i3 | May 13, 2019

Entrepreneurs Talk Tariffs

Sherill Mosee and Judy Bannon

Tariffs are taxes on the American people. Here is a look at two small American companies that are being hurt by these practices.

Tariffs Tax American Entrepreneurs

Every morning, millions of commuters hit the streets to start their day. Some are saddled with lunch, a change of shoes and a laptop for the office. On the way out the door, many women grab a handbag or two to carry all their belongings for the day.

I started my company, MinkeeBlue, to create stylish, functional bags for busy women who need to carry a plethora of things to get through the day. Since launching in 2014, MinkeeBlue has continued to grow by extending its product offerings to include backpacks, diaper bags, crossbody bags and tote bags.

But now I’m in the middle of a trade war threatening the existence of my business. Even more daunting is not knowing how long this trade war will last or how the trade policies will affect my business in the future.

Tariffs are paid for by Americans like me, not people in other countries. We are consumers, entrepreneurs and small businesses. My product was already subjected to high tariffs at 17.6 percent before the additional 10 percent was added last October. A new looming tariff of 25 percent more would kill my business.

When I first started my handbag business, I was adamant about manufacturing a Made-in-the-USA product. I worked with the Department of Commerce’s textiles division to help identify factories and source materials in the U.S. We found a handful of factories willing to work with me, but the final production costs plus materials were far too expensive. I simply couldn’t afford to manufacture my specialty bags in the U.S.

I understand that pursuing new trade deals allows American companies to effectively compete with foreign companies, but I’m not alone in thinking our approach is wrong. Tariffs Hurt the Heartland — a nonpartisan coalition representing thousands of workers, businesses and farmers across the country — recently released data that shows a dramatic increase in import tariffs. American businesses paid an extra $3.4 billion in tariffs this past December — significantly more than the $379 million paid on the same products the prior year. In Pennsylvania, where MinkeeBlue is headquartered, businesses paid $91 million in tariffs in December. That’s 10 times more than the previous year. Where is all that money going?

Small retailers like myself are already operating in a very competitive environment. The added challenge of tariff increases is troubling and disruptive, interjecting uncertainty in the market. As a minority- and woman-owned business, I hope to continue to grow my brand and inspire others to do the same. The administration should end the trade war and ease the burden of tariffs, so the American spirit of innovation continues to flourish.

Why America Needs to Say Goodnight to Tariffs

For many Americans, trade disputes between the U.S. and foreign countries like China may seem inconsequential or go entirely unnoticed. But trade wars lead to tariffs, which — in the case of some infants — can be a matter of life or death.

In the U.S., Sudden Infant Death Syndrome (SIDS) is the number one cause of infant mortality after the first month of age. In 1998, it was discovered that 90 percent of SIDS cases were caused by unsafe sleeping environments, almost exclusively seen in low-income households that simply could not afford to purchase a crib.

As the founder and executive director of Cribs for Kids, I’ve made it my personal mission to ensure that no mother faces the tragic loss of her child due to a preventable syndrome. Since 1998, Cribs for Kids has distributed more than 600,000 safe sleeping environments to families in need, in addition to educating families and caretakers on the fundamentals of safe sleeping.

While we’ve made measurable progress in decreasing infant mortality rates, our work — and the lives of innocent children — is being threatened by tariffs. Before these tariffs were imposed, we had locked in a price of $49.99 price tag per crib since 1998. However, we’ve now been forced to increase the price to $54.99 to compensate for the higher costs from tariffs.

Many partners have been unable or refused to pay the cost difference, because they mistakenly believe that China pays for the tariffs — not us. When our partners can’t afford to purchase cribs, they cannot distribute them to families in their local areas, and we risk reversing the progress we’ve made on reducing infant deaths.

Here in Florida, consumers, workers and businesses are bearing the costs of the trade war. According to a recent study from Tariffs Hurt the Heartland, Florida businesses have paid an extra $388 million in import tariffs since new tariffs were imposed. In December alone, this amounted to an additional $110 million. This is nine times higher than tariffs paid on the same products just a year ago. These added costs have rippled across the economy, hurting businesses like mine.

As a non-profit, Cribs for Kids is not required to pay federal taxes. But with nearly all our supplies imported from China, tariffs are serving as a 10-percent tax that we are forced to absorb. Updating our paperwork to reflect the new price has burdened our staff, cost us money and forced us to raise our prices. Unfortunately, this directly leads to higher death rates among low-income families.

The Juvenile Products Manufacturers Association (JPMA) hosted its annual conference in Orlando April 10, bringing together thousands of buyers, consumers and producers providing an opportunity to discuss the harmful effects of the trade war on the safety and well-being of children.

Other baby products showcased at the JPMA conference have been spared from tariffs, including car seats, high chairs, strollers and bike helmets, because they are deemed “safety equipment.” Despite a direct correlation between safe sleeping environments and deaths from SIDS, cribs are not yet classified as safety equipment. Until cribs secure that designation — or better yet, until these tariffs are lifted — Cribs for Kids’s mission will be curtailed and fewer lives will be saved.

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