Latest news with #WildRye
Yahoo
23-05-2025
- Business
- Yahoo
‘Unprecedented Threat': Outdoor Brands to Raise Prices If Trump Tariffs Continue
Cotopaxi. Wild Rye. Hydro Flask. Adidas. Osprey. What do these outdoor brands have in common? They're all telling their customers that President Donald Trump's tariffs will mean higher prices on outdoor gear. Since Trump raised taxes on imports from around the world, especially China, the U.S. economy has struggled to adjust to a new trade reality. That includes many of the biggest brands in the outdoor industry, which have begun speaking out about the impact of Trump's ongoing trade war on their bottom line. Over the last week, all the brands named above have warned their customers to expect higher prices on their shoes, apparel, packs, and other outdoor gear. Many of them make and ship those products from China, where Trump's combined tariffs can reach 145% for U.S. imports. Several of the brands above still haven't raised prices. But if Trump doesn't pull back on the tariffs soon, prices will have to go up, they said. 'As of today, duties (aka tariffs) for our goods have gone from 30% to 159%,' Wild Rye founder Cassie Abel said in a statement. 'While the exact numbers and timelines are still evolving, the TLDR version is that if these stick, manufacturing apparel will get more expensive in the near future, making it harder for smaller businesses like ours to stay competitive and for consumers to access the quality products they love at fair prices.' Many brands have announced a future of higher-priced gear. However, few of those companies are willing to say just how expensive things could get. That's because making plans is difficult in such an uncertain political environment, according to adidas CEO Bjørn Gulden. Despite a 'volatile environment,' adidas reported double-digit growth in the first quarter of 2025, Gulden said in a statement. But he still couldn't justify increasing the financial outlook for adidas for the rest of the year. 'Given the uncertainty around the negotiations between the U.S. and the different exporting countries, we do not know what the final tariffs will be,' Gulden said. 'Therefore, we cannot make any 'final' decisions on what to do.' 'Cost increases due to higher tariffs will eventually cause price increases, not only in our sector, but it is currently impossible to quantify these or to conclude what impact this could have on the consumer demand for our products.' The impact of Trump's tariffs is much greater on medium and smaller brands than on corporate giants like adidas. Executives at Helen of Troy, parent company of Osprey and Hydro Flask, have said that the chaotic trade policies of the U.S. mean the company can no longer forecast 2026 fiscal results. As a result, it's abandoning its long-term strategy, according to a news release on the company's website. Many smaller, growing brands — like Outdoor Element, an outdoor knives and multitool maker — are already reducing their workforce and pausing production, Shop Eat Surf x Outdoor reported. And Jen Rainnie, CEO of Canada-based outdoor brand Malvados, said she's had to pause nearly all wholesale orders from China to the U.S. 'The level of uncertainty right now is overwhelming — especially with the lack of clear, consistent information to help us navigate the situation,' she told Shop Eat Surf x Outdoor. Outdoor industry executives plan to voice their concerns to Congress this week through a Capitol Summit organized by the Outdoor Industry Association (OIA). That includes Cotopaxi CEO Lindsay Shumlas. In a letter to customers, she wrote that she would lobby Congress 'to help legislators understand the impacts of tariffs to businesses, products, and people.' OIA President Kent Ebersole agreed that the 'stakes remain high' for the outdoor industry. In a letter posted on the OIA website, Ebersole wrote that trade instability and threats to public lands represent 'unprecedented threats.' 'The challenges our industry faces are putting existential pressure on businesses,' Ebersole wrote. 'That's why our focus now is urgent and business-critical. Whether we're calling for balanced trade policy, stronger protections for public lands, or a well-resourced federal workforce to steward the places we love, we're not just advocating — we're shaping the future of the outdoor industry.' Outdoor brands aren't the only U.S. industry calling for immediate changes to Trump's trade policy. U.S. Treasury Secretary Scott Bessent called Trump's policies regarding the trade war with China 'unsustainable' and expected a 'de-escalation,' he told The Associated Press this week. It remains unclear, however, if Trump will actually pull back. And telling customers that Trump's tariffs are raising prices comes with its own risk of reprisals. When anonymous reports surfaced that e-commerce giant Amazon would display the exact cost of tariff-related price increases alongside its products, the White House responded immediately. Press Secretary Karoline Leavitt called it a 'hostile and political act.' Jeff Bezos, the Amazon founder and a prominent backer of Trump's 2024 campaign, denied any plans to display increased prices from the tariffs. Outdoor Industry Confronts 'Scary' Future of Higher Tariffs
ABC News
15-05-2025
- Business
- ABC News
What Trump's China tariffs did to businesses
Sam Hawley: This week, Donald Trump paused his massive tariff on Chinese goods entering the US for 90 days and reduced it from 145 to 30%. China reciprocated. So is the US President's economic dream of bringing manufacturing back to America dead? Today we chat with a US designer caught up in the tariff chaos about what it's been like and to an economist to make sense of it all. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. Cassie Abel: I'm Cassie Abel. I'm the founder and CEO of Wild Rye. We're a women's outdoor apparel brand and we're based in the state of Idaho. Sam Hawley: Yeah, and you've had a pretty rough time, I would say, in the last little while because of Donald Trump's tariffs. Cassie Abel: Yeah, to say the least. It's been the last month and a half has felt like 17 years. Donald Trump, US President: My fellow Americans, this is Liberation Day. For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike. News report: Donald Trump has promised his scattergun tariffs will see markets boom, but instead Wall Street was flooded with red ink. News report: Another tumultuous day on the New York Stock Exchange. Interviewer: Is it OK in the short term to have a recession? Donald Trump, US President: Yes, everything's OK. What we are, I said, this is a transition period. I think we're going to do fantastically. News report: Following weeks of turmoil on world financial markets, Donald Trump has agreed to lower the temperature in the trade hostilities between the US and China. Donald Trump, US President: We're not looking to hurt China. China was being hurt very badly. They were closing up factories. They were having a lot of unrest. And they were very happy to be able to do something with us. Sam Hawley: Oh, my gosh. Yeah. So before we move on to how you're actually faring, just tell me a little bit more about your business. When did you begin it and what was it all about? Cassie Abel: Yeah, absolutely. So Wild Rye is a women's specific technical apparel brand we launched in 2016. I personally have worked in the outdoor industry for a really long time and just saw that most women's apparel was basically just men's apparel adapted for a woman and not adapted very well. So we ended up launching Wild Rye to bring women a better option. And all of our working capital is a loan that's secured by my house. We started in 2016. We actually attempted production in the US and our product came back so flawed, so delayed that it almost sank our business before we even came to market. So I have scarring experiences. Sam Hawley: So you design your clothing in the United States and originally you did try to manufacture it in the United States. Cassie Abel: Yeah, the quality was low. The cost was really high. The communication with the manufacturers was really challenging. You know, in addition, most of our fabrics are highly technical, so we're importing them from overseas anyways. So the expense to ship high quality fabrics from overseas started to mount. Those were the primary ones and I just didn't feel like it was a way to scale a business. Sam Hawley: So in your mind, there was no way that you could have been a profitable business if you had continued to make the clothing in America. So you shifted to China. Cassie Abel: Yeah, exactly. So after our first season, my now former business partner and I talked to many other outdoor industry professionals and we ended up landing with some really amazing factory partners in China and we've been with them pretty much ever since. And so we've built incredible relationships with the factory owners. They've come to our small office here in Idaho to meet and we've gone over there. And yeah, I mean, these are really amazing human beings who are running these factories. This isn't like a distant enemy. These are real people with really high quality values and standards. So yeah, I mean, we've been in China ever since. They believed in us. They took bets on us when we were teeny tiny and we've grown together. Sam Hawley: And your business was really in a pretty good position right before Donald Trump introduced his tariffs. Cassie Abel: Yeah, I mean, our sales are booming. We haven't raised any prices yet, so we haven't necessarily seen a massive decline in our consumer demand. But our cost was unmanageable in the first month and a half since the reciprocal tariffs were put into place. So yeah, I mean, we've spent the last month and a half scrambling. I spent a week in D.C. with the Outdoor Industry Association lobbying for exemptions and tariff reductions. Yeah, I mean, it was hard to see a path through the 145 percent tariff. Sam Hawley: Yeah, I was going to say, I guess when he slapped that 145 percent tariff on China, you would have been really looking closely at your books. So what were the figures actually showing you? How much was this going to cost your business? Cassie Abel: Well, perfect example, we have a purchase order that we placed back in December for roughly $700,000. We budgeted $200,000 for the tariffs because apparel already pays a really disproportionately high amount in tariffs. And we were looking at those tariffs increasing from $200,000 to $1.2 million. So more than the actual cost of the product. Sam Hawley: Wow. So you could no longer make a profit on that product? Cassie Abel: Not even close. all the uncertainty out there, it's been really hard to imagine making commitments because every other country that is known for technical apparel originally had roughly 50 percent tariffs put in place on April 2nd. So without knowing what's going to happen at the end of the 90 day pause, it's really hard to make adjustments. There's a lot of considerations, a lot of things to weigh. It's like putting together a 5,000 piece puzzle with half the pieces missing. But the US is not an option. We'd move to South America or Europe or elsewhere in Asia long before we'd move back to the US for technical apparel. Sam Hawley: And Cassie, at this point, what are you doing with the goods that have already been made in China? Are you leaving them there? Cassie Abel: Well, the news on Monday is that the tariffs have been reduced for 90 days. So we're looking at 30 percent tariffs for the next 90 day window. So we had actually paused production on a lot of products. So now we're... Sam Hawley: Going fast! Cassie Abel: Going the other direction and scrambling to get products made because they'll have to be on a boat within the next month in order for me to feel confident that they'd get through customs and border patrol prior to the tariffs increasing because the shipping rates are going up. The capacity on cargo ships is going down because every brand is rushing to move product right now. And so basically woke up on Monday morning to a whole new set of problems. Sam Hawley: Oh my gosh. Yes, doing business in America right now. It just sounds incredibly stressful. Do you think there are a lot of business owners that will just say this is now too hard? Cassie Abel: I mean, I had that thought. Half jokingly, I love my brand. We have such an incredible team. I'm not going anywhere. Yeah. But I was talking to my husband and I was like, even if I decided I wanted to wind this down, if I decided this was too hard, I couldn't because our house is on the line for this. You know, I'm sure there will be some attrition of brands in the next six months. But, you know, everyone has a unique set of problems and things that they're up against. Justin Wolfers: I'm Justin Wolfers. I'm a professor of economics and public policy at the University of Michigan. Sam Hawley: Justin, what a whirlwind time for business in America and China. An understatement. Justin Wolfers: It's the only time in the world where people are excited to talk to economists. Sam Hawley: That's very true as well. And a pretty confusing time for everyone else. Anyway, so Donald Trump, he slapped this 145 percent tariff on Chinese goods in early April. China, of course, responded with 125 percent tariff. And that really did bring a lot of trade between the nations to a complete standstill, didn't it? Justin Wolfers: Absolutely. Sam, I'm going to be a stickler on language here because I think clear language leads to clear thinking. It's quite common to say that Trump put a tariff on Chinese goods, but it's only half right. Trump put a tax on Americans who imported Chinese goods. The moment you understand that, then you start to see who tariffs help and who tariffs hurt. And it helps you understand both the economics and the politics of this. A tariff, in this case, is a tax on Americans. And they would then pass it on to American consumers. Sam Hawley: Yeah, OK. So the tariff on China, of course, has now been reduced to 30 percent and China has dropped its to 10 percent. So just tell me, who do you think blinked here? Was it Trump or China? Donald Trump says he did it because China was suffering a lot. Justin Wolfers: I think it's entirely wrong to say who won, the US or China. The reason for that, when we think about economics and when we think about trade, we often think about competition. But it turns out that my field of economics is far more beautiful than that. Economics fundamentally is about cooperation. Really, the question is, if I get together with someone from China, you know, I've got a bunch of tasks I need to do. They've got some tasks they need to do. Could we just reallocate those tasks so they do the tasks they're really good at and I do the tasks I'm really good at? And so between us, we end up producing more together than we would apart. So to turn this into international trade, America's got a great deal of very skilled software engineers, people who are really good at writing iPhone operating systems, for instance, or inventing new iPhones and patenting new iPhones and so on. China has got an enormous amount of factory labour and actually some very precise factories as well. And so basically, if Americans do what they do best, spend a lot of time designing phones and the Chinese do what they do best, actually make the phones, people in America get very well put together phones at very reasonable prices and people in China get access to cutting edge technology and we're both better off. So both Chinese and Americans were being hurt by America's tariffs. Both Chinese and Americans were being hurt by China's tariffs. So if both of them blink or if even either of them blinked, it actually makes people in both countries better off. And that's something to celebrate. Sam Hawley: Yeah. But Donald Trump, he said he was doing all of this because he wanted to make America great again. He wants Americans to make things for Americans. Has he given up on that dream? Has he? Is that just not actually possible? He can't actually reinvent manufacturing in the United States. Justin Wolfers: It could happen. But is it a good idea? So right now, the United States is very close to full employment. So basically everyone who wants a job has one. So that means if we want a bigger manufacturing sector, that means people have to move away from other jobs. So is it a good idea to move people away from writing software code for the next iPhone and move them across to the production line to screw screws into iPhones instead? My answer to that is no. The president has a different answer. But it turns out when you talk to people in factories, most folks in factories don't want their kids to work in factories. They want their kids to adopt all of the miracles of a modern economy, which is that we can work in white collars and not go home with aching bodies and sore fingers. You know, in the US at the very least, rich people seem to think that what poor people want is to work in factories. What's difficult here is discussing this in the context of Trump. The reality is Trump doesn't understand the very simple basics of economics. The reason I want to put it in such stark terms is Trump does see the world as a competition, that the only way for him to win is for someone else to lose. He has a very fixed pie sense of the world. He misses these opportunities to grow the pie because he's so intent on bullying to get the bigger slice. Sam Hawley: Well, this is, of course, a 90 day deal, if you like, the reduction in the tariffs. Do you think that Donald Trump would really go there again, though, that he would actually increase the tariffs to levels above 100 percent, given what we've seen? Justin Wolfers: Look, any sentence that begins with, can you predict what President Trump will do next? If it's answered honestly, has to be answered with no, no one can predict this at all. And just to give you a couple of highlights, could anyone have predicted that the first act of the Trump presidency would be to impose punitive tariffs on Canada, our nearest neighbour, closest ally? And like, who hates Canadians? Sam Hawley: Exactly. Justin Wolfers: Or more recently, the president sort of woke up one day and suddenly tweeted that he wanted to put 100 percent tariff on movies. It's clear he hadn't spoken to any of his staff. He hadn't thought it through. He hadn't realised that that would undermine the competitiveness of the American movie industry. So the point that you get out of that is that the tariff button is just there inside his phone and he seems willing to push it. You know, the half-life of a Trump trade policy is around about two weeks. So we learned what happened in China. But what we haven't learned is how long that policy will stick around for. Sam Hawley: Justin Wolfers is a professor of economics and public policy at the University of Michigan. Cassie Abel owns Wild Rye, a woman's clothing label designed in the US and manufactured in China. This episode was produced by Sydney Pead and Sam Dunn. Audio production by Adair Sheppard. Our supervising producer is David Coady. I'm Sam Hawley. ABC News Daily will be back again on Monday. Thanks for listening.
Al Jazeera
09-05-2025
- Business
- Al Jazeera
‘I don't have the cash to pay for these tariffs': US small biz suffers
After working in the outdoor industry for three years at Smith, which makes helmets and goggles, Cassie Abel realised there were not many brands built exclusively with women in mind. In 2016, she founded Wild Rye, a rural Idaho-based outdoor apparel brand for women. Building her business was a labour of passion and included big risks, such as leveraging her house for capital. It was not until 2021 that she became profitable. Now, her business faces yet another existential threat: High tariffs will drive up her costs, and she's unsure how long she can keep her business alive. Abel is expecting $700,000 worth of purchase orders arriving in July, which encompasses the brand's full fall lineup, which she ordered in December from suppliers in China. She says Wild Rye, which imports twice a year, will now be subject to $1.2m in tariffs for its upcoming shipment. 'I don't have the cash to pay for these tariffs. These tariffs are due upon entering the country. I won't have time to sell this product before the tariffs are done. We could be out of business in the next four months,' Abel said. Since taking office, United States President Donald Trump has imposed a 145-percent tariff on China and 10 percent on all other countries. The president has claimed the tariffs incentivise businesses to bring manufacturing back stateside. But that has left hundreds of small businesses like Abel's scrambling to find ways to manage the hefty fee. US Treasury Secretary Scott Bessent told a group of reporters at a White House briefing last week, 'The goal here is to bring back the high-quality industrial jobs to the US. President Trump is interested in the jobs of the future, not the jobs of the past. You know, we don't need to necessarily have a booming textile industry like where I grew up again, but we do want to have precision manufacturing and bring that back.' His comments put additional pressure on employers like Wild Rye. To weather the storm caused by the Trump administration's tariffs, Abel has frozen hiring, paused salary increases for her 11 full-time employees, and stalled new product development. She said she will need to raise prices on her products for the fall, ranging from 10 to 20 percent. On April 29, she and hundreds of members of the outdoor apparel community met leaders in Washington to push for assistance. Abel said Democrats were unsure what they could do amid Republican control of the House of Representatives and Senate, while Republican leadership feared retribution if they went against the president. 'I was hearing it [concern] from both sides of the aisle. There's frustration, it's like it's hard to find a path forward. Everyone understands that small businesses are going to crumble, and everyone feels like there's no playbook for this,' Abel told Al Jazeera. The US Chamber of Commerce has also pushed the White House to carve out exceptions for small businesses like Wild Rye, which the Trump administration quickly dismissed. Abel says she started as a made-in-USA brand, but that was not financially sustainable. 'That almost tanked the business before we launched because the US simply doesn't have the capability or capacity to produce technical apparel,' Abel said. Most textile products like clothes and shoes that Americans buy are not made in the US. The US imports about 97 percent of clothes, mostly from Asian countries including China, which has been hit hard by the 145-percent tariffs, but also from Vietnam and Bangladesh. But it's not just the apparel industry facing this challenge. It's the entire small business community – defined as a business with 500 employees or less – a portion of the economy that employs roughly 61.7 million Americans, representing 45.9 percent of the US workforce and accounts for 43.5 percent of the US gross domestic product (GDP). The broader economy has also already felt shockwaves from the tariffs that will impact small businesses. The US GDP fell in the first quarter, per the US Commerce Department, by 0.3 percent after a 2.4 percent increase in the fourth quarter of 2024. According to ADP, job growth stumbled to 62,000—a more immediate metric than the US Labor Department's jobs report, which lags by a month and shows 177,000 jobs added. Consumer confidence hit a 13-year low, and consumers are pulling back spending amid fears of further rising costs — which, in turn, means fewer people could buy products ranging from outdoor apparel to single-origin teas and spices. In 2014, Chitra Agrawal founded Brooklyn Delhi, an Indian cuisine-inspired food brand in Brooklyn, New York, with her husband Ben Garthus. Over the last decade, they have created a range of products, including 14 different condiments and simmer sauces, that started as handmade and have since grown into a large-scale business distributing to major retailers like Whole Foods and Kroger, as well as meal kit services like HelloFresh and Blue Apron. Because hers is a specialty brand, sourcing certain ingredients from other parts of the world is not just part of the brand's allure, it is also a necessity. 'We are making these authentic Indian products that require ingredients that are just not grown or available at scale in the US. It kind of puts us in a tough place,' Agrawal told Al Jazeera. Agrawal said 65 percent to 70 percent of the ingredients she uses come from outside of the US, primarily from India, and a handful from Mexico and Sri Lanka, as well as glass from China. Like Agrawal, Anjali Bhargava faces a similar challenge. The founder of Anjali's Cup, a brand that makes single-origin spices and teas from around the world, sources ginger from Vietnam, turmeric from Thailand, and tea from India, ingredients that, in her view, make the brand so special. In 2024, the United States was the largest importer of both ginger and several different varieties of tea, including black and green, according to Tridge, a global food sourcing data analytics firm. 'I am going to have to pay the tariffs on those things if it comes down to it, if I want to continue making those products. [Not being able to make these products] is not negotiable for me,' Bhargava said. She says that in order to cut costs, she is trying to find domestic alternatives for aspects of her production, like packaging, a big expense. Pre-tariffs, she imported tins from China. Once her stock runs out, she may have to discontinue four to six of the 11 products she offers because she cannot afford the extra cost for imports. 'Basically, to keep the business moving, I'm being forced to undertake a complete overhaul of my retail packaging [which can be produced stateside], which means redesigning, re-photographing, and that comes with a cost,' Bhargava added. She says she will need to move away from tins, which she imports from China and explore other kinds of packaging options like pouches. The unexpected one-time costs of $10,000 to $20,000 will eat into her already slim margins, Bhargava says. She is the only full-time employee, but hires freelancers and outsources to other businesses for tasks ranging from packaging to delivery. Unlike larger companies, it's much harder for small businesses to absorb the tariffs. 'We've seen that it's hard for small businesses to balance those costs as they have very small margins. They are the ones who are going to get hit hardest,' said Alexis D'Amato, director of government affairs for Small Business Majority, an advocacy group for small businesses. 'They're bracing for impact on how they're going to either eat these costs or pass them on to the consumer, which nobody wants to do,' D'Amato added. Raising prices in response to market pressures does not guarantee they will fall when costs decline. At the start of the COVID-19 pandemic, supply chain disruptions forced producers to increase prices. But even after costs eased, grocers kept prices high because consumers continued paying them — and no policy or market force compelled reductions. That burden weighs on Agrawal. 'Once you make that change and say at one point, I want to roll back those price increases, there's no guarantee that on the shelf, the prices will decrease. It's very difficult when you're working with grocery stores to get your prices to be lowered again. We have to really be very careful about this move. We're still contemplating it,' said Brooklyn Delhi's Agrawal. But these looming concerns have led consumers and businesses to import goods before tariffs kick in, to stock up on key items that may help them avoid raising prices, at least for some time. In the first quarter, US imports surged by 41.3 percent, including by entrepreneurs like Sean Mackowski, owner of Tallon Electric, a company that makes guitar pedals in Columbus, Ohio. 'We did stock up a lot. I think everybody did their best to scramble, hoping that that will bridge the gap to this going away. But if we get to the end of that bridge, we'll either need to find a different way or we're going to start running out of stuff,' Mackowski told Al Jazeera.
