'If this tariff takes effect, we are out of business': Small companies warn of widespread layoffs and shutdowns if Trump doesn’t back down from a trade war with China - Finance

‘If this tariff takes effect, we are out of business’: Small companies warn of widespread layoffs and shutdowns if Trump doesn’t back down from a trade war with China – Finance

  • It is expected that the Trump administration will accept tariffs for additional Chinese imports to the US for $ 200 billion.
  • Some companies say they will have to immediately fire their employees to cover expenses.
  • Others warn that they may have to close completely.

Win Cramer, the executive director of the American audio products business, felt that he was clearly concerned that he had contacted a US sales representative at a public hearing in Washington last month.

"If I come across a little nervous, it's because I sincerely believe that this is the biggest moment in the life of my company," said Kramer, according to the transcripts of the testimony. He desperately wanted the Trump administration to understand how his proposed import tariffs on Chinese goods worth about $ 200 billion could hurt his 13-year-old JLab Audio business.

Since JLab could not afford to cover the cost of a 25 percent tax on Chinese imports and had contractual price commitments with customers, Kramer said that the company would have no choice but to reduce its staff. He immediately had to fire 12% of employees, – he complains, and he needs to follow more.

Kramer lives in California, but, like hundreds of other business and industry representatives, he felt that hiking around the country is worth giving testimony before the USTR. Knowing that they were given only five minutes of testimony each, more than 350 submitted requests to tell how further escalations in the trade war between President Donald Trump and China could affect them.

The Trump administration imposed punitive import duties of about 50 billion dollars from the country, prompting responses from China. The public comment period for the next round of tariffs aimed at additional products worth $ 200 billion ends on Thursday, after which it is expected that Trump will take action.

"If this tariff comes into force, we do not have a business,

David Scheer, who runs the manufacturing company in Wisconsin, was among many witnesses who warned another round of tariffs, could put him in a situation similar to Cramer. Higher costs will threaten contracts with major customers, he was worried. The only alternative is to reduce dozens of jobs.

"Now we are between a stone and a difficult place," said Scheer from ECM Industries, his company based on Menominee Falls. "I do not want to be able to tell 50 or 60 people who lose their jobs as a result of these tariffs, but I may not have a choice."

For production and construction company Transdesic International, layoffs are not even an option.

"In fact, if this tariff goes into effect, we do not work," said Russell Western CEO. "We can not be the largest company in the northeast, but the cascading effect of destroying our business will hurt many people."

However, Trump argues that tariffs will ultimately help protect the US from what trade officials consider theft of intellectual property and business practices that are perceived as unfair. The return of jobs due to the reduction of the trade deficit, which, in the president's opinion, is a common sign of economic weakness, is one of his signature promises since the election campaign.

The problem is that production can be time-consuming, expensive and not always an option for small and medium-sized companies. For Econoco Corporation, a manufacturing company, it will theoretically take at least three years. Mark Zelniker, the president of the company in Hicksville, New York, said he would not really "survive" the costs associated with this and would be forced to close.

Several winners

A relatively small number of enterprises testified in agreement with the president. Paul Tsakhor, Executive Director The American company Keg in Pottstown, Pennsylvania, believes that tariffs will be effective "in eliminating China's bad practices without economic damage to US interests."

"This will effectively allow the US to return more jobs and stimulate growth, allowing companies in the US to be competitive by creating stainless steel kegs," said Chakhor.

The US steel industry was a rare champion of protectionism growth, which sharply increased domestic metal prices. Trump recently visited Granite City Works, a metallurgical plant in Illinois that recently announced tariffs, allowed him to increase production.

Otherwise, the winners of the trade war were few and far, especially since they are increasingly falling on consumer goods and restricts access to foreign markets. In July, Trump released a $ 12 billion aid package for farmers. The US, which is the key electoral district for the president and his party, who warned that a trade war could lead to staggering financial losses.

Beijing warned that this would lead to an escalation of economic sanctions against the US, if Trump will act further. While China does not import enough from the US to comply with the proposed fees for the dollar, it can increase tariffs or use other punitive measures, such as creating administrative headaches for American business.

"Administrative motivations are clear," said Darren Dunne, executive director of SOG Specialty Knives & Tools in Linwood, Washington. "But, accordingly, we must ask ourselves if this process is starting to get out of hand."

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