RICHMOND, Va. — As the Trump administration continues to implement new tariffs, business owners across the nation report feeling the costly sting. One Richmond-area company has already raised prices.
Just one day before the November elections, Republican Senate candidate Hung Cao toured a Richmond-based factory, emphasizing the importance of lowering costs for manufacturers and creating more jobs.
"We bring in a lot of jobs; we have over 135 jobs here at Open Plan Systems," Cao said during his visit.
However, that vision appears distant for Dean Williams, managing partner for Open Plan Systems, a company that makes office furniture. Williams told reporters that the new and costly tariffs have created significant disruptions in the business landscape.
"We're feeling it right away. We raised our prices today based off last week's news," he said.
The sweeping tariffs imposed on suppliers globally by the Trump administration have had major implications for companies like Open Plan Systems. Previously, the company paid a 0 percent tariff on goods from Taiwan and Malaysia, but that has now surged to 32% and 24%, respectively.
"We had to institute changes to our policy, so we instituted a 7% surcharge to our customers, which we don't want to do but we don’t have a choice. Our tariffs in one year have gone up. Last year, we paid a million dollars in tariffs; this year it’s projected at $2 million in tariffs," Williams said.
During the COVID-19 pandemic, Williams noted that his company was able to absorb some of the increased costs. However, analysts say that this strategy has become unsustainable for many businesses.
"They run on thin margins, so they've got to stay afloat. They just can't absorb all that cost, so they have to push some of that forward to consumers," explained Jeff Smith, a professor of supply chain management at Virginia Commonwealth University.
Smith added that the impact of the tariffs would be felt immediately on perishable goods but will also extend to textiles and technology companies.
"I was reading this morning, the CEO of Nike said, 'We're not going to move our production back to the United States because that would mean we would have to raise costs significantly and we lose a lot of market share worldwide,'" Smith noted.
Williams acknowledged that while some manufacturing could be brought back to the U.S., he fears that the process could take years and cost millions. He emphasized that smaller companies like his help foster competition in the marketplace, keeping hundreds of jobs local.
He fears the threat of tariffs and a volatile market will only cause companies to fumble.
"You can't run a company or a business or a country with that type of mindset," Williams said.
Williams also pointed out that his company, like most manufacturers, orders supplies several months in advance. The inability to predict prices for months ahead has resulted in an environment of uncertainty for both employers and consumers.
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