As part of the United State’s ongoing trade war with China, the Trump administration instituted a 15 percent tariff on certain categories of Chinese imports, which went into effect in September. According to NPR, these categories include some food and apparel and even American flags. To reduce the impact on retailers and consumers this holiday shopping season, tariffs on some popular gift categories, including laptops, smartphones, and some toys, will not go into effect until December 15.
Now that tariffs on certain items are in effect, how have small businesses been feeling the impact? According to a survey of over 1,700 small business owners by BizBuySell. Forty-three percent of respondents said tariffs will increase business costs. More than half of those (64 percent) say they plan to increase prices and a quarter (27 percent) plan to cut spending on other areas.
Localize this national story by talking to small business-owners and consumers in your area. Retailers who sell goods imported from China are obviously impacted by higher tariffs, but remember that manufacturers who use materials from China or businesses that buy products imported from China to use in their own business may also feel the pinch.
Questions to ask small business-owners about tariffs.
How are they responding to the higher tariffs? Did they try to stockpile goods or seek out suppliers from outside of China? (Deadweight losses from buying more expensive products elsewhere are predicted to cost the U.S. billions of dollars.) Will they pass those added costs onto customers in the form of higher prices or absorb that cost in their margins? A combination of both?
For businesses whose products are already subject to tariffs, are they noticing any chance in consumer behavior? For those that sell products subject to the December 15 tariff, what are they doing to prepare?
Do they think that higher tariffs will impact consumer spending this holiday season? Why or why not? Are they planning any marketing pushes to offset the impact of tariffs?
The National Retail Federation has video case studies and other resources exploring the impact of tariffs on retailers. Consider contacting NRF or a local retail association for context on this issue.