Trump Administration Latest China Tariffs Could Impact Small Business Online Sellers

The Trump administration announced a new list of tariffs on Chinese products on Monday that may impact up to $200 billion in goods.

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In a statement, the Office of the United States Trade Representative, an executive office of the President of the United States, said”

“As part of the United States’ continuing response to China’s theft of American intellectual property and forced transfer of American technology, the Office of the United States Trade Representative (USTR) today released a list of approximately $200 billion worth of Chinese imports that will be subject to additional tariffs.

In accordance with the direction of President Trump, the additional tariffs will be effective starting September 24, 2018, and initially will be in the amount of 10 percent. Starting January 1, 2019, the level of the additional tariffs will increase to 25 percent.”

While Chinese-made goods have long been a staple of large U.S. retailers and brands such as Walmart, Target, Apple and many others, many small business sellers on eBay, Amazon, or using their own website are increasingly sourcing products from China and building their own micro-brands.

Previous tariff actions have largely impacted larger businesses, but this list of about 6,000 commodities includes categories such as gloves, belts, coats,  knives, tools, electric motors, speakers, electronics, and parts & accessories for bikes and vehicles.

Immediate Impact

While most sellers hopefully have imported their goods by now for the holiday season, some products may still be arriving over the next few weeks.

The immediate impact of a 10 percent cost increase for small businesses is a potentially significant last-minute expense weeks before the season starts to begin in earnest.

Small businesses should look over this list now and evaluate potential cost impacts on their imported goods so that they can make adjustments to selling prices if possible.

While the impact of tariffs on Chinese products on the overall U.S. economy to date has been mostly masked by a very strong economy, the timing and size of this action could be potentially very problematic for some small businesses.

Especially if the trade war between China and the U.S. doesn’t cool off, a 25 percent hike on goods going into 2019 could result in significant retail price increases on lower-cost consumer goods targeted by this action.

It might be wise for U.S. small businesses that will be affected by this tariff to consider for 2019 shifting to domestic production (if feasible) or search for manufacturers located in other low-cost producing countries.

Time will tell if this trade war is a meaningful and best way to address the concerns by the U.S. over Chinese market access and intellectual property protection.

But regardless, U.S. small businesses must keep an eye on the U.S./China trade war, especially if the situation continues to impact more consumer products.