Small Business Owners, Groups Concerned About Trade War Implications
Last week saw fears of a trade war rising as it appeared that the United States and China would impose billions of dollars in tariffs on each other’s exports. While things on that front calmed some over the weekend, not everyone is at peace just yet. In fact some of those expressing concern about what tariffs and a potential trade war would do are small business owners.
CNBC recently talked to some entrepreneurs to get their thoughts on President Trump’s trade policies. Among them was Andrew Berman — the owner of a printing and graphics company in Rockville, Maryland. Berman told the network that he was greatly concerned about how his business would be affected by steel and aluminum tariffs. Since his company uses aluminum plates imported from France, Berman says he had been bracing for the 10% price hike that was on the table and notes that he’s unaware of any domestic manufacturer that makes the supplies. Luckily for him, the President announced a temporary exception for the European Union. Despite dodging a bullet this time, Berman voiced his opinion on tariffs, telling CNBC, “I’m going to hope the tariffs were well-intended, but as a domestic manufacturer with 40 employees, doing everything we can to support those employees and to do the best for our customers … there are unintended consequences.” He went on to say, “I think exempting countries was the right thing to do because the threat of reciprocating tariffs wasn’t good for anybody.”
Similar to Berman, leaders from some top small business groups have also expressed their opposition to some of the President’s trade policies. For example Todd McCracken of the National Small Business Association said, “In general, we think there is more room for harm to happen with small companies than good. The ripple effects of higher steel prices and a potential trade war and higher tariffs in other countries that can result from this will hurt companies across the economy.” Meanwhile economist Raymond Keating of the Small Business & Entrepreneurship Council noted, “The fact that the administration is concerned about intellectual property is a good thing, but this is not the way to go about it.”
It seems that, from week to week and day to day, the likelihood of the U.S. entering a trade war with China, Europe, or other countries varies greatly. Take for example the 1,100 point drop the Dow saw last Thursday and Friday when fears were high and the 400 point bump it experienced when Treasury Secretary Steven Mnuchin said negotiations with China were in the works. But when things seem to be headed badly, it’s important to remember that there are likely millions of small business owners who may be panicking that their operations could be upended overnight. Given these understandable fears it will be interesting to see if small business optimism experienced in 2017 will last as this year continues.