WEBVTT - Rebecca Minkoff Co-Founder Rebecca Minkoff Talks Tariffs, Small Businesses

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>With Us Now is Rebecca mincov. She is the founder

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<v Speaker 2>and chief creative officer of Rebecca Mincouf. Rebecca also part

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<v Speaker 2>of a group of small business owners who wrote an

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<v Speaker 2>open letter to President Trump and lawmakers urging tariff exemptions

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<v Speaker 2>on small businesses. Rebecca, it's great to have you with

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<v Speaker 2>us now. Tell us about the response. Have you heard

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<v Speaker 2>back from any of the lawmakers.

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<v Speaker 1>We unfortunately have not heard back yet, but we do

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<v Speaker 1>know that Trump is listening, as we know with the news,

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<v Speaker 1>you know, the most recent news, it seems like there

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<v Speaker 1>is a willingness to listen, whether it's the noise.

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<v Speaker 3>We've made or that in general, you know.

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<v Speaker 1>Small businesses are making across America and we're crossing our

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<v Speaker 1>fingers and hoping to get a meeting soon.

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<v Speaker 4>How much would it cost to bring production here, Rebecca,

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<v Speaker 4>I mean, what kind of upcharge would you be looking at?

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<v Speaker 4>Is it anything compared to tariff's on China?

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<v Speaker 1>I think we have to first start with the infrastructure.

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<v Speaker 1>There is no hand infrastructure in America anymore besides a

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<v Speaker 1>couple of small factories in New York City. So not

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<v Speaker 1>only would we have to build a factory that could

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<v Speaker 1>make the amount of units for trying to make, but

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<v Speaker 1>we'd have to bring back hardware manufacturing, bring back tanning

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<v Speaker 1>and leather. I mean, these are all things that are

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<v Speaker 1>purchased overseas and assembled, whether it's China or where we

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<v Speaker 1>make in Cambodia and Vietnam. And so you're asking for,

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<v Speaker 1>you know, if you want this to really work, give

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<v Speaker 1>us grants to build factories, give us several years of

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<v Speaker 1>tear breaks in order to make these things happen, and

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<v Speaker 1>then we'd love to make in America. It just right now,

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<v Speaker 1>if I were to switch everything to America, my price

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<v Speaker 1>would double and my consumer is not here for that.

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<v Speaker 5>You have spoken to so many other businesses in this letter.

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<v Speaker 5>You've given some real world impacts, and you've said that

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<v Speaker 5>you guys are becoming unintended collateral damage in this escalating

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<v Speaker 5>trade war. What do you think are the things people

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<v Speaker 5>really need to understand about how small businesses are faring

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<v Speaker 5>right now? The damage that's been caused today.

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<v Speaker 1>So the damage that's being caused to day, and some

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<v Speaker 1>incredible female founded brands like Juliette why Juliette Wines, right

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<v Speaker 1>Land Olive Oil State bags is as a small business,

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<v Speaker 1>we can't afford to absorb these costs like a bigger

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<v Speaker 1>company can with far larger negotiating power, and we can't

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<v Speaker 1>pass it on to our customers. So on the handbag side,

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<v Speaker 1>we're actually choosing to take the margin hit not pass

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<v Speaker 1>it on to our customer, because we know with the

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<v Speaker 1>rising cost of everything else, you know, a thirty dollars

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<v Speaker 1>impact to her is truly meaningful. And so we are

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<v Speaker 1>looking at over a billion dollars of damage that will

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<v Speaker 1>be affected if this goes through with just forty of

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<v Speaker 1>the businesses that sign the petition. So we're urging Trump

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<v Speaker 1>and lawmakers to truly listen to us and give us exemptions.

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<v Speaker 3>Well, let's talk about what.

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<v Speaker 2>That means for you and your business, that decision to

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<v Speaker 2>take the margin had and to eat that cost. I mean,

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<v Speaker 2>what does that mean for your planning? Do you have

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<v Speaker 2>to pull back on hiring, do you have to reduce headcount,

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<v Speaker 2>pull back on maybe some planned exps? What does that

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<v Speaker 2>actually look like for you?

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<v Speaker 1>So ironically, the day that the tariffs were announced was

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<v Speaker 1>the same week that we were in market selling for

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<v Speaker 1>Q four of this year, so our buyers came in

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<v Speaker 1>all with very pulls back orders and conservative purchase orders,

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<v Speaker 1>which affects our Q four outlook.

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<v Speaker 3>And so once we know that business is going to.

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<v Speaker 1>Be less than we thought it was, even if he

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<v Speaker 1>changed his mind, they're not coming back and saying we're

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<v Speaker 1>going to increase our orders because no one knows with

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<v Speaker 1>all this uncertainty.

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<v Speaker 3>So I can't tell you.

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<v Speaker 1>What the outlog looks like yet, but it is going

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<v Speaker 1>to impact everything you just mentioned, unfortunately, and it's terrible

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<v Speaker 1>because it impacts people's jobs, their livelihoods, and our ability

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<v Speaker 1>to expand.

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<v Speaker 4>So we just heard from Scott Bessant and his comments

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<v Speaker 4>on I think tax breaks were a little bit overshadowed

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<v Speaker 4>by Caroline Levitt saying it was a hostile move by

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<v Speaker 4>Amazon to show consumers the cost impact of tariffs. Amazon

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<v Speaker 4>has now said, hey, we never planned on doing that anyways,

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<v Speaker 4>So it looks like they've been successfully scared off of that.

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<v Speaker 4>But I wonder to get back to his tax point

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<v Speaker 4>and to underline what you were saying earlier. If they

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<v Speaker 4>allow you to write off a factory, if they allow

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<v Speaker 4>you to write off all of the equipment, you still

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<v Speaker 4>need a reprieve on tariffs while you're building those things, right, Rebecca.

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<v Speaker 4>So I mean the tax carrot is great, but you've

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<v Speaker 4>still got the tariff stick beating you from behind.

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<v Speaker 1>Correct. And also we have to train and hire people

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<v Speaker 1>who know the craft of making handbags. That's not something

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<v Speaker 1>you just easily teach someone who graduates from college.

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<v Speaker 3>And so I think there's so many factors we need time.

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<v Speaker 1>You know, if this is going to happen, we need

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<v Speaker 1>probably three to five years to build up the infrastructure

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<v Speaker 1>to support this business again and then keep that going

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<v Speaker 1>when the new administration comes in in four years and

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<v Speaker 1>changes course. So it's really all about how do we

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<v Speaker 1>do this in sustainable way that doesn't change the minute

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<v Speaker 1>there's a new president.

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<v Speaker 5>You know, you've brought up some potential here, including targeted grants,

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<v Speaker 5>But I want to focus on the number one issue

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<v Speaker 5>you brought up here, this idea of small business tariff exemptions.

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<v Speaker 5>How likely do you think that scenario would be for

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<v Speaker 5>there to be a threshold or by employees or revenue

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<v Speaker 5>that could get you through the door in a way

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<v Speaker 5>that could help you out when the larger businesses might

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<v Speaker 5>be disproportionately impacted in an easier way because they have

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<v Speaker 5>the scale to deal with this.

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<v Speaker 1>You know, I think that it's a creative idea. It

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<v Speaker 1>gives us time, It helps ease a lot of these

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<v Speaker 1>small businesses where the pressure and our minimums are so

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<v Speaker 1>much lower, so we have a lot less leverage. We've

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<v Speaker 1>seen it done with the you know, microchips and Apple phones.

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<v Speaker 1>So if they're getting an exemption or they're not going

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<v Speaker 1>to be charged, I think we feel as small businesses

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<v Speaker 1>doing under fifty million.

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<v Speaker 3>Dollars, you know, keep us alive.

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<v Speaker 1>We are employing millions of people collectively and affecting livelihoods

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<v Speaker 1>across the US. And so if you really want to

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<v Speaker 1>make America great again, you should make sure that we

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<v Speaker 1>don't go away, because a lot of the brands I

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<v Speaker 1>mentioned will go away.

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<v Speaker 2>All right, Rebecca a somber note to leave that on.

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<v Speaker 2>Would love to stay in touch. Our thanks to Rebecca

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<v Speaker 2>Man Coffee