Economists on both the left and the right are sounding the alarm about the steep new tariffs that President Donald Trump is imposing on many of the United States' trading partners. Liberals economists Paul Krugman and Robert Reich are warning that consumers and businesses can expect to pay a lot more for a variety of imported goods, from electronics to food to construction materials. And that same warning is coming from right-wing economists who often quote the late Milton Friedman.
In an article published on September 29, New York Times business reporter Sydney Ember details the problems tariffs are causing for small businesses.
"While many larger companies have integrated soaring levies that kicked in last month into their businesses without raising prices for customers," Ember reports, "a growing number of smaller businesses are confronting a make-or-break moment. Many small businesses lacked the funds or storage capacity to stockpile goods before Mr. Trump’s tariffs kicked in. They have been reluctant to lift prices because they do not want to drive away customers. That has made some particularly vulnerable to the recent price shocks, leaving them with deteriorating profit margins and no easy choices. Because small businesses are crucial drivers of employment and growth, their health could have far-reaching implications in an uncertain economy."
According to Brandon Mills, chief executive of the Las Vegas-based Total Promotion Company — which specializes in promotional products and custom apparel — tariffs are forcing the small, Las Vegas-based business to make difficult decisions.
Mills told the Times, "It's hard to breathe…. It's difficult to have to survive because of poor policy."
According to Ember, Mills has already "laid off one of the company's seven workers" — and he "said the swelling cost of tariffs has so eroded his margins on some orders that he often wonders if he would have been better off not fulfilling them."
The worst for small businesses, according to Ember, may be yet to come.
"Most economic data does not yet reflect the strain from tariffs that small businesses say they are under, in part because many of the most onerous tariffs have only been in place since August," Ember explains. "A gauge of small-business optimism from the National Federation of Independent Business ticked up in August."
Read Sydney Ember's full New York Times article at this link (subscription required).
