61.7 F
Schenectady
Tuesday, October 21, 2025
type here...

Trump tariffs will lead to abandoned freight at ports as cash-strapped businesses reject orders

Business
Updated:
Chris Washington
By Chris Washington
spot_img
Trump tariffs will lead to abandoned freight at ports as cash-strapped businesses reject orders
spot_img

Businesses both large and small tell WHNY News that the latest round of President Donald Trump’s tariffs, targeting countries all over the world and taking the trade levies up to the highest rates in a century, could result in freight being abandoned at ports as cash-strapped owners and CEOs reject incoming goods that could financially wipe them out.

Rick Muskat, president of the family-owned shoe retailer Deer Stags, which imports around two million shoes a year — with about 98% of their men’s and boy’s shoes made in China and sold in Macy’s, Kohl’s, JCPenney, and on Amazon — is among the business owners preparing to take on exponentially increased import duties, but says the financial pain and split of the pain between his firm and retailers will be difficult.

His once $50 pair of men’s shoes and $35 little boys’ shoes have already gone up $80 to $65, respectively, after recent trade war moves by the U.S., with Deer Stags set to pay more than a 104% new tariff on Chinese goods being stacked atop previous tariffs.

Prior to the tariff increases in 2025, his company was paying a 6% duty on their shoes.

“Then the tariffs were raised by 10% two times, bringing my tariffs up to 26%. Then last week Trump put on an additional 34% and now the 50% levied today. All of these tariffs bring my tariff total to 110% on my non-leather shoes. My leather shoes now have a tariff of 120%. How do you budget that?” Muskat said.

He estimates that the cost of freight orders subject to the new tariffs will rise from $60,000 to between $600,000 and $1 million.

“The cash flow burden is the immediate problem,” he said. “We don’t have the capital to grapple with this. There is only one pile of money and I will pay for this, but that means I’m not paying for something else. We are going to pay the duty because we have no choice.”

Muskat said he won’t reject the containers at the port which would force the supplier to take the freight back, but he has told one factory to pause shipping for a week or two, to see how things unfold. Conversations with retailers are ongoing.

Other U.S. importers are expected to abandon goods at ports, which can then either go back to the manufacturer or it can be auctioned or destroyed in the U.S.

On Wednesday, Trump added another change to the fluid situation, saying some countries other than China would receive a 90-day pause in the implementation of tariffs, but new tariffs on China would rise to 125%. According to one estimate, more than half of the $2 billion in daily import tariffs to be charged by the U.S. are to be on Chinese goods and the tariffs on those goods will reach over $1 billion per day.

“The major trend we see is shippers looking to not accept their freight,” said Joseph Esteves, CEO of Maine Pointe, a global supply chain consultant. “A lot of these companies are levered financially. They don’t have the working capital requirements and they don’t have the cash. So they simply cannot just take on this and hope to see what happens. They don’t have the liquidity to do that,” he said. Balance sheets and cash levels were more sensitive to major changes in costs, as consumer demand slowed, “before all this nonsense,” he said. “Every CEO we’re talking to seems to just be waiting. They’re just not accepting at this moment.”

Right now, many companies are telling their manufacturing facilities to delay shipment and not have freight loaded onto a vessel. If the goods arrive to port and they can’t pay the import tariffs, the goods sit at port and the company is billed with costly detention charges.

For many importers, ‘there are no factories in the United States’

Bruce Kaminstein, an angel Investor with New York Angels and founder and former CEO of cleaning products company Casabella, knows the challenges of manufacturing in China. Kaminstein was able to navigate the tariffs in the first trade war with China but he warns start-up companies do not have the coffers of big companies to withstand the capital crunch.

“Products will be left in containers because retailers won’t take them,” said Kaminstein.

For now, any freight on the water will not face the new tariffs. In updated guidance on the China tariffs released by U.S. Customs on Tuesday, an “on the water clause” explained the cargo coming into the ports today or in the coming weeks will not be subject to the tariffs, which won’t be tacked on to any goods arriving until May 27.

But Kaminstein says it takes years for manufacturing supply chains to be established.

“The average size houseware company, for example, is $20 million. They don’t have the capital to open up a factory. … There are no companies, no factories out there that make products for other brands,” he said. “That’s the real point here. If you have a great idea, where do you go to make the product? There are no factories here in the United States making products for other brands.”

Mary Rollman, KPMG US organizational strategist & partnership executive, said companies have more sophisticated and better analytics to value the cost of moving a supply chain today, but added it does take years to find and qualify a supplier.

“Companies need to evaluate the cost of restoring a supply chain,” Rollman said. “They will review the hard data on fixed costs, looking at the labor pool to see if there are enough workers to fill the demand. They also need to see if it is still cost-effective to keep manufacturing outside of the U.S. or move to other countries with fewer tariffs because it is still cheaper than coming back.”

The other option, she said, is staying in the country where manufacturing takes place currently and banking on a new administration in four years which might rescind the tariffs.

“We use components from all over,” Kaminstein said. “Very rarely are products just made in one place. We’re used to a global supply chain. At Casabella, we brought products in from all over the world, and we made products in the United States.”

The Small Business Administration told WHNY News in an email that Trump’s trade plan will ultimately support U.S. business owners.

In an email, an SBA spokesman wrote, “The SBA fully supports President Trump’s efforts to restore fair trade, which will bring back American jobs and revitalize American industry, empowering entrepreneurs with the level playing field to compete and win. Combined with SBA’s new manufacturing initiative, including our effort to cut $100 billion in red tape, this administration will unleash historic opportunity for small businesses and workers alike.”

Deer Stags’ “razor-thin margins” prohibited it from frontloading products, and consumers may ultimately have to pay. Muskat says difficult price talks with retailers are underway.

“We had one conversation with a retailer who agreed to split the increase but they did not think they could go up in price. Most of the retail community is still trying to figure out what to do,” he said. “It is so fluid. How do you plan? Hope is not a strategy, but most people are hoping Trump and Xi will talk. Both are talking tough but this will be damaging to both countries.”

“Tariffs on goods that consumers buy every day like clothes or that cannot be grown here like coffee or bananas just tripled or more,” said Josh Teitelbaum, senior counsel of Akin. “We should expect that will ripple through the economy.”

“It’s important to remember the new tariffs will be paid for by U.S. importers,” said Jon Gold, vice president of supply chain and customs policy at the National Retail Federation. “While retailers will mitigate as best they can, they unfortunately won’t be able to absorb all of the increased costs. With some tariff rates near 50% and others more than 100%, many retailers will be forced to raise prices. We encourage the administration to quickly negotiate agreements with countries that we are engaged with trade.”

spot_img
Chris Washington
Chris Washingtonhttps://whnynews.com
Chris Washington brings over 25 years of experience in financial journalism to WHNY News. A Schenectady native, Chris has a keen eye for business trends impacting upstate New York. His insightful reporting has earned him numerous accolades. Chris holds a degree in Economics from Syracuse University.
Latest news
Read More

90 COMMENTS

  3. Hi there! This post could not be written any better! Reading through this post reminds me of my old room mate! He always kept chatting about this. I will forward this page to him. Fairly certain he will have a good read. Thanks for sharing!

  33. excellent post, very informative. I wonder why the other specialists of this sector don’t notice this. You must continue your writing. I am sure, you’ve a great readers’ base already!

  35. Get ready to elevate your betting experience with an exclusive 1xBet promo code! Whether you’re from Bangladesh, Pakistan, India, Nepal, Sri Lanka, Nigeria, Egypt, or the Philippines, you can unlock amazing rewards like free bets, no deposit bonuses, and free spins using the latest 1xBet promo codes today. New users can enjoy a special registration promo code that boosts your first deposit or even gives you a chance to play risk-free. Looking for a Bangladesh 1xBet promo code or a 1xBet promo code India for the app? We’ve got it all here, updated daily. Don’t miss your chance to grab a 1xBet official promo code, win big, and make the most out of your betting journey. Claim your 1xBet free promo code today and start winning smarter with bigger bonuses, free spins, and more exclusive offers worldwide! No matter where you are, finding the right 1xBet promo code today means unlocking bigger chances to win, with offers perfectly tailored for players across Bangladesh, Pakistan, India, Nepal, Sri Lanka, Nigeria, Egypt, and the Philippines.

  43. Hi there, simply become aware of your weblog via Google, and found that it’s really informative. I’m gonna watch out for brussels. I’ll appreciate in case you continue this in future. Many folks will likely be benefited out of your writing. Cheers!

  77. I not to mention my guys have already been following the best ideas located on your web page and before long came up with a horrible feeling I had not expressed respect to the website owner for those techniques. These people are actually consequently very interested to study all of them and have now clearly been tapping into those things. We appreciate you genuinely really considerate as well as for selecting this sort of tremendous themes most people are really desperate to be aware of. Our sincere regret for not saying thanks to sooner.

  78. That is really attention-grabbing, You’re an excessively professional blogger. I’ve joined your rss feed and sit up for searching for extra of your fantastic post. Additionally, I’ve shared your website in my social networks!

  79. Throughout this great pattern of things you get an A+ for effort and hard work. Where you misplaced everybody was on all the details. You know, it is said, the devil is in the details… And that couldn’t be much more accurate in this article. Having said that, let me say to you precisely what did do the job. Your writing can be highly persuasive and this is probably why I am making an effort in order to opine. I do not make it a regular habit of doing that. 2nd, while I can see a jumps in logic you come up with, I am definitely not convinced of how you appear to unite your details that make the actual conclusion. For now I will subscribe to your position but wish in the future you actually link the dots much better.

  81. Официальный Telegram канал 1win Casinо. Казинo и ставки от 1вин. Фриспины, актуальное зеркало официального сайта 1 win. Регистрируйся в ван вин, соверши вход в один вин, получай бонус используя промокод и начните играть на реальные деньги.
    https://t.me/s/Official_1win_kanal/51

  83. Hello very nice site!! Man .. Excellent .. Amazing .. I’ll bookmark your blog and take the feeds additionallyKI am satisfied to search out a lot of useful info here within the publish, we need work out more strategies on this regard, thanks for sharing. . . . . .

  84. I have been exploring for a little for any high-quality articles or blog posts on this kind of house . Exploring in Yahoo I eventually stumbled upon this site. Reading this information So i am satisfied to express that I have a very just right uncanny feeling I came upon exactly what I needed. I so much without a doubt will make sure to don¦t forget this website and give it a look regularly.

  86. Good ?V I should definitely pronounce, impressed with your website. I had no trouble navigating through all the tabs as well as related info ended up being truly easy to do to access. I recently found what I hoped for before you know it at all. Reasonably unusual. Is likely to appreciate it for those who add forums or something, web site theme . a tones way for your client to communicate. Excellent task..

  90. I simply wished to appreciate you again. I do not know what I would have accomplished in the absence of those solutions shown by you directly on that industry. Previously it was a real terrifying setting in my opinion, nevertheless understanding the skilled manner you treated it took me to leap with delight. Now i am happier for this help and in addition believe you find out what a powerful job you are getting into instructing others by way of your website. More than likely you haven’t encountered any of us.

Leave a Reply to uruguay homes for sale Cancel reply

Please enter your comment!
Please enter your name here

Latest from Your Area

Must read

Money Corner

Weekly Cartoon