Anne spoke with Inc. about the $18 billion tariff hike on Chinese goods announced in May 2024 by the Biden Administration. Brief excerpts from the article are included below and the entire article by Melissa Angell can be found in Inc.
Biden slaps China with an $18 billion tariff hike. But will it punish small-business supply chains? | Melissa Angell
The Biden administration is smacking China with an $18 billion tariff increase to protect industry segments such as electric cars and solar energy. But those tariffs could also shock supply chains for small American companies, raising their cost of doing business.
President Biden announced the suite of tariff increases on Tuesday, which include quadrupling tariffs on imported electric vehicles, tripling tariffs on steel and aluminum items, and doubling tariffs on semiconductors....
...And if your company is sourcing from China in one of the sectors affected by the tariff hikes, it will increase the cost of doing business--at least temporarily. That can leave businesses with the prospect of passing rising costs on to customers in the form of higher prices, if they can.
But that might not be the long-term case, according to Anne Clawson, a principal at Cascade Advisory, a Washington D.C.-based consulting firm. This isn't China's first trade rodeo--and Chinese companies are apt at side-stepping tariff hikes, she says.
"What we've seen to date is that Chinese firms are evading the tariffs by setting up manufacturing outside of China to send goods to the U.S. In the medium to long term, Chinese companies can probably evade most of these tariffs by moving their production outside of China," Clawson says.
....The administration's hope is that the tariff hikes could end up being good news for entrepreneurs, even if they may face some snags in their supply chains and be forced to look elsewhere.
"This potentially opens more space for innovators to advance U.S. technology, which is lagging behind Chinese tech in some of these spaces," Clawson says. Any advancements made by a small business or entrepreneur would probably need large-scale investment to scale in the future, but the opportunity is there."
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