ARI SHAPIRO, HOST:
It's pretty rare for one person to do one thing that affects nearly every business in the United States, but that's the power of the presidency and the new tariffs that took effect this week.
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YAIR REINER: Everyone is just in a holding pattern.
ETHAN FRISCH: We're going to have to scale back a lot of innovation.
LISA WINTON: We just noticed our first invoice that had a tariff line on it.
CRAIG REAVES: I have hopes that tariffs will help us, but that can't be the endgame.
SHAPIRO: Over the last few days, as the tariffs have gone up and down, I've been talking to Americans who run different kinds of businesses. Even though their companies don't have much in common, all of them are doing the same thing right now - trying to figure out what's going on and how to respond. Take Yair Reiner. He invented a popular kitchen gadget, a splatter guard called Frywall. It was a hit on "Shark Tank" back in 2018.
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REINER: Frywall keeps the sizzle in the pan and the splatter off of you and your stovetop.
SHAPIRO: He priced out what it would cost to produce his invention in the U.S. and figured, to turn a profit, he would have to sell a made-in-the-USA Frywall for about 80 bucks.
REINER: You know, it's really hard to sell a splatter guard for that much money.
SHAPIRO: Even the best splatter guard in the world is not going to sell for $80.
REINER: Precisely. It is the best splatter guard in the world, but, you know, splatter just is not as important as other things.
SHAPIRO: So he makes it in China, which allows him to sell it for about $25. And he says that money gets spread around to many parts of the U.S. economy.
REINER: It goes to the U.S. Postal Service, which provides my, quote-unquote, "free shipping." If I sell on Amazon, it goes to Amazon, who has to pay its warehouse workers. I also have to pay my patent attorney so that my patent is protected and I can't get ripped off. It has to go to PR. It has to go to marketing. It has to go to the software firms that I use to, you know, operate and run my business.
SHAPIRO: But now, President Trump has put a 145% tariff on goods from China. At least that's the number as we record this midday Thursday. It's been a moving target.
REINER: I've worked hard to have a stable price on my product for almost 10 years, and now I'm looking at a situation where I'm going to have to raise it by 20, maybe 25%, maybe more. I'm not sure if I still have a market at that point, and I don't know if I still have a business.
SHAPIRO: And so if that's going to be the case for the foreseeable future, for the next four years, where does that leave you?
REINER: It leaves me making plans from week to week, which is not the way that they teach you to run a business, either at your parents' table or at business school.
SHAPIRO: The Trump administration says tariffs on imports are meant to help American manufacturers like Lisa Winton.
WINTON: I'm a small manufacturer in Georgia, and I produce machinery.
SHAPIRO: Winton Machine Company makes metal parts that go into everything from refrigerators to lawn chairs. And most of the company's supply chain is in the U.S., but some of Lisa Winton's distributors get their parts from China, and they've started passing along the cost of tariffs to her.
WINTON: So I have to purchase - I have to place my order, and then when I place my order, they'll let me know what my tariff fee is.
SHAPIRO: Oh, so you might say, I've got $500 to spend on this - or 5,000 or whatever - and then when the bill comes in, you see tacked on to it is a tariff fee that could put this way outside of your budget. You just don't know.
WINTON: I don't know. It's uncertainty. And, you know, with uncertainty also goes - we ship all over the world, so if there's additional tariffs put on my machinery to export, that's going to be very painful.
SHAPIRO: Have you heard from anyone who has said, you know what? - I was going to buy from China, but given the situation with the tariffs, I think I would rather buy from Winton Machine instead? Like, is this going to help you in that respect?
WINTON: We do benefit from manufacturers that say, I want to buy American-made machinery. There's just so much unknown right now, and I think that's the most difficult thing, to make decisions for your company financially, when you just don't know all the pieces to the puzzle.
SHAPIRO: I hear a lot of caution in your voice, but I can't quite tell whether you're cautiously optimistic or cautiously pessimistic right now.
WINTON: I think the glass is half full, and I've taken a few sips.
SHAPIRO: Some businesses have to worry about tariffs on one country. Ethan Frisch has to worry about tariffs on 30 different countries.
FRISCH: We work with producers in Vietnam, in Sri Lanka, in Tanzania, in Guatemala, in Afghanistan and Turkey...
SHAPIRO: He's cofounder and co-CEO of a spice company called Burlap & Barrel. They've spent years developing relationships with small farmers. Yesterday, Trump paused global tariffs at 10% for 90 days on every country but China. But 10% is still a price hike, and nobody knows what'll happen three months from now.
FRISCH: We can't just switch our supplier from Vietnam to another country with a lower tariff rate because that variety of cinnamon simply doesn't grow anywhere else.
SHAPIRO: Burlap & Barrel has decided that even with these tariffs, they won't charge customers more or pay farmers less.
FRISCH: We're going to make less money ourselves. That's the bottom line. At the end of the day, we're going to have to scale back a lot of innovation. We launch about 50 new products every year. We had an advent calendar slated for production this year. That was going to involve custom packaging from China and 24 different spices from all around the world. We've scrapped that project immediately, just as an example.
SHAPIRO: And these tariffs have made Ethan Frisch face another big change that's hard to put a number on.
FRISCH: The farmers that we work with everywhere, in rural areas in Vietnam and Guatemala and Tanzania, they understand that the U.S. is a great destination for their crops, but also the personal pride that goes into knowing that this product is going to American consumers who will appreciate it.
SHAPIRO: Do you think this changes what America represents to them now?
FRISCH: A hundred percent. It has already changed what America represents to them. I think America was framed as a positive trading partner, and I think the trust that underpinned that is significantly eroded already.
SHAPIRO: Well, growing exotic spices in the U.S. might be impossible, but shrimp swim in American waters.
REAVES: My name is Craig Reaves. I'm in Beaufort, South Carolina, and I'm a lifelong commercial shrimper.
SHAPIRO: So was his dad. And the trend lines have been clear for decades.
REAVES: I'm 54, so for my life it's been a trend down, and, you know, the last 20 years has been in a steep decline.
SHAPIRO: His wild-caught shrimp just can't compete on price with the farm-raised shrimp from countries like India and Vietnam. So last week, when Trump first announced tariffs of 26% on India, 46% on Vietnam and more, Reaves was overjoyed.
REAVES: Ecstatic, you know, overwhelmed that somebody's finally standing up against unfair trade practices.
SHAPIRO: And yesterday, when he said for 90 days tariffs on every country but China would be frozen at 10%, that's a lot lower than what you were expecting just last week.
REAVES: So I've tried to consistently say since the very beginning that tariffs is not - it's a short-term gain. It's a short-term help. You know, my hope is not in 50% or 100% tariffs or whatever is negotiated, if it's 10% tariffs. My goal is that the consumer gets to choose whether they buy domestic shrimp or imported shrimp. Instead of being a consuming nation, we need to be a producing nation.
SHAPIRO: You're 54, so it's safe to say you've got more working years behind you than you have ahead of you. What is your hope for where the industry will be by the time you retire?
REAVES: Wow. I'm at a stage in my life where I really want to leave a legacy for my children and grandchildren, for them to have an opportunity to make a living from the sea. And that's at risk right now.
SHAPIRO: Like every American business owner right now in choppy waters, he's just trying to figure out how to stay afloat.
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