Boulder-based businesses whose products are manufactured in China are getting hurt, like other American importers and exporters, by the ongoing U.S.-China tariff war.
“We are surviving. But it’s huge distraction. We can’t plan for innovation, development, or hire new employees,” said Kay Martin, CEO and founder of BOCO Gear, which primarily makes baseball hats for events and other brands, and for retail sales as well.
Since last year, import duty on baseball hats has gone from 6.7% to 36.7% percent, she said. “We were hit by a 10% hike in September 2018, a 15% hike in May, and we are bracing for a 5% hike in October,” Martin said.
Eventually, businesses will pass-on the increased costs to customers, she said, adding she supports the Boulder-based Outdoor Industry Association‘s efforts to drum up support against President Donald Trump’s tariffs. Tariffs are hurting Americans and American jobs, Martin said.
Association members were in Washington, D.C., Thursday to urge Congress to help resolve the U.S.-China trade war. Outdoor recreation equipment including backpacks, camp chairs, leather ski gloves, kayaks and bicycles are saddled with the 25% punitive tariffs, causing the average tariff rate on outdoor equipment to more than double compared to the previous year, according to an Outdoor Industry Association news release.
America’s outdoor recreation businesses have paid $1.8 billion more in tariffs over the last 11 months, Amy Roberts, executive director of the association, which has more than 1,300 members, said during a media call. “We need Congress to step in and take action.”
Tariffs are a direct threat to the $787 billion outdoor recreation economy, she said.
Small brands don’t have diversified supply chains, and they face greater threats to their existence, Roberts said.
Patricia Rojas-Ungar, the association’s vice president of government affairs, said Congress needs to hold hearings on the impact of tariffs on American businesses and families.
Gail Ross, chief operating officer at Boulder’s Krimson Klover, a outdoor fashion collection for women, testified in June against the tariffs at the U.S. Trade Commission. Her company has been able to mitigate some impacts by getting its fall line before September.
Businesses will be hit hard when future shipments come in, she said.
A majority of Krimson Klover’s business is wholesale. “We can’t raise our prices after customers place their orders,” Ross said.
Krimson Klover is looking at production locations outside of China, “but it typically is a two-year process,” she said.
For smaller company like BOCO Gear, which has 20 employees, it is difficult to find new suppliers, Martin said. Bigger companies already have moved in where labor and factories are available, she said. “There’s no labor left in Vietnam,” she said.
Bigger companies even have booked freight capacity to ship goods to the U.S., she said.