The Unseen Impact of US-China Tariffs on Businesses

The sudden spike in tariffs on Chinese goods has left many US businesses in a tough spot. For years, companies like Learning Resources have relied on China for manufacturing. Rick Woldenberg, the CEO, had planned for a 40% tariff increase, thinking it was the worst that could happen. But then, the US government raised the tariffs to 54%, and later to 145%. This massive hike has thrown Woldenberg’s plans into chaos. The tariffs are not just a financial burden; they also create a lot of uncertainty. Businesses struggle to plan ahead when tariffs can change so quickly. Isaac Larian, founder of MGA Entertainment, is trying to reduce his company’s dependence on China. But even products made in the US, like Little Tikes toys, are affected because they use parts from China. Larian expects prices to go up significantly, which could scare off customers. The tariffs are also changing how Americans shop. For decades, China has been a go-to for cheap goods. But with these new tariffs, that might change. China still makes a lot of what Americans buy, from baby carriages to fireworks. But other countries like Mexico and Canada are now the top sources of imported goods. The tariffs are expected to slow down the US economy and increase prices. Experts predict that economic growth will be lower in 2025 because of these tariffs. Consumers are already expecting higher inflation. The uncertainty and high costs are making it hard for businesses to operate. Some companies are looking for alternatives to China. Marc Rosenberg, CEO of The Edge Desk, was planning to produce chairs in China but is now exploring other markets. He found that making the chairs in the US would be much more expensive. Woldenberg is also struggling to find US manufacturers to partner with. The sudden tariffs have disrupted long-standing supply chains and left many businesses scrambling to adapt.