Trade Tariffs Put Pressure on US Businesses: A Case Study of Leslie Jordan Inc.

Companies have to submit a particular form to U.S. customs when importing goods into the nation. Lately, these documents have transformed into vivid illustrations of how President Trump’s trade tariffs have placed additional pressure on businesses. Consider Leslie Jordan Inc., a firm that retails activewear for commemorative occasions, which brought in a batch of women’s T-shirts from China at the close of April.

The acquisition happened after President Trump had notably intensified tariffs on Chinese goods, yet prior to any temporary reprieve that had been settled by representatives from both nations. This timing underscores the difficulties businesses have faced while trying to strategize their acquisitions amidst fluctuating tariff rates.

The transaction value of the apparel shipment was $18,639, however, the company paid a substantial $34,389 in tariffs. This equates to almost two-times the worth of the goods. The import tax on this particular shipment was a staggering 185 percent. Frequently, the trade tariffs introduced by Trump stacked upon pre-existing ones.

In this particular instance, the T-shirts were under a basic tariff of 32% determined by the good’s import value. It’s worth noting that many items usually have a minimal base tariff, yet garments and other textile items are subjected to some of the highest tariffs available.

Certain Chinese products are also exposed to exclusive tariffs as a response to alleged unjust trading strategies. These specific tariffs, labeled as Section 301 duties, were initiated during President Trump’s first term and received further expansion under the administration of former President Joseph R. Biden Jr.

In this context, the Section 301 duties appplied an additional levy of 7.5 percent. Notably, one of President Trump’s initial trade interventions upon beginning his second term in January was to implement a tariff on China for its role in facilitating the flow of fentanyl into the U.S.

The inception tariff was 10 percent, which later doubled to 20 percent. By the dawn of April, the administration introduced ‘reciprocal’ tariffs. China’s tariff rate began at 34 percent and progressed to 84 percent, then further jumped to 125 percent. This, along with the 20 percent ‘fentanyl’ tariff, culminated in a hefty 145 percent total tariff on the majority of goods imported.

The company had to accommodate four distinct tariffs to enable the single import of T-shirts. As of the recent Monday, the reciprocal ingredient of tariffs on Chinese goods had been put on hiatus for a three-month period as the U.S. and China contemplate over revising their trade terms.

Subsequent to the changes, if the identical shipment were to be imported today, it would experience a comprehensive tariff rate of 69.5 percent. Although still significantly high, it’s a sliver of what the company was required to pay a few weeks back. By virtue of the reduced rate, the company would have saved $21,000 on import duties for the same shipment.

While a portion of the tariffs have been suspended, at least for the time being, the duration taken to order, manufacture, load, and transport goods across the Pacific could reasonably cross the 90-day relief period. Moreover, keeping in view the dramatic shifts in U.S. trade policy, predicting the actual payable amount when the next order reaches American shores can become challenging.

The constant fluctuations make it difficult to estimate what tariff rates will apply when future goods are produced and finally reach the U.S. If we were to conceive it based on the existing tariff, who’s to say what the future holds? It’s a troubling uncertainty for businesses seeking to navigate these rapid changes in international trade relations.