For almost 20 years, our company has converted and imported commercial grade coated fabrics, mostly from China. Our products are technically advanced and stand up to the harsh chemical cleaners that are now de rigueur in healthcare, commercial, academic and hospitality settings. This technology is not available in the U.S., and we rely on our Chinese suppliers to partner with us to develop products that our global markets need.
As a small business, section 301 tariffs have crippled us and severely challenged our ability to be profitable, retain employees and engage in new product development. So far, though, the Biden administration’s intent regarding section 301 tariffs is not yet clear.
We understand the number of critical issues that the administration must quickly confront and resolve. Many of these seem to be ahead of the tariff issue, but along with this pandemic, 301 tariffs are the issue that weighs most heavily on our business. Prior to this trade war, our business had experienced year after year of growth, but the section 301 tariffs added entirely new roadblocks.
We have attempted to redirect supply chains but have failed to find reliable alternative suppliers. For years, we have looked at manufacturing our products domestically, but to no avail. We are heartened by the Biden’s administration’s plans to bring back domestic manufacturing, but we know that the cost of establishing the infrastructure needed to build our products is huge.
As a small business, we don’t have the resources to build it, and unless the government intends to build it, as the Chinese government has done, it will not become reality. In addition to building an infrastructure from the ground up, the challenges of securing and training a qualified workforce, of establishing a reliable domestic supply chain, and of meeting regulatory requirements are significant. We would like nothing more than to label our products Made in America, but the task seems out of reach currently. We hope that will change over time.
We spent countless hours and resources applying for exclusions from 301 tariffs. We compiled documents and data to show that the tariffs were having a disastrous effect on our business, that our products are not available in the U.S., and that their performance characteristics play an integral role in providing safe healthcare environments. Yet, all our attempts at exclusions were denied, even though exclusion requests for identical products from competitors were granted. We were never given an explanation for this, and it makes no sense to us.
Tariffs are a huge burden on American companies and families, costing over $80 billion to date, and have failed in terms of the original intent whereas China is expected to grow at a blistering 8.3% pace in 2021, which is more than double the 4.1% growth seen in the U.S. And along with the momentous differences in humanitarian and political practices that exist between our countries, tariffs have failed to disrupt the relationships U.S. companies have with their Chinese trading partners.
We need the Biden administration to quickly find a way to provide relief to small businesses from this failed tariff policy. China should be dealt with in powerful and persistent ways that do not translate to excessive taxation on American businesses. Those of us who have worked in China for decades understand that dealing with them requires tough negotiation, but we also know that the Chinese will not be bullied. That policy from the prior administration has failed. Moving forward, we need President Biden to recognize that American businesses are not the problem and should not continue to be penalized by 301 tariffs.
Ann Brunett and Bill Fisch are the small business owners of The Mitchell Group, a faux leather upholstery manufacturer established in 2004.