Donald Trump authorized tariffs of 10 percent on an additional $200 billion worth of Chinese imports on July 10, the latest move by the administration to honor the president's promise to take action against unfavorable trade practices.
Many people are worried about the tarrifs affecting our bottom line, especially for the little guy. Corportations could handle that increase but the little guy may be priced out of the game. So it this tariff good for us or bad. The answer is neither a yes or a no. It is basically how you will navigate the waters.
I would like to tell you a story of what I recently experienced. We received a call from one of our old costume jewelry manufactureres that wanted to close out some jewelry, then we got to talking... He is from the East Coast of America, where most of the costume jewelry used to be manufactured. Many of those factories shut down, I know this first hand because we lost some of our favorite closeout sources. It was sad to see a company just vanish and so many jobs lost. Many of these people who had expertise in the costume jewelry industry couldn't find jobs because so many costume jewelry manufactureres in the Untied States were shutting down. What was the reason for their shut down? Well, unfortunalty I would guess that China was beating the U.S. on the cost to manufacture these goods.
The good news is, that many retailers are not seeking to get Costume Jewelry manufactured in the United States again. The demand is so high that the few manufacturers that didn't shut down can hardly keep up with demand! There is hope that the Costume Jewelry manufacturing industry on the East Coast of America will once again shine bright.
How does this affect you though? Won't this make things more expensive? Again, I feel it is more how you navigate the waters. For example many U.S. based companies liquidate their goods. Their goods are usually better quality and can handle the travels down the supply chain. If you are thinking you are going to be priced out of the business, that is where I would point you to. Look for closeouts, you will be able to get items that a well made for better prices compared to importing.
As far as people who do private label manufacturing in China, they will probably take a hit because they will be competing with the big guys who will still be able to drive down their costs in other channels. Where the little guy pays more to begin with since they don't order serveral thousands of pieces. In addition to that, we may all see the price of certain things go up. All in all, I still don't think this tariff thing is so bad. 10% shouldn't cause too much concern for anyone, but it may be enough to make retailers choose the United States as their choice for manufacturing and that can have a positive effect. If the tariff prices do seem to start affecting the consmers of the United States, then maybe people need to look into consuming less, repurposing and focusing on quality over quantity. Maybe in an indirect way this will even help our planet?
What ideas do you have about the tariffs? Do you have any business strategies that you can share with the little guys reading this blog, who need ideas on how to stay ahead of the game?