Every Action Comes With a Cost: A Look at Trump's Tariffs on China and a MN Baby Goods Company

The Trump administration has been making big moves on international trade, wielding tariffs pretty freely as a tool to bring other nations to the bargaining table. And, for the most part, it's working, with a major holdout being China. While plenty of people - this writer included - are cautiously optimistic that all this will work in the end, we shouldn't forget that there is always a cost. Some American businesses rely on China as the base of their supply chain, having products built in China and sent to the United States, and now some of those businesses are finding themselves in an untenable position.

Take, for instance, the Minnesota company, a small business called Busy Baby. Granted, this interview is on CNN - hardly a Republican-friendly outlet- and is hosted by Kate Bolduan, hardly a Republican-friendly commenter, but Busy Baby CEO Beth Benike presents an interesting scenario of a small business that relied - perhaps too much - on China.

Kate Bolduan: What we're hearing from the administration is a celebration of the president's moves here. First, the tariffs, and now describing the pause as a stroke of strategic economic genius. We've seen investors seem to be breathing a sigh of relief. Are you breathing a sigh of relief?
Beth Benike: I have products in China right now produced ready to ship. They were supposed to get on a boat yesterday and come to America. And I can't ship them because what would have cost me maybe $30,000 with a reasonable tariff now is going to cost me almost $200,000. And I have to have that money. when the products get to customs. And I don't have that, nothing close to that. It's not even reasonable. So I have to leave my goods in China until I figure out some other direction. But what that means is when I run out of stock in two to three months, I no longer have products to sell and no more revenue coming in, which means I can't pay my bills, can't pay my employees. And everything I have, all of my debt, I have my house leveraged. We have five employees. My house is leveraged against our loans for our growth into Walmart and Target. I can't pay those bills. I don't even want to think about it. And it's hard to make a decision. You know, we had an idea yesterday after the announcement of, well, maybe we can export to Australia, repackage the products and then re-import them from there. But because policy changes every 36 hours or so, I don't want to make that decision and make that move only for something else to change in just a couple more days. I'm paralyzed. I can't even make a decision right now. And I'm not the only one. There's thousands of us small businesses in this exact same position.

There is an economic phenomenon called "creative destruction," wherein a business model, while giving way to a newer model, causes some economic pain to the people invested in the older way of doing things. It sounds a little callous to say so, but there's that old saying: "For omelets, you break eggs." But the Trump administration can't back down from trying to set our entire national balance of trade to rights for the sake of the small businesses who have invested in a supply chain starting in China.

Now, here's what we can hope happens: Maybe the CNN coverage - maybe even this RedState coverage - will bring Busy Baby's plight to the attention of someone who can help. Someone with a suitable facility or someone willing to purchase the business and bring manufacturing back on-shore.

Trump Makes Big Tariff Move on China Overnight, Signals Where Things May Be Headed

It's unclear what might happen with Busy Baby's Australia dodge, but that's what that is - a dodge. To stay tenable, companies like Busy Baby will have to readjust to find a way to build their products here or to sell the product line. That's inevitable in any time, like now, where trade policies are changing dramatically. It's unfortunate for the small businesses involved, but we can't make policy exceptions for every small business, or else the entire point of this exercise will be for naught. Yes, we should sympathize with their plight, but we can't change course. Not now.

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