For small businesses across the United States, the broad prices of President Trump on Chinese goods could press their already tight margins and cause a sticker for customers.
Sarah Pitkin, who has four hardware stores in Virginia, said that the prices of electrical tools, barbecue and electronics grids that actions could all increase due to the 10% price on Chinese products, which took effect Tuesday. At least 40% of the goods that Ms. Pitkin sells are imported from China through her distributors, who, according to her, would probably transmit the cost of the price.
An exercise of $ 129 in his store, for example, could drop to more than $ 140. The beneficiary margins for electrical tools are tight, said Ms. Pitkin, which means that she should charge her customers the total cost of the rate.
“People cannot pay more for things and will not pay more for articles,” said Pitkin. Referring to the size of its inventories, it added: “Your items shrink to the point where you will really assess if you keep certain stores open.”
The consumer electronics, electrical equipment and textiles and clothing are among the main categories of goods imported into the United States from China, according to data from the census compiled by Torsten Slok at Apollo Global Management. The prices on these imports, and others, are about to have training effects throughout the economy, striking small businesses that depend on goods – whether directly or through distributors – particularly difficult.
In a survey of more than 600 members of the National Small Business Association, which should be published next week, more than half of the owners said they were concerned about prices under the Trump administration, and near A third were “very worried,” said Molly Jour, spokesperson for the association.
Kelli Courtney, owner of Margaret’s Boutique, a women’s clothing store in Decorah, Iowa, buys most clothing from manufacturers based in the United States. Tuesday morning, she went around the store, examining the labels on dresses and jeans of various brands, including one called Democracy.
“It seems very American, but if I look in their pants, in their jeans, it is said,” made in China “, said Ms. Courtney. “When he crosses the border sewn together, this company with which I work will pay the price, but of course, they will transmit it to me.”
The quantity of these costs that Ms. Courtney would transmit to her own customers is an open question. The price increases too could go bankrupt. And small businesses do not have the same lever effect as large area retailers to negotiate with their suppliers at a lower cost, she said.
Another problem is looming on Ms. Courtney’s commercial decisions: potential prices in Canada. About 15% of its clothing lines come directly from Canada, which, with Mexico, obtained a month of US prices for a month after their leaders concluded last minute agreements on Monday with Trump. On Tuesday, two of the Canadian clothing lines that sell to Ms. Courtney told her that they planned to absorb all the costs of the prices to come, rather than invoice it.
But uncertainty surrounding the prices on Canada already influences Ms. Courtney’s commercial decisions. She planned to present a commodity from a Canadian manufacturer at an event this spring, but “now I’m completely waiting,” she said.
The persistent threat of prices in Canada is a dilemma to which Michael Howard, who owns Howard Family Designs, a furniture company in Warren, Michigan, is also confronted.
In the United States, around 30% of tender wood is imported from Canada, which is also the source of a large part of the plywood that Mr. Howard buys in stores in his region. A plywood sheet of its local supplier increased to $ 80 last week, from $ 60 last month, he said. He attributed the push to the anticipation of radical prices in Canada.
This cost jump forces Mr. Howard to increase the estimates of his work. He now plans to quote a customer $ 2,000 for a tailor -made library, $ 300 more than he would have been billed.
“I cannot absorb the increase in the cost of a product,” said Howard.
For Jennifer Zimmerman, who does not have gluten, a gluten -free bakery in Bohemia, NY, the prices of crucial ingredients should increase. She buys gum from her gluten -free rice flour also comes from China.
Ms. Zimmerman thinks that her suppliers in the United States will probably reduce the cost of prices, which means that she also plans to increase prices in her bakery. But she fears that customers do not pay much more than she already invoices. Ingredient costs, including High egg pricehave already forced it to increase the prices of its bakery products in recent weeks.
“It will be more difficult for us to stay open,” she said.