understand why humans need to say 'the thing which is not.' In today's irrational America, companies are afraid to say the thing which is, for fear of enraging the thing that is making their businesses more unpredictable and less profitable. Swift was writing satire. Business leaders who deny the realities of the tariffs are engaging in self-satire. And it will be self-defeating.
Business Mayor
24-05-2025
- Business
- Business Mayor
Small Business Administration boosts manufacturing funding efforts
Dive Brief: The U.S. Small Business Administration is increasing funding opportunities to help small- and mid-sized manufacturers build, expand or enhance their operations. As part of its Made in America Manufacturing Initiative, the agency said it will provide three eligible applicants with up to $1.1 million total to deliver training and assistance to support small businesses in its Empower to Grow Program. Building on the initiative, legislation was recently introduced in both the House and Senate that would double the limits of 7(a) small business loans from $5 million to $10 million if approved by Congress. Dive Insight: President Donald Trump has made manufacturing a key pillar of his second term, with the SBA pledging to cut $100 billion in regulatory burdens and costs for small manufacturers as part of its Made in America initiative launched in March. The agency also said it would look to expand financing options and make it easier for people to qualify for small business loans. As part of its effort, the SBA announced a funding opportunity for organizations looking to help small manufacturers by offering free business courses, hands-on training and consulting to support growth in their operations and hiring. The SBA is looking to award up to $1.1 million to three applicants. Participants must be a for-profit or not-for-profit entity, including trade or professional associations and educational institutions. The deadline to submit proposals is May 12. 'With this new grant, the agency will accelerate the return of American supply chains, production power, and economic independence,' SBA Administrator Kelly Loeffler said in a statement. SBA 7(a) loan approvals skyrocketed 74% in the first 100 days of Trump's second term compared to the same period during former president Joe Biden's administration. The 7(a) program is a public-private partnership that offers guaranteed loans to help small businesses finance equipment purchases, acquisitions and working capital. In an effort to open up more funding to small businesses, Iowa Senator Joni Ernst and Texas Congressman Roger Williams introduced federal legislation that would increase the individual loan limits for 7(a) and 504 programs to $10 million. Similar proposals advocating for increased loan limits have failed over the years. So far this latest piece of legislation has received bipartisan support, including praise from the U.S. Chamber of Commerce. 'Doubling the U.S. Small Business Administration's (SBA) loan limit will free up capital small business owners use to increase employees' paychecks, broaden benefits, and expand operations,' Rodney Davis, head of government affairs at the Chamber of Commerce, said in a statement.
New York Times
23-05-2025
- Business
- New York Times
Under Trump, a Mainstay for Small Businesses Clamps Down
For entrepreneurs who want a loan, a government contract or just some advice, the Small Business Administration is generally a first stop. But over the past few months, getting the agency's help has become more difficult. Under its administrator, Kelly Loeffler, a corporate executive turned senator from Georgia and vocal supporter of President Trump, the agency has aggressively cut staff. It is rolling back changes made during the Biden administration aimed at easing access to credit for the smallest enterprises, and has lowered targets for how much the federal government should buy from them. The changes are especially problematic for Black, Hispanic and immigrant entrepreneurs. In the name of eradicating diversity, equity and inclusion practices, the Small Business Administration is shedding programs aimed at helping disadvantaged businesses, including those run by women. While banks that administer the S.B.A.'s major loan programs have welcomed some of the changes, Democrats and small-business advocates have decried them — especially as the agency is also supposed to inherit a $1.66 trillion student loan portfolio from the largely dismantled Education Department. 'It's unconscionable that the Trump administration would treat such a vital agency so callously,' said Senator Edward J. Markey of Massachusetts, the ranking Democrat on the Senate Committee on Small Business and Entrepreneurship. He noted that Ms. Loeffler had ignored his requests for information about the changes. 'They're destroying the areas where they do have expertise and it's vital to invest, and then moving over areas where the agency is going to wind up overwhelmed,' Mr. Markey said. Senator Joni Ernst of Iowa, the committee's Republican chair, did not respond to requests for comment. But she has cheered the new policies in letters and hearings, saying that the agency's staff was bloated and that its underwriting standards were too lax. The Small Business Administration, established in 1953, has long been supported by both parties. Its lending arm dispensed $56 billion in 2024, and its flagship loan program is generally supposed to operate without a government subsidy. The last few years have been chaotic for the agency. Its responsibilities expanded drastically during the pandemic, when it received more than $1 trillion to distribute through emergency relief programs. Staffing temporarily doubled to nearly 10,000 employees in order to administer them. The number of workers fell to about 6,000 by the time President Joseph R. Biden Jr. left office, and was slated to gradually contract a bit more as the pandemic loan portfolio shrank. The Trump administration decided to fast-forward that culling. In March, it announced a 43 percent staffing reduction, amounting to 2,700 employees. Current and former employees say the cuts have not been carried out in an organized way. Probationary members of the staff were the first to be let go, followed by those who took advantage of the Department of Government Efficiency's deferred resignation program. After that, workers were fired. As a result, many district offices have been hollowed out, slowing response times. An agency spokeswoman, Caitlin O'Dea, did not elaborate on the distribution of the cuts, but wrote in a response to questions that the reorganization would 'redirect all resources to support the core mission of empowering small businesses and driving economic growth, instead of supporting the partisan programs that took root under the Biden administration.' During a Senate hearing on Wednesday with Ms. Loeffler, Senator Jeanne Shaheen, Democrat of New Hampshire, said her state's district office had been cut to three employees from seven, and she asked whether the positions would be restored. Ms. Loeffler replied that she would rehire some of those workers who had retired, but did not provide a timeline. One corner of the agency that has been hobbled is the servicing of Covid-era disaster loans. The agency kept the loan operation in-house when it began in 2020, requiring hundreds of agents to handle payments and other issues. As those employees started being pushed out or leaving of their own accord, live assistance on the program's phone line was shut down. According to Ms. O'Dea, this was a four-day outage while call center infrastructure was upgraded, yet reports of unanswered calls predate that period. Shelly Haywood took out a disaster loan to keep her vintage furniture store in Orange County, Calif., afloat during the pandemic. Business never quite recovered, and in March she decided to shutter her company. To do that, she needed to talk to the S.B.A. to figure out what to do with her loan, which still carried a balance of $57,000. 'I'm calling and calling, but the phone number no longer gave you an option to talk to someone,' Ms. Haywood said. With nobody available to provide guidance, she is forced to consider closing her business while the agency still has a lien on her remaining inventory. The loan may then be referred to the Treasury Department's collections office, which could garnish her Social Security payments or tax refunds. 'Every company has to cut. I'm OK with all of that,' Ms. Haywood said. 'But if you're going to do cuts, don't just leave everybody hanging.' Staff cuts may also affect the agency's ability to police fraud in the disaster loan program, which has been plagued with abuse. In March, Ms. Loeffler fired the agency's chief risk officer and his 11-person team, saying the function would be 'elevated' under the chief financial officer. As the agency loses workers, it's also tightening requirements for those disaster loans, which were underwritten with little proof that the business would be able to repay. Previously, borrowers had been able to get a series of hardship accommodations that enabled them to make only minimum interest payments. That allowance was terminated in March. Jason Milleisen, a consultant who advises S.B.A. borrowers on how to navigate loan settlements, said many of his clients were now more likely to just default. 'So many people call me, they want to pay, they don't want to walk away, but the S.B.A. gives them no choice,' Mr. Milleisen said. 'People are in an impossible position here, which is why there's so much discussion around bankruptcy.' Ms. Loeffler, while working to expand lending for manufacturers, is returning to stricter standards for the agency's flagship program for loans of up to $5 million, known as 7(a). The Biden administration loosened credit requirements, granted lending licenses to more types of companies beyond traditional banks and waived fees in order to ease access to credit. As a result, the number of smaller loans to firms owned by women and people of color rose significantly. Ms. Loeffler reversed course in April, saying the new rules had caused an increase in defaults, dragging the program into a deficit. Katie Frost, who ran those programs for the Biden administration until January, argued that rising interest rates, not weaker underwriting standards, had driven higher defaults. (An independent analysis by Lumos Data found that both factors were at play.) 'I think it's just going to tighten up the ability of small businesses to get credit,' Ms. Frost said. 'The vast majority of borrowers are in fact able to make these loan payments. The whole point of the program is to encourage lenders to accept a little more risk than they would conventionally.' Lenders' views on the reversal vary, but larger banks tended to favor going back to the earlier rules. 'I think in the end it's going to be better,' said Tonya Mazurek, who runs S.B.A. lending in Colorado for Midwest Regional Bank. About loans, she added, 'The ones that are harder that aren't going through probably shouldn't have.' While those changes affect all borrowers, many of Ms. Loeffler's efforts are aimed at specific groups like immigrants. In March, she announced that the agency was relocating six district offices in 'sanctuary cities,' which are jurisdictions that limit cooperation with federal immigration officials. New York City was one of them. Marlene Cintron, who oversaw the New York region for the S.B.A. during the Biden administration, said her New York City operation — which facilitated a billion dollars in loans annually — had lost half its staff. The downtown Manhattan office is set to be consolidated into one on Long Island, she said. 'Small-business owners in New York City are expected to take the Long Island Rail Road or drive or take buses to Long Island in order to be serviced,' Ms. Cintron said. 'That is a major adverse impact.' Ms. O'Dea said that none of the six offices had yet closed and that their replacements had not been announced, but that they would be in 'safer and more accessible communities that comply with federal immigration law.' The agency also announced that all borrowers must now provide proof of their citizenship status. For some programs, 100 percent of the company must be owned by citizens or legal permanent residents. As a result, anyone who has an investor without a Social Security number does not qualify. That change has upended an S.B.A. loan for Haley Pavone, who founded and runs a footwear company called Pashion. She spent years preparing her business to qualify for a 7(a) loan, which carries a significantly lower interest rate than many private options. She was close to signing final documents for a $5 million loan when the agency announced an immediate change to its citizenship requirements. Ms. Pavone scrambled to ask her investors for personal information, including Social Security cards and driver's licenses. She soon learned that less than 2 percent of Pashion's equity was owned by Mexican nationals. The loan fell through, and she has been forced to pivot while facing new tariffs on her products, which are imported from China. 'I'm hoping we can find a capital partner, but frankly my level of optimism given the general level of chaos in the space right now is not high,' said Ms. Pavone, who was born and raised in California. 'It doesn't make any sense.' Ms. Loeffler has also focused on erasing programs that devote special attention to women or people of color, pursuant to a presidential executive order on diversity, equity and inclusion. For example, the Biden administration had started an initiative in California called the Inclusivity Project, teaming up with Wells Fargo to educate and mentor Black-owned businesses. Jay King, the chief executive of the California Black Chamber of Commerce, said the program was helping his members — and other businesses of all races — become good candidates for loans. A couple of months ago, the local Small Business Development Center told him that the Inclusivity Project was shutting down. Mr. King was disappointed, but not surprised. 'Donald Trump is trying to say, 'We're trying to make everybody equal — everybody's the same,'' Mr. King said. 'But we're not. It's never been equal.' The anti-D.E.I. drive also appears likely to claim the agency's approximately 150 women's business centers, which were established by statute in 1988 and offer one-on-one counseling to female entrepreneurs. The White House's proposed budget, which calls for reducing the S.B.A.'s annual funding by a third, would eliminate those centers, along with some 28 offices devoted to serving veterans. The women's business centers operate on budgets of $150,000 a year each, and are usually housed within nonprofits. Funding installments have already been coming late, and some center directors have been told that they should expect to receive no more checks after the fiscal year ends this October. Asked why the centers are being eliminated, Ms. O'Dea said that the agency was 'evaluating the performance and efficacy of each of its taxpayer-subsidized resource partners to ensure they are delivering measurable results for small business owners and taxpayers,' but that it 'fully supports the White House's budget.' While the Small Business Administration is withdrawing loans and grants, it's also easing up on efforts to channel federal procurement toward small businesses, especially those in historically disadvantaged categories. The Biden administration had raised the share of federal spending to those businesses to 15 percent. That goal was supported by offices across agencies devoted to purchasing from small enterprises. Mr. Trump lowered it back down to the statutory floor of 5 percent, and many of those offices have been cut back. At the same time, the number of small-business contracts being terminated has skyrocketed, according to a Bloomberg analysis. Aditi Dussault developed the agency's equity plan, where she served as associate administrator of the Office of Entrepreneurial Development in the Biden administration. She said abandoning higher contracting goals and pulling back technical assistance for those who needed it most was already deterring small enterprises from going after federal business. 'You have all these different supports for small businesses to guide them along the pathway to economic opportunity,' Ms. Dussault said. 'And we are seeing that be eliminated before our very eyes.'
Yahoo
22-05-2025
- Business
- Yahoo
Idaho lawmakers urge feds to move Small Business office from Seattle to their state
People walk past the headquarters of the U.S. Small Business Administration on March 24, 2025 in Washington, D.C. (Photo by) All four Idaho Republican congressmen want the U.S. Small Business Administration, or SBA, to move its Pacific Northwest regional office from Seattle to Idaho. In March, SBA Administrator Kelly Loeffler announced plans to relocate six of the agency's regional offices based in cities 'that do not comply with U.S. Immigration and Customs Enforcement.' The SBA's Region 10 Office, based in Seattle, covers four states: Idaho, Washington, Oregon and Alaska. In a joint letter, U.S. Sens. Jim Risch and Mike Crapo, and U.S. Reps. Mike Simpson and Russ Fulcher wrote, 'unlike other states served by the Seattle Office, Idaho has demonstrated a strong commitment to putting American citizens first. Our state has enacted a statewide ban on sanctuary cities, and the Idaho Congressional Delegation has repeatedly worked to prevent illegal immigrants and sanctuary cities from abusing federal funding.' The SBA is a federal government agency that helps small businesses get loans. 'By relocating the regional office to Idaho, the SBA would ensure its services align with President Trump's priorities, directly benefitting law-abiding business owners,' the Idaho congressmen continued. The SBA has district offices across the U.S. Idaho's counties are split between being managed by the Boise District and the Seattle District. idaho SBA letter A copy of the letter that the four Idaho congressional lawmakers sent to Small Business Administration lead Kelly Loeffler. This article was first published by the Idaho Capital Sun, part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Idaho Capital Sun maintains editorial independence. Contact Editor Christina Lords for questions: info@
