US businesses face President Trump's tariff 'wall'

Photo caption — Traders at the New York Stock Exchange, USA. Photo: THX/TTXVN

“It’s been a nightmare,” said Jared Hendricks, owner of Utah-based Village Lighting. Hendricks took out a $1.5 million mortgage on his home earlier this year to cover the unexpected spike in costs. Since April, most goods imported into the U.S. have been subject to a minimum 10% tariff.

Dozens of US trading partners are facing tariffs ranging from 25% to 40% unless they sign trade deals with the Trump administration by an August 1 deadline.

In recent weeks, US leader Trump has sent letters to several countries outlining his plans to impose tariffs on their goods. He has also reached agreements with major trading partners, including the European Union (EU) and Japan.

Overall, goods imported into the US will be taxed from 10% to 50%, depending on their origin, compared with an average tariff rate of nearly 2.5% at the beginning of the year.

Mr. Hendricks, who runs a business with about a dozen employees, said the new tariffs would present a series of challenges for his business, which sells Christmas lights and decorations made in Southeast Asia. He expected many of his company’s shipments to arrive in the U.S. after Aug. 1.

Mr Hendricks has struggled to compete with larger rivals, so he is pushing suppliers and shipping companies to deliver ahead of schedule. The new expenses come during the low season, when he is barely making any money.

Larger businesses also said the tariffs had hurt their profits, even though some were exempted by the White House and the plan has yet to be fully implemented.

General Motors recently told investors that it paid more than $1 billion in tariffs from early April to late June, despite exemptions for auto parts from Mexico and Canada.

Toymakers Hasbro and Mattel predict the tariffs will cost them tens of millions of dollars this year, forcing them to cut their revenue expectations. Aerospace manufacturer RTX (formerly Raytheon) said that even after mitigating the impact, it expects to lose $500 million due to the new tariffs.

Steel industry leaders, meanwhile, are hopeful that the new tariffs will boost domestic demand. Some labor unions have also expressed support for parts of President Trump’s plan.

However, economists still predict that this tax will slow growth in the US, because the profits of companies will be affected. Businesses will then have to cut investment or accept lower sales due to price increases.

Waza, a Los Angeles store with about 30 employees that sells Japanese-made products like knives and incense, has begun raising prices by 10% to 20%. While Japanese and U.S. officials have called the agreement to reduce tariffs on Japanese imports to 15% a positive one, a Waza representative called the outcome disappointing.

Goldman Sachs analysts recently estimated that the tariffs would reduce U.S. growth by 1 percentage point this year. Yet U.S. stocks have soared to new highs as the fear that gripped financial markets following Trump’s tariff announcement in April has subsided. Consumer confidence is up, prices are under control, and the job market remains strong.

Ernie Tedeschi of Yale University (USA) assessed that part of the reason was that the previous instability had been resolved. He also predicted that the tariffs would reduce US growth by about 0.8 percentage points this year.

But Tim Quinlan at Wells Fargo said people may be underestimating the risk. He noted that consumer spending on discretionary services, like taxis or air travel , fell in the first five months of the year, which only happens during or immediately after a recession. That doesn't mean a "recession is coming," but it does raise doubts about consumers' ability to continue supporting the economy, he said.

With pre-tariff inventories running low as the August 1 deadline approaches, the full impact of the new tariffs will be felt in the coming months.

Source: https://doanhnghiepvn.vn/quoc-te/doanh-nghiep-my-doi-mat-buc-tuong-thue-quan-cua-tong-thong-trump/20250730065517399