Latest news with #Lalo
Nikkei Asia
7 days ago
- Business
- Nikkei Asia
China tariffs will push up US prices in coming weeks, manufacturers warn
HONG KONG -- With U.S. President Donald Trump's latest China tariffs now set at 30%, more American businesses with manufacturing operations on the mainland are warning they will be forced to raise prices in the coming weeks as inventories dwindle and shipping costs surge. Michael Wieder, co-founder and president of Lalo, a maker of baby products such as highchairs and play kits for retailers including Target and said he kept prices steady after Trump kicked off the latest round of trade tensions, but was facing pressure to switch gears.
Yahoo
25-05-2025
- Business
- Yahoo
The Era of Thrash
'It almost feels like we're trying to rebuild everything from scratch,' Michael Wieder told me. The company he co-founded, Lalo, sells sleekly designed baby gear, much of it made in China. In his first weeks in office, Donald Trump increased the tariff rate on most of the company's imported goods by 20 percentage points. In April, he jacked the rate up to 145 percent. Lalo had to stop bringing in products from overseas: Paying the tariff could have bankrupted the company. Trump dropped the rate down to 30 percent this month, but Wieder anticipates falling sales and a year of disruption. Ask any corporate executive or entrepreneur about the past five months, and they will tell you a story like Wieder's. Companies are struggling with unstable tariff rates, bond-market swings, canceled federal contracts, rising import costs, and visa challenges. They're unsure about the economic outlook. They're unsure about tax rates. They're unsure about borrowing costs. Last week, Moody's downgraded American debt, meaning it has less confidence in the country's growth and capacity to manage its deficits. This is a year of chaos, so dramatic in its upheaval that it sometimes obscures how weird things have been, and for how long. Over the past half decade, businesses have contended with a pandemic, a recession, an inflationary spiral, and a trade war. They have negotiated swift changes in consumer behavior and input prices and interest rates, as well as significant shifts in policy more broadly, from Joe Biden's New Deal Lite to Donald Trump's autarkic austerity. John Lettieri, the president of the Economic Innovation Group, a Washington-based think tank, calls it 'the era of thrash.' The American economy has weathered that chaos. Despite reams of studies indicating that uncertainty dampens investment and slows growth, today corporate profits are high, the jobless rate is low, productivity has climbed, and new businesses are blossoming. But that resilience may be wearing off, and we may have reached the end of our ability to withstand the disruptions. Is this spell of uncertainty so unusual? Even after talking with a dozen business owners and experts in recent weeks, I came away unsure. A lot seemed to have happened since COVID. Then again, reciting five years of major events might feel like singing the lyrics to 'We Didn't Start the Fire' regardless of which five years you picked. As it turns out, economists have ways of measuring uncertainty, by looking at newspaper coverage, stock-market gyrations, and corporate communications. Those measures show that, sure enough, the first half of the 2020s has proved remarkably unstable and destabilizing. 'We've been through a period of elevated uncertainty,' Steven Davis, of the Stanford Institute for Economic Policy Research, told me. Right now, we are in 'a big surge, relative to what was already a higher-than-average base.' Economists also have ways of measuring the impact of such periods on businesses and the economy writ large. Uncertainty about a country's growth path reduces consumption and investment, depressing industrial production. Uncertainty about inflation reduces bank lending, cutting down on business expansion and formation. Uncertainty about tariffs weakens supply chains and limits the number of businesses joining a market. The economies of countries with stable policy environments tend to grow faster than those of unstable countries. Given that research, you'd think that the past five years would have been dull ones for entrepreneurship and growth. The opposite is true. Americans are forming roughly a million more businesses a year now than they were before the pandemic, despite higher borrowing costs. Corporate profits are fatter than they were before the pandemic. Stock prices—a measure of investor optimism about future earnings—have been volatile, but are up 96 percent over the past five years. 'My biggest takeaway from the last five years of a one-after-another series of different kinds of shocks and uncertainties is an appreciation for the astonishing resilience of the U.S. economy,' Lettieri told me, a note of awe in his voice. Business experts pointed to a few reasons that the chaos leading up to 2025 did not strangle investment or damage growth. For some firms, the coronavirus crisis provided an opportunity by disrupting stodgy markets and upending consumer behavior. Lalo, for instance, benefited from the surge in interest in ordering online, which let it compete with big-box stores that otherwise might have boxed it out. (Now chains such as Target carry the brand.) The pandemic 'played to our benefit,' Wieder told me, and the company managed to navigate the surge in inflation and borrowing costs that followed it. That was, in large part, because the broader governmental response to the pandemic proved to be such a boon for firms and individuals. The Federal Reserve pushed borrowing costs to close to zero. The Trump and Biden administrations spent roughly $4 trillion on support to families and companies, canceling student loans, sending out checks, covering payroll, supporting the parents of young children, and shoring up the coffers of state and local governments. Even as interest rates rose, the private-credit markets remained robust. 'It's easier to absorb an uncertainty shock when underlying economic conditions are strong than when they're weak,' Davis said. From 2020 to 2024, the underlying economy proved notably strong. Today's uncertainty is far more intense and widespread than many businesses anticipated. Wieder and his co-founder had braced for some turbulence when Trump reclaimed the White House. They assumed tariffs on Chinese imports would rise, increasing costs on young families—even if goods like strollers and car seats were excluded from tariffs, as they were during Trump's first term. They hoped to preempt consumer sticker shock by lowering prices in advance. 'It was a really big bet for us,' Wieder said. 'We were protecting our consumer and trying to get ahead of it.' But there was no getting ahead of what followed. The economy is more vulnerable and less resilient than it was a couple of years ago. Interest rates are higher, personal-debt levels have climbed, job growth is slowing, and inflation remains an issue. 'A lot of lending was made during a time of very easy credit,' Diane Swonk, the chief economist at the accounting firm KPMG, told me. 'Now many of those businesses and consumers are being squeezed. Loans that were once renewed easily are now being denied or subjected to far stricter standards.' The political instability of the country, whipsawing between two polarized parties, has also left businesses shaky. And now the White House is proactively destabilizing the policy environment, ignoring court orders and usurping Congress's authority over spending. When it comes to tariffs, the Trump administration is making 'arbitrary executive decisions that are in some cases probably unlawful, and perhaps even unconstitutional,' Davis noted. During the pandemic, the country had a democratic government that made reasonable choices in response to a horrific tragedy. Now it has a more and more despotic government making bad choices for no reason. The past five years didn't prepare us for this. Article originally published at The Atlantic
Atlantic
25-05-2025
- Business
- Atlantic
The Era of Thrash
'It almost feels like we're trying to rebuild everything from scratch,' Michael Wieder told me. The company he co-founded, Lalo, sells sleekly designed baby gear, much of it made in China. In his first weeks in office, Donald Trump increased the tariff rate on most of the company's imported goods by 20 percentage points. In April, he jacked the rate up to 145 percent. Lalo had to stop bringing in products from overseas: Paying the tariff could have bankrupted the company. Trump dropped the rate down to 30 percent this month, but Wieder anticipates falling sales and a year of disruption. Ask any corporate executive or entrepreneur about the past five months, and they will tell you a story like Wieder's. Companies are struggling with unstable tariff rates, bond-market swings, canceled federal contracts, rising import costs, and visa challenges. They're unsure about the economic outlook. They're unsure about tax rates. They're unsure about borrowing costs. Last week, Moody's downgraded American debt, meaning it has less confidence in the country's growth and capacity to manage its deficits. This is a year of chaos, so dramatic in its upheaval that it sometimes obscures how weird things have been, and for how long. Over the past half decade, businesses have contended with a pandemic, a recession, an inflationary spiral, and a trade war. They have negotiated swift changes in consumer behavior and input prices and interest rates, as well as significant shifts in policy more broadly, from Joe Biden's New Deal Lite to Donald Trump's autarkic austerity. John Lettieri, the president of the Economic Innovation Group, a Washington-based think tank, calls it 'the era of thrash.' The American economy has weathered that chaos. Despite reams of studies indicating that uncertainty dampens investment and slows growth, today corporate profits are high, the jobless rate is low, productivity has climbed, and new businesses are blossoming. But that resilience may be wearing off, and we may have reached the end of our ability to withstand the disruptions. Is this spell of uncertainty so unusual? Even after talking with a dozen business owners and experts in recent weeks, I came away unsure. A lot seemed to have happened since COVID. Then again, reciting five years of major events might feel like singing the lyrics to 'We Didn't Start the Fire' regardless of which five years you picked. As it turns out, economists have ways of measuring uncertainty, by looking at newspaper coverage, stock-market gyrations, and corporate communications. Those measures show that, sure enough, the first half of the 2020s has proved remarkably unstable and destabilizing. 'We've been through a period of elevated uncertainty,' Steven Davis, of the Stanford Institute for Economic Policy Research, told me. Right now, we are in 'a big surge, relative to what was already a higher-than-average base.' Economists also have ways of measuring the impact of such periods on businesses and the economy writ large. Uncertainty about a country's growth path reduces consumption and investment, depressing industrial production. Uncertainty about inflation reduces bank lending, cutting down on business expansion and formation. Uncertainty about tariffs weakens supply chains and limits the number of businesses joining a market. The economies of countries with stable policy environments tend to grow faster than those of unstable countries. Given that research, you'd think that the past five years would have been dull ones for entrepreneurship and growth. The opposite is true. Americans are forming roughly a million more businesses a year now than they were before the pandemic, despite higher borrowing costs. Corporate profits are fatter than they were before the pandemic. Stock prices—a measure of investor optimism about future earnings—have been volatile, but are up 96 percent over the past five years. 'My biggest takeaway from the last five years of a one-after-another series of different kinds of shocks and uncertainties is an appreciation for the astonishing resilience of the U.S. economy,' Lettieri told me, a note of awe in his voice. Business experts pointed to a few reasons that the chaos leading up to 2025 did not strangle investment or damage growth. For some firms, the coronavirus crisis provided an opportunity by disrupting stodgy markets and upending consumer behavior. Lalo, for instance, benefited from the surge in interest in ordering online, which let it compete with big-box stores that otherwise might have boxed it out. (Now chains such as Target carry the brand.) The pandemic 'played to our benefit,' Wieder told me, and the company managed to navigate the surge in inflation and borrowing costs that followed it. That was, in large part, because the broader governmental response to the pandemic proved to be such a boon for firms and individuals. The Federal Reserve pushed borrowing costs to close to zero. The Trump and Biden administrations spent roughly $4 trillion on support to families and companies, canceling student loans, sending out checks, covering payroll, supporting the parents of young children, and shoring up the coffers of state and local governments. Even as interest rates rose, the private-credit markets remained robust. 'It's easier to absorb an uncertainty shock when underlying economic conditions are strong than when they're weak,' Davis said. From 2020 to 2024, the underlying economy proved notably strong. Today's uncertainty is far more intense and widespread than many businesses anticipated. Wieder and his co-founder had braced for some turbulence when Trump reclaimed the White House. They assumed tariffs on Chinese imports would rise, increasing costs on young families—even if goods like strollers and car seats were excluded from tariffs, as they were during Trump's first term. They hoped to preempt consumer sticker shock by lowering prices in advance. 'It was a really big bet for us,' Wieder said. 'We were protecting our consumer and trying to get ahead of it.' But there was no getting ahead of what followed. The economy is more vulnerable and less resilient than it was a couple of years ago. Interest rates are higher, personal-debt levels have climbed, job growth is slowing, and inflation remains an issue. 'A lot of lending was made during a time of very easy credit,' Diane Swonk, the chief economist at the accounting firm KPMG, told me. 'Now many of those businesses and consumers are being squeezed. Loans that were once renewed easily are now being denied or subjected to far stricter standards.' The political instability of the country, whipsawing between two polarized parties, has also left businesses shaky. And now the White House is proactively destabilizing the policy environment, ignoring court orders and usurping Congress's authority over spending. When it comes to tariffs, the Trump administration is making 'arbitrary executive decisions that are in some cases probably unlawful, and perhaps even unconstitutional,' Davis noted. During the pandemic, the country had a democratic government that made reasonable choices in response to a horrific tragedy. Now it has a more and more despotic government making bad choices for no reason. The past five years didn't prepare us for this.
Yahoo
17-05-2025
- Business
- Yahoo
How tariffs will impact baby product price tags: What to know
Tariffs are making parenting more expensive, and one baby brand is working to keep prices down. Michael Wieder, co-founder and president of Lalo, joins Asking for a Trend to discuss how the company is navigating shifting import costs while maintaining affordability for parents. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. Sign in to access your portfolio
Straits Times
17-05-2025
- Business
- Straits Times
Container shipowners swamped as US-China trade detente revives demand
Container ship bookings for China-to-US cargo have surged since the countries declared a 90-day truce on punitive tit-for-tat tariffs last weekend. PHOTO: REUTERS LOS ANGELES/HONG KONG - Container ship bookings for China-to-US cargo have surged since the countries declared a 90-day truce on punitive tit-for-tat tariffs last weekend, operators said, spawning traffic jams at Chinese ports and factories that could take weeks to clear. US importers of sneakers and sofas to construction supplies and auto parts are racing to get goods in before the deadline resets tariffs again, setting the stage for disruptions that recall the global transport quagmire during the Covid-19 pandemic. The cargo surge at major trade gateways like Shenzhen's Yantian Port, which handles more than a quarter of China's exports to the United States, has ship owners scrambling to coordinate berths and adjust vessel schedules. 'The demand is so high that we can only serve customers who have made long-term contracts with us,' a spokesperson for German container ship operator Hapag-Lloyd told Reuters. 'We have hardly enough space for spontaneous bookings.' Container-tracking software provider Vizion said average bookings for the seven days ended on May 14 soared 277 per cent to 21,530 20-foot equivalent units from the 5,709 twenty-foot equivalent units (TEUs) average for the week ended May 5. Owners of factories that make toys to holiday decor told Reuters they are booking previously frozen cargo headed to US stores, including Walmart. Lalo, for example, which sells its baby furniture online and through retailers like Target and is among the companies that gave factories the green light to move their finished orders. 'We had hundreds of thousands of units waiting to ship,' said Lalo co-founder Michael Wieder. 'These products can now get on the water.' 'Everybody is very busy from my company, at my friend's companies,' said Mr Richard Lee, chief executive of NCL Logistics, in China's southern metropolis of Shenzhen. 'They are preparing a lot of cargo, a lot of products, to be shipped immediately from China to the US.' SECOND TSUNAMI? The shipping surge will translate into a rush of arrivals at US West Coast ports in the coming weeks. Still, industry experts, including the executive director of the Port of Los Angeles - the busiest US seaport and No. 1 for ocean shipments from China, do not foresee a Covid-level tsunami of cargo. Rather, they project a large, but manageable wave. On May 15, the off-contract spot rate from Shanghai to Los Angeles shot up 16 per cent from the prior week to US$3,136 (S$4,080) per 40-foot container, according to data from maritime consultancy Drewry. That is less than half than in April 2024, but could jump sharply on June 1 to about US$6,000 per container if shipowners push through rate increases. In the early days of the pandemic, as now, cargo demand spikes overwhelmed factories and container ships, kinking supply chains. Shipping and retail experts said 90 days is not enough time for most factories to fill new orders. Fewer slots are available on cargo ships because vessel owners had been culling China-to-U.S. voyages and schedules. Now, ocean carriers are 'cancelling cancellations' of sailings, Drewry said. Demand, however, is markedly different this time. Mr Trump's second-term tariffs have weakened US retail sales, homebuilding and manufacturing - key drivers of container shipments. Moreover, many US companies are sitting on inventory accumulated before Mr Trump imposed tariffs on China and other countries. And nobody knows what import duties will be when the 90-day deadline expires in August. The Trump administration confirmed to Reuters that the U.S. rate would reset to 54 per cent, assuming no agreement is reached by the deadline. High anxiety Many retailers are prioritising which products to order and ship, said Ms Jessica Dankert, vice-president of supply chain for the Retail Industry Leaders Association trade group, whose members include Home Depot, Gap and Dollar General. 'It's still 30 per cent at the end of the day,' said Mr Jamie Salter, chief executive of Authentic Brands Group, referring to tariffs on China. Authentic Brands owns and licences clothing brands including Reebok, Champion, and Forever 21. Some large suppliers to Detroit's Big Three automakers told Reuters that on customers' requests, they are flying in parts from China and stockpiling them. Others declined to add to inventories, saying they lacked the space and funds to do so. A Halloween goods exporter from the city of Yiwu in China, who gave her English name, Cecilia, said tariff increases have cut total orders in half in 2025 and warned that prospective buyers are running out of time. 'If you order now, you will have an anxious wait to see if it will be too late,' she said. Mr Jimmy Zollo, chief executive at Joe and Bella, sells Chinese-made clothing for adults who have trouble dressing themselves due to arthritis, dementia or being in a wheelchair. He placed a new order with his supplier, even though the 90-day window could close before he can take delivery. 'We're hopeful that a new trade agreement is implemented, and the lowered tariffs do not expire,' Mr Zollo said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
