Tariffs force businesses to strategize to preserve profits

NEW YORK >> Faced with the Trump administration’s 25% tariff on imports from China, Ruth Rau is looking to other countries to manufacture baby and toddler toys.

“No one domestically can produce the quality we want, and with the cost of shipping and the proposed new regulations, it’s not going to be cost-effective to produce them in China either,” says Rau, owner of Mouse Loves Pig.

The 25% tariffs President Donald Trump has imposed on thousands of Chinesemade products have small business owners trying to determine how or whether they can limit the damage to profits from import duties. Many owners will see if they can pass on the added expense to customers. Some, like Rau, are considering getting products manufactured in countries where the U.S. isn’t waging a trade war, but that’s an expensive alternative that takes time to work out. Others want to find U.S. suppliers, but depending on the product it may be impossible or not much of a moneysaver.

Trump raised the tariffs to 25% from a previously imposed 10% last Friday after China refused to meet U.S. demands; trade talks between the countries broke up soon after.

Rau wants to shift production from Nicaragua but manufacturers have told her the prices she’d pay them could go up 30%. Rau, who lives in Winchester,

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In some ways, tariffs are like product shortages and severe weather small businesses can suddenly contend with. As Phillip Kim, an entrepreneurship professor at Babson, puts it, “they’re one of the unexpected things that might happen in the course of doing business that owners can’t predict.”

KEITH SRAKOCIC - THE ASSOCIATED PRESS PHOTO Synthetic rope, with labeling indicating it was made in China, is displayed in a store in Cranberry Township. The 25% tariffs President Donald Trump has imposed on thousands of Chinese-made products have business owners trying to determine how or whether they can limit the damage to profits from the import duties.