Spotlight: Trade war hits hard small American businesses despite White House claims - EntornoInteligente /

by Peter Mertz

BOULDER, the United States, Sept. 15 (Xinhua) — Krimson Klover, a small, boutique women’s clothing business located on the foothills of the U.S. state of Colorado’s Rocky Mountains, is already losing revenue due to the U.S.-China trade war.

“People will be going out of business because of this (trade war),” said Krimson Klover’s CEO and founder Rhonda Swenson.

Each day across America, pundits and economists look at the data and shake their heads, while businesses have been paying the cost of a trade war that is now one year old.

Ironically, just earlier this week, U.S. Treasury Secretary Steven Mnuchin said, “We have not yet seen any impact on the U.S. economy.”

Not true, say the people in the fields.

“We’re in a really competitive industry…it’s a huge financial burden — taking the tariffs is a big hit,” Swenson said.

Krimson Klover is a “small” business fitting in the category of “under 10 million (USD)” in sales, with 95 percent of its product made in China, she said.

“We have a lot of things on hold, to see how it all shakes out,” Swenson told Xinhua on Thursday.

Outdoor industry officials say some businesses have already been hit “astronomically,” and that the small business in the industry is getting hammered the hardest — by the extra fees on goods from China.

“It’s the smaller businesses — both American and Chinese — that are getting hit the hardest,” she said.

Originally from Texas, Swenson jumped away from corporate America 30 years ago after a trip to South America, after which she decided to design and produce fashionable sweaters.

Four companies later, the entrepreneur hit her stride in the Rocky Mountains state with Krimson Klover — clothing tailored toward active and athletic women, pretty like the company’s founder — who loves travel and has been to China dozens of times.

Although most of their business is done through online sales, the store in Boulder still sees a lot of customers.

In China, Swenson met her business partners — other small business entrepreneurs whose factories ramp up and knock out her orders whenever she calls.

Like the four factories in China the company uses for manufacturing its clothing — the business has seen big growth in recent years.

In June, Krimson Klover’s chief operating officer Gail Ross testified about the tariff impact in Washington, D.C. before the Federal Trade Commission, representing 10 small businesses while close to 300 large companies were heard.

“The trade war is hitting us harder than the big guys,” Swenson said. “We don’t have the ability to absorb the losses, or the deep pockets they have.”

Similarly, orders have stalled for the small factories in China that Krimson Klover uses for production.

The tariffs are “hurting smaller businesses in both countries,” Swenson noted.

“We hope for a resolution, but once taxes are in place, they do not just go away … We are expecting the worst in the long run,” said Ross.

Right after the tariff hikes started last summer, Ross and Swenson moved one small clothing line to Vietnam and looked into other manufacturers — for fear of the worst.

“We talked to Romania, to Portugal … but nobody can produce like China,” Ross said.

“In South America, when they say it will ship Tuesday that means Thursday, but in China, when they tell you when it will ship — they’re always on time,” Swenson added.

Chinese quality, they noted, is also unparallel.

“Look at the weave in this sweater,” Swenson told Xinhua, holding a tightly-knit black-and-white patterned sweatshirts that displayed tastefully in the company’s Boulder show room.

“The equipment to make this quality clothing just doesn’t exist in the U.S.,” said Ross, noting that other potential countries like Vietnam might take years to be able to equal the consistent high quality now coming from factories in China.

With the winter ski season fast approaching, Krimson Klover told Xinhua they would love to expand their sales into the vast Chinese market, but like many American businesses, they are in a “holding pattern” while trade negotiations continue.

“It’s the uncertainty of the tariff hikes that has caused problems,” noted Swenson, echoing a theme stated by national conservative economists that the on-again, off-again, percentage-changing taxes have wreaked havoc in markets.

This “uncertainty” is particularly troublesome for a business that sees time delays between orders being made, fulfilled and delivered.


Nota de Prensa VIP

Smart Reputation