Anonymous Editorial by a 12 Volt Manufacturer
As a 12 volt businessman who carefully tracks recent tariff policy, I believe it is time for the US to do more than impose tariffs on Chinese goods. I suggest the US government create an agency that helps small businesses to move their supply chains out of China.
Last week, China reacted to President Trump’s statements on tariffs by escalating taxes on US goods and Trump immediately followed by declaring even more tariffs on Chinese products that will include car audio speakers, radios and amplifiers, as well as automotive mirrors, speaker baskets, and cameras.
Amplifier tariffs will increase from the current 25 percent to 30 percent as of September 1. Speakers will see a tariff, not at 10 percent, as stated earlier, but of 15 percent.
It seemed President Trump was already starting to backpedal on his declaration this weekend. But despite the ups and downs of tariff negotiations, there is a way to move forward on trade in a way that would benefit small business.
This Trade War and its continual battle with higher than standard taxable goods is not without its casualties. It’s no secret to many small business owners that times are tough. Being nimble and adaptive has always been a focus of any successful business owner. However, with the Trade War with China showing no end in sight, we are forced to learn a new skill….,global trade and world sourcing. And with no current, readily available support mechanism for teaching this skill set, today’s US businesses are feeling the impact.
Right now what is happening is our supply lines are being suffocated with no immediate relief to offer.
One way to support and help small businesses that are not “globally savvy” is to institute a government agency designed to teach and guide the small businessman. It’s one thing to impose a tariff that punishes sourcing in China, it’s another to actively help small businesses move their business elsewhere.
This agency would hire specialists in each of the respective fields to provide guidance, resources and pre-established communications to smooth the transition process from China to elsewhere. Even for those of us that ARE familiar with global trade, it is not convenient to jump on a plane for 16 hours just to see if the proposed supplier is legitimate. This government agent/agency would have a list of “Suggested or Pre-approved ” suppliers, fully vetted and confirmed reliant with the possibility of a discount or tax relief incentive to enhance their decision further.
Additionally, the agency might provide a path for businesses to network. Those seeking a manufacturer of a certain speaker component, for example, in the US, could be directed to others looking to set up manufacturing of that part in the US.
Although Trump stated that he would ask that interest rates on business loans be lowered again to help offset these tariffs, 1 to 2 percent off a business loan will not outweigh the scale of the heavily sided tariff costs.
It is true that this plan for an agency is not without its flaws for a few reasons. Historically, government agencies tend to move at a snail’s pace. Also, China has been a manufacturing powerhouse to the US small businessman for more than a few decades, with proven reliability, cost effectiveness and a blind determination to get the job done. These are tough traits to match overnight as Trump’s cabinet representatives are suggesting going to Malaysia, the Philippines, Vietnam or Thailand, which seem to lack the robust capabilities China possesses.
But now that we are in the middle of a Trade War with no quick end in sight, something must be done to reduce the collateral damage. Although, it seems as if this has become a battle of pride with the US market absorbing the larger share of the blows, it is not without a potentially positive outcome for the US assuming a swift solution is implemented.
Photo via CNN: Donald Trump and Xi Jinping