The tariffs are here.
And by all accounts, they’re going to stay for quite a while.
Mr. Trump announced tariffs on all steel and aluminium imports including allies Canada, Mexico and the EU, prompting outrage from the countries’ leaders. He’s also threatening to slap tariffs on products from China, citing an unfair trade deficit as his reason for doing so.
Most recently, Mr. Trump has proposed auto-export tariffs on Canada. Senior government officials in Canada are planning retaliation measures if the plans go through, including imposing their own tariffs once again.
Trump has claimed his efforts are meant to revive the US manufacturing industry. Whether or not this will happen remains to be seen. But until we see what the tariffs will do for entire American economy, small businesses in the US will have to bear the brunt of the trade war currently being waged.
For businesses that import steel and aluminium for manufacturing, their costs are expected to increase by 10% on aluminum and 25% on steel.
Small businesses are wringing their hands over the murky situation. For businesses that import steel and aluminium for manufacturing, their costs are expected to increase by 10% on aluminum and 25% on steel. Business who export goods to countries embroiled in the trade war are also expected to face some setback as counter-tariffs are being attached to products ranging from wine to soybeans and animal products.
If you’re involved in any business from farming to building and food production, you’re likely to be affected by the economic uncertainty as certain products are already being sold at higher prices in anticipation of the next round of tariffs.
While this is a challenging time, it can be overcome with the good amount of planning.
Find Other Export Options
It’s true that this isn’t the perfect solution to trading your products. But instead of anxiously anticipating the impending retaliatory tariffs, you should find other locations where you can temporarily send your products.
Consider smaller countries with similar ways of doing business and start the process of creating relationships with wholesalers and distributors there
Setting up export routes isn’t easy. But having a backup location will save you a lot of sleepless nights if these countries decide that your products will, in fact, have higher taxes slapped on them.
Consider smaller countries with similar ways of doing business and start the process of creating relationships with wholesalers and distributors there. Even if the trade war is called off before you start exporting, this proactiveness could mean you’ll have another place to send your goods later.
Find Other Import Options or Buy From Home
Similarly, you should consider finding other import options to avoid paying exorbitant costs for the products you need for your business. While all steel and aluminum imports are being affected, regardless of the source, the prices of some products may rival those you’re used to, depending on which country they’re coming from.
Alternatively, you can find a steel or aluminum producer in America to provide you with the essential metals. The prices will likely be much higher than what you’re used to but it can keep your company in business while you try to find other options or wait for the trade war to die down.
It’s a tough decision but increasing prices can ensure you keep making the quality products your customers are used to. With panic spreading over the tariffs, it’s likely other small businesses will be doing the same to stay afloat as well.
If you’re unwilling to compromise on your production process and are unwilling to increase costs, you’ll have to come to terms with a lower profit margin
If you’re unwilling to compromise on your production process and are unwilling to increase costs, you’ll have to come to terms with a lower profit margin that you’d originally planned for.
Likewise, if you’re exporting your products to countries with retaliatory tariffs, reducing your prices will help you retain the customers in those countries at least for a while.
Outsourcing your manufacturing and distribution to a country you already sell your products in will save you a lot of stress and can prove to be long-lasting solution to cutting costs.
When finding a company to outsource your production to, it’s likely you, as a business owner, will have to visit the location and meet with the people who will be manufacturing and distributing your products.
But a few plane tickets will likely be far cheaper than steep taxes that could prevent people from buying your goods.
If you’re unsure as to where you can find manufacturers and distributors, consult this article for a preliminary list.
Setting up outsourcing, exporting and importing routes is certainly a long process involving fees and paperwork. A major part of this involves setting up payment systems between yourself and business partners. Bank wires, the traditional method of sending money, hurts small businesses as much as these tariffs do.
They’re slow and unreliable and these banks charge quite to bit to send and receive payments.
Veem is a multirail payments platform for small businesses. With a presence in over 80 countries, you can safely send money any country marked for your business’ imports or exports.
Veem sends payments at a fraction of time of banks and charges no wire fees. On top of all this, you’re also provided with a personal dashboard so you can accurately track your payments.
Sign up for an account with Veem today and keep your business from stagnating.