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Say Main Street Businesses will be Hard Hit

As President Trump’s actions and tweets open the gates to a trade war, Democrats of the House Committee on Small Business warned today of the dramatic impacts that Trump’s trade policies will have on America’s Main Street businesses. 

“The unpredictable and ad hoc nature of President Trump’s tariff announcements are raising concerns about how these changes and threats of other changes, might harm entrepreneurs,” said Rep. Alma Adams (D-NC), the Vice Ranking Member of the Committee. “Instead of creating a thoughtful plan to address some of harmful effects trade agreements have had on our economy and middle-class, the Trump Administration has launched a retaliatory attack after retaliatory attack that brings our country perilously close to an international trade war.”

In March, President Trump announced that he would impose import tariffs of 25 percent on steel and 10 percent for aluminum, two products that many small firms rely upon. In response to Trump’s announcement, China has announced retaliatory measures and has filed a trade case with the World Trade Organization (WTO). The President’s tariff announcement has also drawn criticism from small business advocacy groups such as the National Small Business Association. At today’s hearing, Ken Couch, the Director of Product Management at a small electronic manufacturing solutions company in Virginia expressed his concerns about new tariffs.

“While our products are manufactured in Virginia and do not contain large amounts of steel or aluminum, many of our electrical components are sourced from China and other parts of Asia,” said Couch. “If import tariffs are placed on these electrical components, this will increase the cost of our products and potentially impact our ability to compete in a global market.”

Putting aside recent developments, small businesses already face significant challenges when attempting to enter foreign markets.  In the hearing, Democrats stressed the importance of not only helping small businesses who are already in the exporting market, but creating opportunities for more firms to enter the global market.

Despite the fact that small and medium-sized businesses comprised 97 percent of American exporting companies in 2014, these businesses accounted for just 33 percent of the value of exports. To increase small business exporting, the Small Business Export Promotion Grant Program run by the Small Business Administration (SBA) seeks to break down barriers to trade. During the hearing, Democrats highlighted the importance of strengthening the program and similar initiatives.

Finally, as President Trump seeks to renegotiate major multi-lateral trade agreements such as the North American Free Trade Agreement (NAFTA), Democrats are holding him accountable to America’s small firms.

“Rapid, ill-conceived changes to trade agreements could result in small business supply-chain disruptions, price increases and costs shifted to consumers,” said Adams. “Equally important, is the President’s economic rhetoric and saber rattling.  Trade wars initiated by Tweet certainly cannot be beneficial to small firms – whether they rely on imports for products made domestically -- or if they are hoping to expand their international footprint.”

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