Ruth Simon
Appearances
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
Even some companies that manufacture in the U.S. are feeling some softness because their customers are uncertain and they're not investing as much.
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
There are a whole bunch of different reasons why that's the case. For one thing, small businesses have thinner cash cushions and they often operate with narrower profit margins than big companies. They also are just smaller. They don't have big product and big diverse product lines. to spread things around. They're more likely to have production concentrated in one or two places.
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
And perhaps even as important or more important, their staffs are small, so they don't have teams of supply chain experts. And when somebody has to focus on tariffs, it's taking them away from other roles that they might have, other things that they need to do.
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
And that makes what we've been seeing lately, this stop-start, today it looks like one thing, another day it looks like something else, particularly difficult for small companies to manage.
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
There is a wide range of small businesses that are feeling pressure. One of the most obvious ones are companies that do a lot of importing from China and who have things like, I talked for this story, to a hat maker. There are people who make aprons, who make all sorts of stationary products, all kinds of different things.
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
But we also have companies that get components from China or components from Mexico or have moved some of their manufacturing to Mexico because they thought, hey, there are going to be more tariffs on China and suddenly Mexico is in the crosshairs too. Even some companies that manufacture in the U.S. are feeling some softness because their customers are uncertain and they're not investing as much.
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
Okay, that seems like kind of a tough situation for some of these small businesses.
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
So some of the small businesses that I talked to tried to move product to the U.S. ahead of the tariffs to at least give them a little bit of a cushion. They also have to figure out what to do. How much do you pass on tariffs to your customers? Do you put fewer items in a package? Do you make things a little differently? And finally, they're just taking a very close look at their costs.
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
If small businesses are suffering, that can lead to economic weakness, particularly if small businesses slow their hiring or have to lay off employees or they scale back their investments.
WSJ What’s News
Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
It was a pleasure to join you.
WSJ What’s News
Banks Warn of Risk to U.S. Economy Because of Tariffs
It's like every day they wake up and it's a new reality that they're trying to adjust to.
WSJ What’s News
Banks Warn of Risk to U.S. Economy Because of Tariffs
There are a whole bunch of reasons. They operate with smaller cash cushions. They typically have thinner profit margins. They're less diversified, both in terms of the goods they offer and where those products are made.
WSJ What’s News
Banks Warn of Risk to U.S. Economy Because of Tariffs
And they just don't have the economic muscle of big companies to try to push back hard and get their suppliers to accept some of those tariff increases to negotiate for better deals. They also have fewer people just to deal with all these issues. So for companies that have imports that are affected by these tariffs, what are they doing about it? They're scrambling.
WSJ What’s News
Banks Warn of Risk to U.S. Economy Because of Tariffs
Some of them will have to pass on price increases to their customers, but they're struggling to figure out what those tariffs are and what's going to stick and what isn't. And so it's hard for them to make any big moves. Some companies Small businesses I've talked to say their order volume has softened because the companies that are their customers are nervous about spending money.