In a tremendous diplomatic coup, the United States and China have reached an accord. All forms of tariffs canceled over a period of 90 days. This temporary truce, announced just as retailers and suppliers finalize their plans for the holiday shopping season, offers a glimmer of hope for businesses that have struggled under the weight of high tariffs.
The deal goes a long way toward lowering the effective U.S. tariff rate on Chinese goods from 145% to 30%. In return, China drops its own retaliatory tariff on American goods from 125% to 10%. This pause is crucial for businesses such as All Things Equal. Their owner, Eric Poses, depends on importing raw materials—like fabric and components—from China.
These tariffs are having a marked effect. Until this decision, thousands of American companies had already been forced to cancel orders or shelve plans after President Donald Trump imposed these tariffs. Poses acknowledged that even with the most recent decisions there is some lingering uncertainty that continues to hang over the tariff landscape.
“It’s very hard to plan because if you want to go back to production in a couple of months, then you’re worried about what will the tariff rate be when it hits the U.S. ports after that 90-day period,” – Eric Poses.
Another business owner, Jim Umlauf of 4Knines, which produces vehicle seat covers and cargo liners, echoed the sentiment of uncertainty. He pointed out that the lower tariff rate is a step in the right direction. Indeed, nimble small businesses like his own still continue to face a myriad of uphill profitability struggles.
“I appreciate any progress being made on the tariff front, but unfortunately, we’re still far from a real solution — especially for small businesses like mine,” – Jim Umlauf.
Umlauf raised a serious concern. He clarified that once tariffs go above 50% businesses start to lose their earnings unless they substantially increase prices, which risks driving customers out the door.
Firms that depend on Chinese imports are breathing a sigh of relief and still scared to death. Take Jeremy Rice’s environmental home-décor shop, for instance—all those flowers sold by this popular entrepreneur are 90% made in China. And finally, he identified some of the issues vendors are grappling with given all the uncertainty that’s still very much at play.
“Our vendors are still kind of running around juggling, not knowing what they’re gonna do,” – Jeremy Rice.
Meanwhile, Marc Rosenberg, founder and CEO of The Edge Desk, emphasized the need for a more stable long-term plan regarding tariffs. He poured millions into R&D so he could launch a line of $1,000 ergonomic chairs. Ansara argues that predictable policies will give businesses the confidence to make long-term plans.
“There needs to be a plan in place that lasts a year or two so people can plan against it,” – Marc Rosenberg.
Silva of WS Game Company brought up perhaps the biggest concern. Even with the new agreement, his company is subject to a 30% tariff on imported goods. Unfortunately, Mr. Pallot explained, the timing of the tariff pause landed at the worst possible moment. They are in fact under urgent pressure to order these items, with the holiday buying season around the corner.
“The timing couldn’t have been any worse with regard to placing orders, so turning on a dime to pick back up with customers and our factories will put us severely behind schedule,” – Silva.
Silva further discussed their plans to order as many products as necessary to satisfy expected demand, even at higher costs. He continued to highlight the importance of a strong base when it comes to those long-term contracts to offset risks.
“We will order enough to get by and satisfy the demand we know will be there at the increased pricing needed, but until we get a solid foundation of a long-term agreement, the risks are still too high to be aggressive,” – Silva.
This 90-day pause takes place when most businesses—big or small—are clamoring for predictability in their supply chains. The looming uncertainty surrounding future tariffs has left many companies in precarious positions as they prepare for one of the busiest shopping seasons of the year.
