Page 25 - ARUBA TODAY

BUSINESS Wednesday 2 May 2018
A25

How U.S. small businesses can navigate the trade wars

By CHRISTOPHER RUGABER posed tariffs on steel im-
The Trump administration ports in 2002. The auto
has so far avoided a trade companies now use their
fight with Europe by tem- purchasing power to nego-
porarily exempting it from tiate longer-term steel pric-
hefty steel and aluminum es that they then pass on to
tariffs. Yet the move also their suppliers.
extends the uncertainty David Arndt, President of
weighing on small business- Springfield, Ohio-based
es that use those materi- manufacturer Pentaflex,
als, a much broader group says he gets about 85 per-
than you might think. cent of his steel under con-
For example, Gary Cam- tracts with auto and truck
mack, the owner of Cam- makers. They typically reset
mack Ranch Supply in prices only once a quarter,
Union Center, South Da- so that gives him some pre-
kota, is worried that he will dictability and protection.
have to raise prices on steel He still has to buy about 15
barbed wire that he sells to percent of his steel on the
area ranchers, from $60.95 open market, where prices
a roll to as high as $67. have risen by as much as
And Erin Calvo-Bacci, 26 percent, Arndt said.
co-owner of chocolate — POLISH YOUR BRAND
maker CB Stuffers, based Associated Press When executives at Dr.
in Swampscott, Massachu- Bronner's heard from its
setts, is concerned that the about this." asked. "You don't just go on are part of larger supply Mexican distributors that
duties will ultimately lead to Many small companies the web." chains, getting multination- anti-American sentiment
higher prices for the steel may be more likely to get Dr. Bronner's works with a al companies to purchase might hurt sales of its prod-
tables, rolling racks and caught up in trade fights consultant to maintain at the necessary raw materi- ucts, they took an original
molds she buys. than they realize. Perhaps least two sources for every als can help weather trade approach. The company
Trump slapped 25 per- your firm doesn't import item it imports, said Benny disruptions. made a series of short vid-
cent duties on steel and raw materials or machin- Andrade, senior logistics That's what many auto eos emphasizing the Mexi-
10 percent on aluminum ery from China, but what manager at the soap com- makers did for their parts can roots of the majority
in March, citing excess im- about your suppliers? pany. It imports 80 percent suppliers after the George of its U.S. employees, An-
ports that have hurt U.S. The U.S. has published a list of the raw materials it uses, W. Bush administration im- drade said.q
metals manufacturers and of roughly 1,300 products including coconut oil, olive
national security concerns. that it has threatened to hit oil, and hemp oil, which it
Yet he excluded the Euro- with tariffs as part of a trade gets from Canada.
pean Union and six other dispute. The Trump admin- Calvo-Bacci, meanwhile,
countries, easing the blow istration argues that China has checked with her dis-
and leaving the tariffs im- forces U.S. companies to tributor to make sure they
posed on just 30 percent of turn over technology to ac- have enough inventory for
steel imports. On Monday cess China's market and her next equipment pur-
he extended the EU's ex- has proposed slapping du- chase. She is also looking
emption for another month. ties on $150 billion of Chi- into buying used equip-
The extension comes just as nese imports. China has re- ment instead.
U.S. officials travel to China sponded by threatening to — WORK WITH (BIGGER)
Thursday and Friday for levy duties on $50 billion of PARTNERS
talks on a separate trade U.S. goods. For small companies that
dispute. Benny Andrade, senior lo-
Amid all the uncertainty, gistics manager at Dr. Bron-
here are strategies small ner's, an organic soap com-
businesses can follow to pany, said that machinery
ease the blow of trade used to make plastic bot-
fights: tles was on the product list.
— BE INFORMED The company doesn't use
Many small businesses are the machine, but he wor-
simply unprepared for the ries that the provider of its
disruption that could stem plastic bottles does, which
from a trade war with Chi- could raise his costs.
na, said Stephan Galar- — LOOK FOR ALTERNATIVES
neau, vice president for Smaller companies may
small business at Livingston not have the staff to main-
International, a consulting tain global supplier net-
firm. That's also true for oth- works, but they can still
er trade disputes, such as explore alternatives, Galar-
President Trump's threats to neau said. In many Asian
withdraw from NAFTA. markets, business relation-
"They're not ready for ships take time to cultivate.
a worst case scenario," "Do you know how long it
Galarneau said. "You want takes to find a new, secure
to avoid being passive provider in Vietnam?" he