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
7.0
TruthLens AI Summary
In 2017, Christina and Ian Lacey transitioned from stable careers to entrepreneurship, founding Retuned Jewelry, a small business specializing in handcrafted jewelry made from repurposed guitar and bass strings. Their venture has achieved about $360,000 in annual sales, largely driven by participation in music and art festivals. However, the couple faces significant challenges due to President Trump's proposed 145% tariffs on Chinese imports, which could severely affect small businesses like theirs. John Arensmeyer, CEO of Small Business Majority, highlights that smaller enterprises are particularly vulnerable due to their limited cash reserves and thinner profit margins. As a result, small businesses may be forced to raise prices, cut staff, or even cease operations to manage the increased costs of goods that often cannot be sourced domestically. The Laceys have already adjusted their prices in anticipation of the tariffs, but they struggle to find alternative domestic suppliers for essential materials like beads and clasps, which are predominantly manufactured in China.
The impact of these tariffs extends beyond the Laceys, affecting other small businesses such as the Mitchell Group, a textile company in Illinois. Ann Brunett, the company's COO, noted that the tariffs are straining their cash flow since they often pay substantial tariffs on products that may remain unsold for extended periods. The company generates nearly $10 million in annual revenue and employs 30 staff members, but it is exploring production alternatives in countries like Vietnam and India, which lack the infrastructure and capabilities of China. Despite the administration's claims that tariffs will revitalize domestic manufacturing, experts like Sheng Lu from the University of Delaware argue that rebuilding the U.S. textile industry will be a long and complex process, given the significant decline in domestic production over the decades. The current situation highlights the challenges faced by small businesses in adapting to sudden economic shifts, especially when the necessary materials and infrastructure are not available within the United States.
TruthLens AI Analysis
The article highlights the significant impact that President Trump's proposed 145% tariffs on Chinese imports may have on small businesses in the United States, with a particular focus on a small jewelry business, Retuned Jewelry, owned by Christina and Ian Lacey. This situation raises broader concerns about the viability of small enterprises in the face of rising import costs and limited domestic production options.
Implications for Small Businesses
The article illustrates how small businesses like Retuned Jewelry are disproportionately affected by tariffs, which could force them to increase prices, reduce staff, or even close down. John Arensmeyer’s comments underscore the precarious financial situations many small businesses find themselves in, making them particularly vulnerable to external economic pressures.
Challenges in Sourcing Materials
The Laceys’ struggle to source materials domestically highlights a critical issue: the lack of local production capabilities for certain goods. This inability to find alternatives within the U.S. adds urgency to their situation, as they depend heavily on imported materials to create their products. The article emphasizes that despite their efforts, they have found no viable domestic suppliers, which poses a significant challenge.
Economic and Public Perception
The article may aim to foster a sense of urgency and empathy among the public regarding the potential fallout from the tariffs on small businesses. By showcasing the personal stories of entrepreneurs like the Laceys, it seeks to humanize the economic data and make the consequences of trade policies more relatable. The narrative could lead readers to question the broader implications of such tariffs on not just small businesses, but the economy as a whole.
Hidden Narratives and Broader Context
There might be underlying themes that the article does not fully explore, such as potential political motivations behind the tariffs or the broader trade relations between the U.S. and China. The focus on the Laceys may serve to distract from larger systemic issues in global trade dynamics and domestic manufacturing policies.
Trustworthiness and Manipulative Elements
Evaluating the reliability of the article, it appears to be grounded in real experiences and expert opinions. However, the emotional appeal could be seen as a manipulative tactic to sway public opinion against tariffs. The choice of language, focusing on personal struggles and the potential disaster for small businesses, may amplify the urgency of the message without addressing potential counterarguments or the broader economic context.
Impact on Communities and Markets
The implications of such tariffs could lead to a ripple effect throughout various sectors, potentially leading to higher consumer prices and reduced economic growth. Communities that rely on small businesses for employment and economic activity may face significant challenges. Additionally, this news could influence market perceptions, particularly for industries reliant on Chinese imports.
Target Audience
This article seems tailored to resonate with small business owners, entrepreneurs, and consumers who are concerned about the economic implications of tariffs. It may particularly appeal to those who value local businesses and are worried about the survival of small enterprises in a challenging economic landscape.
Market Influence
In the context of the stock market, companies that rely heavily on imported goods or materials might experience volatility in their stock prices. Investors may react to the potential for increased costs and reduced profitability in sectors affected by tariffs, particularly in manufacturing and retail.
Geopolitical Considerations
This article indirectly touches upon the geopolitical landscape, highlighting the economic tensions between the U.S. and China. As trade policies evolve, the implications of tariffs may play a crucial role in shaping future diplomatic and economic relations.
AI Involvement
It's plausible that AI tools could have assisted in drafting or editing the article, particularly in streamlining language or structuring the narrative. However, without explicit evidence of AI involvement, it's difficult to ascertain specific influences.
In conclusion, while the article presents a compelling narrative grounded in real experiences, it also serves to highlight the complexities of economic policies and their far-reaching consequences. The focus on small businesses may elicit emotional responses, potentially guiding public sentiment against tariffs, thereby reflecting the article's intent to raise awareness about the challenges faced by entrepreneurs.