What the U.S. - China tariff pause means for Bay Area businesses
What the U.S. - China tariff pause means for Bay Area businesses
Small business merchants, who rely on Chinese goods, were joyous to learn that they get a three-month reprieve from financial devastation. But at the same time, some business owners feel the joy will be short lived, with uncertainty in their near future.
OAKLAND, Calif. - Small business merchants, who rely on Chinese goods, were joyous to learn that they got a three-month reprieve from financial devastation.
What we know:
U.S. and Chinese officials announced on Monday that a deal was reached to slash most of their recent tariffs and that the countries would implement a 90-day pause in their trade war.
Reliance on Chinese goods
If it weren't for Chinese goods, you could run this big hardware store, lock, stock and barrel, out of a minivan.
Markus Supply Ace Hardware has been serving Oakland for 100 years, 70 of those in their current location near Jack London Square.
The tariffs have been a major danger simply because of the sheer number of products they have, called SKUs (stock keeping unit), from China and the percentage of the inventory that represents.
"Total SKUs I couldn't tell you; over 60,000 maybe," said Brian Altwarg of Markus Ace Hardware. "Probably 80% to 90% comes from China," said Brian’s father Dan Altwarg.
Goals
The goal – to keep the loyal and new customers if tariffs return.
"You know, the plan is, if we gotta raise, it's gonna be as little, as light as possible’" said Dan Altwarg. " You know, the plan is, if we gotta raise, it's gonna be as little, as light as possible," said Brian Altwarg.
Toy prices and tariffs
Alameda's Toy Safari has been a fixture here for 34 years, always under the ownership of Helen Dean. She sells new, vintage, and even lightly-worn toys.
But the overwhelming majority of the toys are new and come from China.
A lot of parents and grandparents will be grateful that they can afford maybe one or two dolls for their kids; not the 30 of so that the president suggested was the norm.
No matter what, whole prices are already up.
"Prices are going up, effective May 1st and even back orders that were ordered previous to May 1st would see a higher price," said Dean.
She worries what if the big tariffs return in August.
"We're already struggling. We have a lot of competition with the big box stores," said Dean.
Uncertainty continues
Nancy Law owns four stores in San Francisco's Chinatown, three highly reliant on goods from China.
One container, ordered well before the 145% tariff was imposed, arrived last week, just days before the tariffs were temporarily lifted.
Her broker told her she's probably stuck with it.
"No, no, no. We already paid all the tariffs last week," said Dean.
She will use the 90 days to beat any new tariffs.
"We will try to ship out our stuff probably before July. So that is our plan," said Law. "I feel like a yoyo. I feel like they're playing with me, I don't know whether to order one case of dolls, two cases of dolls or 30 cases of dolls. I have no idea," said Dean.
Tensions will continue since negotiators have until mid-July.
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US-China trade deal: Countries agree to slash tariffs, enact 90-day pause
U.S. and Chinese officials say they have reached a deal to slash most of their recent tariffs and called for a 90-day pause for ongoing negotiations. Here's what to know.