"Provoking a trade war puts U.S. startups in an existential crisis because we can't afford the significantly increased costs." Pennsylvania start-up Cheryl Mossy is under pressure due to the U.S. government's continued tariffs on Chinese goods.
Mossy, a former office worker, often worries about carrying a few bags when she leaves the house — computer bags, handbags, lunch boxes and sometimes a plastic bag for shoes. She found that there were not a few office women who had the same problems as herself, so she came up with the idea of creating a multi-functional fashion women's bag.
In order to realize her entrepreneurial dream, Moxie participated in various training courses and seminars for small business owners over the course of two years. After the bag design was completed, Moxi's biggest problem was finding a production line. At first, Moxie was ready to produce this bag in the United States, but as soon as she touched the market, she hit a wall.
"At the time, I contacted several U.S. manufacturers recommended by the Department of Commerce to help small businesses. But after a few months, I found that the cost of producing in the United States was too high. As a startup, I couldn't afford it at all. "The samples I was given by the U.S. factory were made at between $1,200 and $2,800." For real mass production, labor costs alone will cost $98 to $108, and material and hardware costs will need to be calculated separately. ”
Moxi turned her attention to Chinese manufacturers. She quickly found the ideal supplier in Guangdong and helped her bring her multi-purpose bag to market at an advantageous price. In 2014, Moxie's brand "MinkeeBlue" was officially launched. "China's luggage manufacturers have helped me realize my entrepreneurial dream. Now, the bag I designed is already on sale in the United States, and the market feedback is not bad. I'm proud of what I've achieved before. Moxi told reporters.
However, due to the U.S. government's decision to impose large-scale tariffs on Chinese goods, Moxi's business is facing an existential crisis. "If i impose a 25 percent tariff, it will increase my import costs by almost 50 percent." As a start-up small business, the funds are already tight and cannot afford the cost increase at all. I had only two options – to pass on the upward pressure on costs to customers or to shut down the business. Passing on costs to customers is also risky, which is an unsustainable short-term behavior. Moss couldn't do anything about it.
Is it possible to find another supplier outside of China? Mossy did not hesitate to say that it was "absolutely impossible" to this question. She noted that finding another supplier takes a lot of time and effort, and that China has a large pool of skilled skilled workers. More than a month ago, Ms. Moxi drove three hours to Washington to attend a hearing held by the U.S. Trade Representative's office on tariffs on Chinese goods, with the aim of making policymakers listen. She stressed that "the DECISION of the US government to impose tariffs will deal a devastating blow to my business."
Since the U.S. government has provoked and escalated trade frictions everywhere, there are not a few American small and medium-sized business owners like Moxi who are in business difficulties. Most of these companies use global supply chains to reduce production costs and thus gain a foothold in the market. According to the Wall Street Journal, a survey of 923 U.S. small business owners earlier this year showed that more than a third of small business owners believe that the tariffs would hurt their business. According to the business website Business Insider, from Wisconsin to South Carolina, the U.S.-China trade dispute has led to a large number of U.S. small and medium-sized enterprises being forced to lay off employees. As the U.S. government continues to expand the types of tariffs imposed on Chinese goods exported to the United States, the interests of small and medium-sized enterprises in the United States may be further infringed.
(Editor-in-Charge: Wang Qingyu)
