Small business owners who sell goods made in China and Vietnam are delaying orders ahead of tariff hikes that take effect Wednesday — with many fearing an extended trade war will force them out of business.
The Trump administration announced Tuesday that the levy on products from China will soar to 104%, while goods from Vietnam will be hit with a 46% duty. Nearly 30% of clothing sold in the US is made in China and 25% is manufactured in Vietnam.
New York-based Day Owl, which makes its stylish backpacks that sell for $155 a pop in Vietnam, could go belly-up within 30 days, owner Ian Rosenberger said.
The 46% tariff would increase Black Owl’s duty to $22 from $5 and force Rosenberger to raise his price to $212, he told Reuters.
Rosenberger, who launched Day Owl six years ago, has paused all future orders from his factories in Vietnam and has enough inventory on hand for about a month.
Another New York-based clothing manufacturer who makes men’s suits, sweaters and outdoor jackets in China for US retailers fears he’ll have to shutter his company within a couple of months if the bad blood between Beijing and Washington persists.
He is expecting to lose money on most of the one million garments that are being produced in China now, including black sweaters he ordered for religious Jews in Brooklyn that are expected to arrive on April 15.
“This is the end of my family business,” the owner, who did not want to be identified, told The Post.
Unlike large manufacturers like Nike, small companies don’t have the leverage with their overseas partners to lower their costs.
Wild Rye, which makes its winter jackets and other outerwear for women in China, just implemented a hiring freeze and can’t offer its 11 employees raises, founder Cassie Abel told Reuters.
“This is going to create a huge amount of strain on the business,” she told the outlet, referring to the tariffs.
It’s not just apparel makers who are bracing for financial shocks.
A Wisconsin coffee roaster and importer said he’s facing a $100,000 tariff bill within weeks for the four shipments of beans worth about $800,000 that are on their way to US ports from Brazil, Columbia, Guatemala and Ethiopia.
“Anything that was shipped after April 4 will be hit with a tariff of 10% to 18%,” said TJ Semanchin, president of Wonderstate in Viroqua, Wis.
His company supplies coffee shops, grocers – including Whole Foods – and restaurants.
“I’m having hard conversations with my bank right now because my line of credit is very tight,” Semanchin told The Post.
He estimates that tariffs will cost Wonderstate $300,000 this year – money that he had earmarked for new equipment for his growing business and for opening a fourth cafe.
“This is an unbudgeted and unexpected expense,” he said.
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