The trade war between the United States and China rages on although President Trump announced last Tuesday that he was going to delay additional tariffs on Chinese imports that would’ve raised the prices for consumer goods. The announcement, while a relief for many, will only delay the inevitable as long as this trade war continues.
Among the parties negatively affected by the ongoing trade war are small businesses. In fact, 43% of small businesses said the Chinese tariffs are increasing costs, according to a survey conducted by BizBuySell. The businesses most affected by the trade war are those who import their goods from China. The same survey also asked for the percentage of business goods or materials that the business imports from China. According to the survey, 57% of small businesses import 1 – 25% of their goods from China, 25% import 26-50%, 12% import 51-75% and 6% import 76-100%.
There are many options for small businesses to combat these tariffs. One way to avoid them all together is to change suppliers to a company located outside of China, U.S. or otherwise. If enough businesses choose to buy their products from domestic companies, U.S. suppliers could gain a lot of new clients as a result of the trade war. Other options for small businesses include raising prices, cutting costs in other areas, firing employees or lowering their hours.
Starting on August of last year, the Trump Administration has been putting tariffs on Chinese goods in stages. Since May 10, almost half of all goods imported to China have been subject to additional 25% tariffs. New tariffs have been delayed until December 15 to help with holiday shopping, since most of the goods that would have been subjected to tariffs are consumer goods.
However, the trade war continues, leaving many victims in its path. According BizBuySell, 20% of small business owners surveyed said they do not think they would be able to stay in business if the current 25% tariffs last more than a year.
Looking at the big picture can often mean the little guy gets ignored, but the longer this trade war lasts, the more casualties will pile up.