A small business owner in Los Angeles is struggling to stay afloat due to the recent tariff hike on Chinese goods. Bobby Djavaheri, the owner of Yedi Houseware Appliances, sells small kitchen appliances made entirely in China. His warehouse has been receiving shipments with duty tax bills ranging from $9,000 to $21,000. Before the tariff increase, he would have paid a couple hundred dollars for similar shipments.
The significant jump in costs has left him worried about his livelihood. Djavaheri stated, "I’m racing against time trying to order products ahead of the holiday shopping season which starts next week."
Tariff Changes
President Trump imposed a 145% tariff on Chinese goods earlier this month before reducing it to 30%. The change took effect as part of an agreement between the United States and China over trade issues.
Djavaheri believes that people need to understand how difficult it is for low-margin businesses like himself when faced with significant increases in costs due to tariffs. He thinks that while increasing prices by upping margins may be possible, it might lead customers to look elsewhere for cheaper options once they become aware of price hikes through social media or other channels.
Rising Shipping Costs
Shipping prices have already tripled since January, according to Djavaheri. As a result, he is racing against time to order products ahead of the holiday shopping season.
Ryan Petersen, CEO of Flexport, explained the high demand for both foreign trade zone facilities and bonded warehouses located near ports and airports. These facilities allow companies to store their cargo and temporarily avoid tariffs until they leave the building.
Petersen noted, "The duties are a huge outlay of cash these businesses are facing. A lot of them are in a position where they don’t want to pay that right away. They’d rather leave goods here until the last minute when they need them."
This situation highlights the challenges small businesses face in navigating the complexities of international trade and tariffs.
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