The trade war with China has hurt my small business in Massachusetts

Our products had always been affordable — until the trade war began.

Delta Cycles

Sixteen years ago, I started working at Delta Cycle as an intern. Now I help run the company in Randolph. We design and sell innovative accessories that make it easier for cyclists to store their bikes. Our products can be found in small independent bicycle stores and large national chain stores like Walmart. Our products have always been affordable — until the 2018 trade war with China began.

Since last fall, our company has been impacted by every round of tariffs and their subsequent increases. Delta Cycle designs its products in America, but because of a sophisticated manufacturing process, they are built in China. So even though we are an American business that employs American workers, we're now paying significantly higher taxes because of this trade war.

Like other companies facing tariffs, we had to increase our prices to cover these extra taxes. We didn’t want to, but tariffs were devouring our bottom line. Because we had to raise our prices, the independent bike shops that sell our products also had to raise prices. These shops depend on the sale of our products to generate money and employ Americans. It’s a vicious cycle that is hurting American businesses, American workers, and American consumers — not China. A May 2019 report published in the National Bureau of Economic Research shows Americans are footing the bill for the Trump administration’s trade war.

But it’s not just our bottom line that’s being hurt by tariffs and the trade war. The trade war also makes it difficult to maintain our business because of the uncertainty it’s creating. I’m forced to track the back-and-forth negotiations with China and have to read mountains of regulatory information just to plan for the future — and I’m doing that instead of growing the business.

Of course, I understand that China hasn’t played fair and has stolen intellectual property. And the United States should end those practices. But my employees and my customers have done nothing wrong. So why are we being punished when we have nothing to do with this fight?

When these tariffs first started, we tried to find an alternative country from which to buy the products we need, since the United States doesn’t have the raw materials or the skilled labor to build them. But the other countries don’t make the products as well as China. Not to mention the fact that it took years for us to develop an efficient supply chain. Moreover, after we received notice of tariff hikes only two weeks before they were enacted, we were expected to blow up the supply chain in a matter of days and completely rebuild it. That’s not enough time to change or start a new supply chain from the ground up.

I explained all of this to the federal government when I filed for an exclusion with the US Trade Representative’s office in the hope that they would spare our business from these damaging taxes. But, like the process itself, the exclusion form was confusing and difficult to fill out. In the end, we were denied the exclusion without any explanation.

So, more than a year later, we’re still stuck between a rock and a hard place. We’re just a small business in Massachusetts trying to develop innovative new products and sell them at reasonable prices. We can’t change our supply chain — and we can’t get any relief from the government. So we’re being forced to pay a massive tax on our business because China has behaved badly. How is that fair?

I hope that President Trump ends the trade war so businesses can focus on hiring and growing instead of drowning in tariffs. But any deal with China has to end tariffs permanently. The economy can’t handle any more tariffs.

Jeff Greenstein is a partner at Delta Cycle in Randolph.