Colorado small businesses praise pause on China tariffs, fears future

Gail Ross is pleased with the temporary pause on the 145% tariffs on goods from China, which has relieved some pressure on businesses like Krimson Klover, where she serves as the chief operating officer. Approximately half of the clothing sold by Krimson Klover is manufactured in China.

Ross is concerned about what will happen once the 90-day pause is over. If the Trump administration decides to reinstate all the tariffs announced on April 2, it would mean a 46% tariff on goods from Vietnam, where Krimson Klover shifted a third of its business after the initial tariffs were imposed during the president’s first term.

Prior to President Trump’s introduction of reciprocal tariffs, Krimson Klover, headquartered in Boulder, was facing a 7.5% tariff on imports from China.

In an effort to de-escalate the trade war, the U.S. and China have agreed to reduce tariffs on each other’s goods temporarily. The U.S. will cut the tariff on Chinese imports from 145% to 30%, while China will lower its tariff rate on U.S. goods from 125% to 10%. This reduction is in place while negotiations for a more permanent trade deal continue.

While Ross acknowledges the significance of the tariff reduction, Keaton Brown, who runs a windshield wiper business called The Windy Company with his brother, Kyler, considers a 30% tariff to be historically high. Nonetheless, they plan to take advantage of the lower tariff rate by increasing their orders during this period.

The Windy Company, which delivers windshield wipers made from 100% natural rubber and manufactured in China, ships its products nationwide from a warehouse in Grand Junction. Brown mentioned that they are postponing any expansion plans until there is more clarity on the future of tariffs.

Both Krimson Klover and The Windy Company are rushing to get their products shipped before the 90-day period ends to avoid higher taxes on imports.

While businesses are trying to navigate the uncertainty surrounding tariffs, Ross anticipates an increase in freight costs and challenges in getting goods out of China within the specified timeframe. The pause in higher tariffs has prompted companies to expedite their shipping processes.

As Krimson Klover grapples with these challenges, Ross emphasized the impact on small businesses in Colorado, particularly those reliant on imports from China. Despite the current cost increase, the company and its partners are absorbing the additional expenses.

Ross highlighted the difficulty small businesses face in aligning their budgets due to tariff fluctuations and expressed frustration over the lack of support from Congress. She believes that more assistance should be provided to companies affected by tariffs to promote domestic manufacturing.

Brown echoed similar sentiments, expressing concerns about the uncertainty surrounding tariffs and its potential negative effects on economic growth and productivity.

Both Krimson Klover and The Windy Company are adapting to the changing trade landscape, with a focus on managing costs and navigating the challenges posed by fluctuating tariffs.