As another round of Chinese-U.S. tariffs loom on the horizon, it’s worth taking a look at some of the effects and feedback for the ones already in place.
Aaron Emigh, the co founder and CEO of Brillant, was interviewed in Bloomberg and highlighted some of the troubles he and burgeoning companies are encountering with the recent and costly tariffs, some of which are as high as 25% for goods and raw materials.
“As a startup company, you’re overcoming a lot of barriers already,” Emigh said. “You don’t need the government stacking the deck against you as well.”
Ultimately, tariffs can hurt the future U.S. economy if today’s nascent companies can’t grow into the next Apple Inc. or Alphabet Inc.’s Google, he said.
Missing out on the next Apple, a company with a $1.09 trillion market capitalization, would be quite the opportunity cost, but these tariffs are complicated in that they are pieces in a much larger game. The Chinese tariffs aren’t your run of the mill protectionist trade moves like this year’s steel tariffs. This is as much an attempt to protect American industry as it is to push China to the bargaining table on it’s more questionable trade policies like their IP transfer policy.
It’s unclear where all this is heading, and whether it will get worse or better from here, but while we wait for a return to calmer times, there are a businesses and consumers in both countries (and around the world) that are going to be caught in the crossfire.
The company said in a filing posted online that it expected to double its 60 workers once six production lines are installed, but it needs raw materials from China now facing tariffs that can’t be replaced, said Thomas Jarvis, a Washington attorney representing the company.
“It’s reasonable to assume that any startup faced with a dramatic increase in its cost of operations is going to be challenged,” he said in an interview after testifying on Tuesday.
U.S. business — but especially the electronics industry — is deeply connected to China and the Pearl River Delta. We’re all watching closely to see how this shakes the market. More to come!