The looming prospect of former President Donald Trump’s universal tariffs—set at 10%, 20%, or even 50%—has raised concerns among many, especially regarding how different businesses might navigate these duties. The question on everyone’s mind is: who will be able to evade these so-called “blanket tariffs”?
Trump’s Promises and Business Realities
Trump has hinted at potential exceptions for certain companies, primarily larger ones. During a recent appearance, he mentioned that prominent CEOs have direct access to him to negotiate their cases. This leaves smaller businesses, like beauty and wellness companies, wondering if they will receive the same consideration.
Key Insights from Trump’s Statements:
- Exceptions for Big Businesses: Trump emphasized that larger firms like Apple could secure exceptions, as illustrated by his anecdote involving Apple CEO Tim Cook.
- Smaller Business Concerns: Tina Wells, a small-business owner, voiced her frustration, questioning whether her business would be acknowledged amidst these blanket tariffs.
The Small Business Struggle
While larger corporations may have the clout to secure exceptions, smaller businesses face significant challenges.
Examples of Impact:
- Tina Wells’ Experience: Wells faced dire consequences during Trump’s previous administration, losing profits and ultimately having to destroy unsold products due to tariffs.
- The Need for Clarity: Small businesses are left in the dark, uncertain about how they can navigate the impending tariffs.
Expert Opinions on Tariff Exceptions
Experts are equally concerned about the implications of these tariffs, especially regarding the political realities that might influence who gets an exception.
Insights from Wendy Edelberg:
- Merit vs. Political Reality: Edelberg, director of the Hamilton Project at the Brookings Institution, noted that exceptions may not be granted based on fairness but rather on who has political access.
- Resource Allocation: Past experiences show that companies spent considerable time and resources to find ways around Trump’s tariffs, often to the detriment of smaller businesses.
Trump’s Focus on Larger Firms
In his discussions, Trump often cites examples of larger companies benefiting from tariffs. However, this raises questions about fairness for smaller businesses.
Anecdotes That Highlight the Issue:
- Kitchen Cabinet Maker: Trump referenced an unnamed kitchen cabinet maker who benefited from high tariffs due to reduced competition from overseas. Yet, this example doesn’t reflect the struggles faced by smaller importing businesses.
Economic Implications and Public Perception
As Trump reiterates his tariff plans, the Harris campaign has begun to emphasize the potential economic fallout. Mark Cuban, a prominent business figure, even labelled Trump as “the Grinch,” suggesting that tariffs could lead to increased holiday prices, making it harder for families to afford gifts.
The Broader Economic Picture:
- Trade Tensions: Studies indicate that new trade tensions could result in varied costs for businesses, affecting their pricing strategies and overall operations.
- Business Exhaustion: Edelberg highlights that businesses will face an exhausting period of planning and strategizing, with a lack of clarity around tariff structures.
Preparing for Uncertain Times
As companies begin to finalize plans for 2025 deliveries, they are operating in a cloud of uncertainty regarding tariffs.
Actions Businesses Should Consider:
- Long-Term Planning: Firms must prepare months in advance for potential tariff changes.
- Flexibility and Adaptability: Being adaptable will be crucial as companies navigate this evolving landscape.
Conclusion
The prospect of Trump’s blanket tariffs brings with it a host of uncertainties, especially for small businesses that may not have the same access to exceptions as larger corporations. As the debate unfolds, it’s clear that navigating these tariffs will require significant effort and foresight from all businesses, regardless of their size.
