Tariffs are having an effect all over Corporate America.
Companies such as Ford, Harley Davidson, Whirlpool, and Walmart have warned of pending layoffs and/or price increases due to the higher costs to buy steel and aluminum or products from Chinese suppliers, reflecting the ongoing trade dispute between the two countries. And while U.S. Commerce Chief Wilbur Ross says that "nobody's going to actually notice it at the end of the day," many economists believe otherwise.
But what about small businesses? Are we as concerned about the President's trade policies? Apparently not. In fact, most support them.
That's according to the annual 2018 Buyer-Seller Confidence Index, a study of more than 2,000 entrepreneurs that was recently released by business marketplace provider BizBuySell. The study found that three out of four business owners are in favor of U.S. trade tariffs.
Of course, there are plenty of small businesses that do suffer from being in the middle of the growing trade war.
Those are the ones providing products and services to companies in industries like the ones mentioned above that are on the wrong end of tariff policies. Wholesalers that purchase much of their inventory from China, manufacturers that include Chinese materials in their products — particularly steel and aluminum — as well as small farmers and assembly-makers of specialty products are also feeling the pain.
In Pennsylvania, tariffs are adding costs and uncertainty. "Business will go down," Steve McGowan, a vice president at frame and wall decor supplier MCS Industries said at a town-hall meeting organized by retailers and agricultural companies last week in Philadelphia. "So we've put expansion of our Easton distribution center on hold and it could be going away."
But for most of the small business owners I know, the tariffs aren't such a big deal. In fact, 60 percent of the respondents to the BizBuySell survey said that the tariffs would have "no impact" on their business and half of the approximately one third of business owners who admitted that tariffs could negatively impact their business still supported the President's trade policies. An August survey of 300 business owners by investment firm UBS Warburg also found that 71 percent approved of tariffs on China.
Why such indifference? Most small businesses are too far down the food chain to feel an impact. And those that have bought and sold products in China weren't exactly thrilled with the experience and I get that. They — like many of my clients — feel that something needs to be done about what they view as an imbalanced trade relationship between the U.S. and China that's been going on for too long. 88 percent of the respondents in the UBS Warburg survey felt that China engages in unfair trade practices.
"Although these tariffs will have a negative impact on our business now, I do feel strongly that we have been taking a weak position on trade to avoid this issue and kicked the can down the road for decades," one business owner said in the BizBuySell report. "This is very tough to go through but it will be better in the long run."