Berliner Boersenzeitung - 'Stop production': Small US firms battered by shifting tariffs

EUR -
AED 4.301343
AFN 77.611852
ALL 96.514738
AMD 446.868239
ANG 2.096972
AOA 1074.017289
ARS 1697.403887
AUD 1.766826
AWG 2.11114
AZN 1.995739
BAM 1.956099
BBD 2.35916
BDT 143.251875
BGN 1.956777
BHD 0.442668
BIF 3463.32887
BMD 1.171229
BND 1.514231
BOB 8.094236
BRL 6.490135
BSD 1.171279
BTN 104.951027
BWP 16.475516
BYN 3.442526
BYR 22956.085522
BZD 2.35576
CAD 1.615886
CDF 2996.593612
CHF 0.931783
CLF 0.027188
CLP 1066.568306
CNY 8.246564
CNH 8.23796
COP 4460.039473
CRC 584.989331
CUC 1.171229
CUP 31.037565
CVE 110.281841
CZK 24.338023
DJF 208.581852
DKK 7.472562
DOP 73.371204
DZD 152.341263
EGP 55.872532
ERN 17.568433
ETB 181.965387
FJD 2.67474
FKP 0.875628
GBP 0.875489
GEL 3.144796
GGP 0.875628
GHS 13.453054
GIP 0.875628
GMD 85.500123
GNF 10238.563486
GTQ 8.975371
GYD 245.057422
HKD 9.113976
HNL 30.857712
HRK 7.53616
HTG 153.573452
HUF 386.728509
IDR 19556.008162
ILS 3.75619
IMP 0.875628
INR 104.915577
IQD 1534.434317
IRR 49308.735131
ISK 147.141933
JEP 0.875628
JMD 187.41862
JOD 0.830448
JPY 184.770768
KES 150.983056
KGS 102.424413
KHR 4700.717826
KMF 491.916529
KPW 1054.119659
KRW 1728.453141
KWD 0.359837
KYD 0.976149
KZT 606.152563
LAK 25368.873969
LBP 104891.417505
LKR 362.65538
LRD 207.321659
LSL 19.649501
LTL 3.458335
LVL 0.708465
LYD 6.34897
MAD 10.73654
MDL 19.830028
MGA 5326.813434
MKD 61.5594
MMK 2459.639723
MNT 4161.636701
MOP 9.388034
MRU 46.876158
MUR 54.052655
MVR 18.095929
MWK 2031.110162
MXN 21.121594
MYR 4.775145
MZN 74.845892
NAD 19.649501
NGN 1710.181964
NIO 43.106583
NOK 11.874743
NPR 167.921643
NZD 2.034444
OMR 0.451419
PAB 1.171279
PEN 3.944502
PGK 4.982761
PHP 68.60009
PKR 328.173614
PLN 4.207347
PYG 7858.199991
QAR 4.264489
RON 5.07775
RSD 117.127615
RUB 94.513433
RWF 1705.460433
SAR 4.392871
SBD 9.541707
SCR 17.757712
SDG 704.49846
SEK 10.855305
SGD 1.514755
SHP 0.878725
SLE 28.168488
SLL 24560.087729
SOS 668.202038
SRD 45.023799
STD 24242.072559
STN 24.503742
SVC 10.248565
SYP 12952.131237
SZL 19.647
THB 36.805911
TJS 10.793648
TMT 4.099301
TND 3.428524
TOP 2.820038
TRY 50.065939
TTD 7.950214
TWD 36.91585
TZS 2922.446274
UAH 49.525863
UGX 4189.639781
USD 1.171229
UYU 45.987022
UZS 14081.15027
VES 330.473524
VND 30817.959199
VUV 141.64718
WST 3.265178
XAF 656.057184
XAG 0.017438
XAU 0.00027
XCD 3.165305
XCG 2.111022
XDR 0.815925
XOF 656.057184
XPF 119.331742
YER 279.225162
ZAR 19.652061
ZMK 10542.469351
ZMW 26.501047
ZWL 377.135213
  • RBGPF

    0.0000

    80.22

    0%

  • CMSC

    -0.1200

    23.17

    -0.52%

  • GSK

    0.3200

    48.61

    +0.66%

  • RELX

    0.0800

    40.73

    +0.2%

  • RYCEF

    0.2800

    15.68

    +1.79%

  • AZN

    0.7500

    91.36

    +0.82%

  • VOD

    0.0400

    12.84

    +0.31%

  • NGG

    -0.2800

    76.11

    -0.37%

  • CMSD

    -0.0300

    23.25

    -0.13%

  • BTI

    -0.5900

    56.45

    -1.05%

  • JRI

    -0.0500

    13.38

    -0.37%

  • BCC

    -2.9300

    74.77

    -3.92%

  • RIO

    0.6900

    78.32

    +0.88%

  • BP

    0.6300

    33.94

    +1.86%

  • BCE

    -0.0100

    22.84

    -0.04%

  • SCS

    0.0200

    16.14

    +0.12%

'Stop production': Small US firms battered by shifting tariffs
'Stop production': Small US firms battered by shifting tariffs / Photo: Brendan SMIALOWSKI - AFP/File

'Stop production': Small US firms battered by shifting tariffs

When US President Donald Trump announced tariffs on almost all trading partners in April, Ben Knepler contacted the factory in Cambodia producing his company's outdoor furniture. "Stop production," he ordered.

Text size:

The announcement involved a 10-percent levy on imports from most partners, set to rise further for many of them. For Cambodia, the planned duty was a staggering 49 percent.

"That night, we spoke to our factory," Knepler told AFP. "We literally cannot afford to bring our own product into the US with that kind of tariff."

The decision was even more painful for Knepler and his Pennsylvania-based company, True Places, given that he had previously shifted production of his outdoor chairs to Cambodia from China, following tariffs on Chinese imports imposed by Trump during his first presidency.

"We were facing 25-percent tariffs in China, and there were zero-percent tariffs in Cambodia," Knepler recalled.

It took him a year to move the massive equipment and molds to Cambodia only to see another steep levy.

With Trump's "reciprocal" tariff hikes taking effect last Thursday, these Cambodia-made chairs face a lower -- though still significant -- 19 percent duty.

- 'Wheel of misfortune' -

Knepler's experience echoes that of many US companies producing everything from yo-yos to clothing abroad, after years of offshoring American manufacturing.

To cope, businesses use various strategies.

Some pass on the new costs as a surcharge to customers. Others halted imports when duties reached prohibitive levels, hoping Trump would strike bilateral trade deals that would make their businesses viable again.

Trump frames his tariffs as paid for by other countries, touting tens of billions in revenue this year -- but firms contest this description.

"We make the tariff payments when the product comes into the US," Knepler stressed. "Before we sell it, we're the ones who pay that tariff."

Now saddled with hundreds of thousands of dollars in debt he took on to relocate the company's production to Cambodia, Knepler worries if his business will survive.

He likens the rapid policy changes to spinning a "wheel of misfortune," resulting in a new tariff each time. Over four months this year, the planned tariff rate on Cambodian exports has gone from 0 to 49 percent, to 10 percent, to 36 percent, to 19 percent, he said.

"No one knows what it's going to be tomorrow," he added. "It's impossible to have any kind of confidence in what the rate will be in three- or four-months' time."

Economists warn that tariffs could fuel inflation and drag on growth.

EY chief economist Gregory Daco noted that the duties effective Thursday raise the average tariff rate to 17.6 percent from 2.8 percent at the start of the year -— the highest level since the early 1930s.

While Trump lauds the limited effects his duties have had on US prices so far, experts say tariffs take time to filter through to consumers.

Many of Trump's sweeping levies also face legal challenges over his use of emergency economic powers.

- Price hikes -

The global tariffs are especially hard to avoid.

Barton O'Brien said he accelerated production and borrowed money to bring in as much inventory as possible before Trump took office.

On the election campaign trail, the Republican leader had floated a 60-percent tariff on imports from China, where O'Brien makes most of his products.

The Maryland-based veteran selling dog harnesses and other accessories rented a container to ship as many products as he could before Trump's new tariffs would take effect. "I had dog life jackets in the bathroom," he told AFP.

There is "no way" to produce domestically, he said, adding that comparable American-made products sell for nearly six times his retail prices.

He makes some items too in India and Vietnam.

But Chinese products face an additional 30-percent duty this year, even under an extended truce now expiring in November. The rates for India and Vietnam are 25 percent and 20 percent respectively.

"If you look at the brands I compete with, we're all made in the same countries. We're all going to have to raise prices together," said O'Brien.

(H.Schneide--BBZ)