Tariffs have ruined American businessmen’s business, they are on the verge of bankruptcy

New Delhi. The biggest shopping season of the year has started in America. People do a lot of shopping on Black Friday, Christmas and New Year. On this occasion, retailers keep expecting profits for the whole year. But this time there is restlessness instead of excitement. And the reason for this uneasiness is Donald Trump’s tariffs. Constantly changing duties on imports from China have made the condition of small traders such that they are neither able to order goods properly nor are they able to complete their stock. They do not have all the goods to sell in this shopping season.

America’s small shopkeepers earn about one-third of their annual income in November and December. But this time the situation is opposite. Buyers are ready but shopkeepers have no goods to sell. Black Friday has come, but the warehouses are empty. Due to this roller-coaster speed in tariffs, small traders are not able to move in any direction. Planning is most important for any business. But when the rules change every few weeks, it takes so much time to take a decision that orders keep getting pushed back, and the stock becomes vacant.

36% small companies may go bankrupt

According to RapidRatings, operating margins of companies with assets less than $50 million have fallen to -20.7%. 36% of small companies are at risk of bankruptcy, which is three times higher than large retailers (12%). This shows that the impact of tariffs is breaking the backs of small traders the most. Due to rising costs and uncertainty, many small retailers were forced to order large quantities of goods in advance. But this gave rise to another fear that if the goods were not sold, the entire money would be lost. Many small shopkeepers have started laying off employees due to rising costs and many have even reduced their product lines.

supply chain exhausted

Matt Hassett, founder of New York-based sleep-wellness company Loftie, is being hit the hardest right now. His company imports sunrise lamps and phone-free alarm clocks from China. But Trump’s tariff policies have destroyed their supply chain. Hassett says that due to tariffs, stocks have fallen so low that only 10% of the required inventory is left. Just before the biggest shopping season of the year, such a situation means huge losses.
After the threat of tariffs reaching 180%, Hassett also made a plan to shift production to Thailand, but before taking a decision, Trump again changed the rate to 20%. And the changed decision again proved costly because Thai factories were 20% more expensive. That means whether you go there or stay here, loss is certain.

atmosphere of uncertainty

Derek Lo, CEO of Brooklyn-based online travel bag company Lo & Sons, says that the tariffs not only increased our costs, but the uncertainty also prevented us from placing orders on time. Now the situation is that their warehouses do not have even half of what they should have. Between April and June, the company explored options in factories in India, Cambodia and many other places, but every time the tariff change put them in a dilemma.

Less impact on big companies

Big retailers like Walmart and Costco were almost unaffected by these shocks. Because they have capital, resources and such large orders that they make deals in bulk and have a strong hold on the supply chain. But small traders are not able to manage all this.