In 2017, Christina and Ian Lacey decided to take a chance and leave their stable careers to turn their hobby into a small business. The risk and hard work paid off. The Denver couple started Retuned Jewelry from their home and have seen impressive returns — averaging $360,000 in annual sales, most of which stemmed from frequenting music and art festivals. Christina, a former dental assistant, and Ian, who previously worked in information technology, handcraft donated guitar and bass strings into earrings, necklaces and bracelets. “We’ve worked 24/7 on this,” Christina told CNN. “This is our baby. We’ve pushed through burnout just to keep it alive.” But all the hard work may fall to the wayside due to President Donald Trump’s 145% tariffs on Chinese imports, which accounted for nearly $440 billion in goods to the United States in 2024. While businesses of all sizes are impacted by tariffs, smaller operations — like Retuned Jewelry — are more exposed, according to John Arensmeyer, founder and CEO of Small Business Majority, an advocacy group that represents a network of 85,000 small businesses. He said small businesses will have to raise prices, cut staff, delay growth plans or shut down entirely just to keep up with the rising costs of imports they can’t source domestically. “Small businesses have thinner margins and less leverage to negotiate with suppliers,” Arensmeyer told CNN. While the Laceys rely on free strings that otherwise would end up in landfills, the other materials they rely on — beads, chains, clasps and hooks — come from China. Ian said they’ve tried sourcing materials domestically, but those products simply aren’t made in the United States. “We’ve looked,” he said. “There’s no facility here that makes what we need.” The Laceys have already raised prices on their products ahead of the tariffs. Arensmeyer said small businesses usually don’t have the cash reserves to ride out unexpected price hikes. He said the tariffs amount to a crisis for small businesses, one where “they don’t have much control.” For the Mitchell Group — a second-generation, family-owned textile company based in Niles, Illinois — the lack of cash reserves could have serious effects during production hiccups or other problems. “Because of our business model, tariffs have put a serious strain on our cash flow,” said Ann Brunett, the company’s chief operating officer. “We typically keep goods on hand. So, I’m paying a 45% tariff — plus duty — to bring in products that might sit on a shelf until our distributors need them. That ties up our cash.” The Mitchell Group employs 18 full-time staff and 12 sales representatives, and generates just under $10 million in annual revenue, according to its president, Bill Fisch. Brunett said the company will do “everything we can” to avoid shutting down. She said that the business “means everything to us” and that the company wants to avoid laying off their staff. Fisch has explored Vietnam, India, Malaysia and even Europe as production alternatives. “No one has the infrastructure China does,” he said. “We need our coated fabrics produced under one roof and to our exacting standards. You can’t make one part in Vietnam, another in India and assemble in Thailand. It doesn’t work.” Tariffs likely won’t return textile production to US While Trump has touted tariffs as a way used to bolster domestic manufacturing, Arensmeyer said an increase in US production could take a long time to come into fruition. “You can’t fix that overnight,” Arensmeyer said. “You can’t just say, ‘Oh, we’re going to have a tariff, and now people are going to buy domestically,’ when we don’t have those products being made domestically.” The textile and apparel industry has steadily declined in the United States over the past several decades, largely due to the rise of cheaper overseas production and globalization, according to Sheng Lu, a professor at the University of Delaware’s Department of Fashion and Apparel Studies. Fisch said key materials the Mitchell Group uses, like specialized vinyl polymers and textiles, are virtually nonexistent in the United States. China is the world’s largest textile producer, manufacturing everything from cotton and silk to synthetic fibers and vinyl polymers. He added that he isn’t able to find enough workers to staff a fabric factory in Mississippi. “The textile business for our kind of product? It’s gone here,” Fisch said.
How Trump’s 145% China tariffs could crush American small businesses: ‘There’s no facility here that makes what we need’
TruthLens AI Suggested Headline:
"Small Businesses Face Severe Challenges from Proposed 145% Tariffs on Chinese Imports"
CNN
7.2
TruthLens AI Summary
In 2017, Christina and Ian Lacey took a leap of faith by transforming their hobby into a small business, launching Retuned Jewelry from their home in Denver. Their handcrafted jewelry, made from donated guitar and bass strings, has garnered impressive sales, averaging $360,000 annually, primarily through music and art festivals. However, their success is now threatened by President Donald Trump’s proposed 145% tariffs on Chinese imports, which could significantly increase their costs. Small businesses like Retuned Jewelry are particularly vulnerable to such tariffs due to their thin profit margins and limited negotiating power with suppliers. The Laceys have already begun raising their prices in anticipation of the tariffs, but they are faced with the harsh reality that essential materials like beads, chains, and clasps are predominantly sourced from China, as they are not manufactured domestically. Ian Lacey expressed frustration over the lack of local facilities capable of producing the materials they need, emphasizing the challenges small businesses face in the current economic landscape.
The impact of these tariffs extends beyond the Laceys, affecting various small businesses across the country. For instance, the Mitchell Group, a family-owned textile company in Illinois, is experiencing severe cash flow strains due to the tariffs, which impose high costs on imported goods that may not sell immediately. Ann Brunett, the company's COO, highlighted the challenges of managing cash flow while dealing with increased expenses. The Mitchell Group, which generates nearly $10 million in annual revenue, is exploring production alternatives in countries like Vietnam and India, but Bill Fisch, the company president, noted that the infrastructure and capabilities available in China are unmatched. The textile industry in the U.S. has been in decline for decades, and experts like John Arensmeyer warn that boosting domestic production in response to tariffs will take considerable time and effort. The collapse of the textile business in the U.S. means that many small firms are left with few options, leading to concerns about layoffs and even closures as they struggle to navigate this challenging economic environment.
TruthLens AI Analysis
The article sheds light on the impact of President Trump's proposed 145% tariffs on Chinese imports, particularly focusing on the struggles faced by small businesses such as Retuned Jewelry. The narrative illustrates the challenges that small enterprises encounter in the face of rising import costs, emphasizing the vulnerability of small businesses compared to larger corporations.
Economic Implications for Small Businesses
The piece highlights the potential economic devastation that such tariffs could impose on small businesses. As John Arensmeyer points out, smaller operations typically have thinner profit margins and less negotiating power with suppliers. This situation forces them to make tough decisions, including raising prices, reducing staff, or even closing their doors. The Laceys’ experience illustrates this concern, as they struggle to find affordable, domestically-sourced materials and have already begun raising prices.
Perception Management
The article aims to foster empathy for small business owners who may be adversely affected by these tariffs. By sharing the Laceys' personal story, the report seeks to humanize the broader economic issue and generate a sense of urgency among readers to consider the ramifications of such policies. This narrative could be perceived as an attempt to sway public opinion against the tariffs by showcasing their direct impact on hardworking entrepreneurs.
Hidden Narratives
While the article focuses on the immediate effects of tariffs on small businesses, it may also obscure the broader context of trade relations and the potential long-term economic strategies that could arise from these tariffs. The emphasis on individual stories may distract from more extensive discussions about the geopolitical implications of U.S.-China trade relations.
Trustworthiness of the News
The article appears to be grounded in factual reporting, utilizing quotes from experts and personal stories from small business owners. However, the framing of the issue does present a specific viewpoint that emphasizes the negative consequences of tariffs without equally discussing any potential benefits, which could indicate a bias. Overall, the news seems reliable but may lack a balanced perspective on the topic.
Societal and Economic Effects
The potential outcomes of this situation could include widespread closures of small businesses, increased unemployment, and further economic disparity. These tariffs could also lead to a ripple effect in the economy, impacting consumer prices and access to goods. In the political landscape, such consequences may lead to public outcry against the administration's trade policies and influence future elections.
Target Audience
The article is likely to resonate more with small business owners, entrepreneurs, and individuals in the creative industries. It aims to connect with readers who empathize with the struggles of small enterprises and could potentially advocate for policy changes that support them.
Market Reactions
The implications for the stock market could be significant, particularly for companies reliant on Chinese imports. Businesses in retail, manufacturing, and consumer goods may face stock price volatility as investors react to the potential for increased costs and reduced earnings.
Geopolitical Context
This article ties into ongoing discussions about U.S.-China relations and the broader economic landscape, especially as tensions around trade continue to escalate. The tariffs are a reflection of a larger strategy and could influence future negotiations or economic agreements.
The content appears to be driven primarily by human reporting, though it is possible that AI tools were used for data analysis or to compile statistics. However, the narrative style suggests a human touch, especially in the storytelling aspect.
In conclusion, while the article provides valuable insight into the struggles of small businesses under the proposed tariffs, it may also serve a specific agenda by emphasizing negative outcomes without exploring the full breadth of the issue. The reliability of the news is relatively high, but it may benefit from a more balanced representation of the tariffs' implications.