Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: With Us Now is Rebecca mincov. She is the founder
Speaker 2: and chief creative officer of Rebecca Mincouf. Rebecca also part
Speaker 2: of a group of small business owners who wrote an
Speaker 2: open letter to President Trump and lawmakers urging tariff exemptions
Speaker 2: on small businesses. Rebecca, it's great to have you with
Speaker 2: us now. Tell us about the response. Have you heard
Speaker 2: back from any of the lawmakers.
Speaker 1: We unfortunately have not heard back yet, but we do
Speaker 1: know that Trump is listening, as we know with the news,
Speaker 1: you know, the most recent news, it seems like there
Speaker 1: is a willingness to listen, whether it's the noise.
Speaker 3: We've made or that in general, you know.
Speaker 1: Small businesses are making across America and we're crossing our
Speaker 1: fingers and hoping to get a meeting soon.
Speaker 4: How much would it cost to bring production here, Rebecca,
Speaker 4: I mean, what kind of upcharge would you be looking at?
Speaker 4: Is it anything compared to tariff's on China?
Speaker 1: I think we have to first start with the infrastructure.
Speaker 1: There is no hand infrastructure in America anymore besides a
Speaker 1: couple of small factories in New York City. So not
Speaker 1: only would we have to build a factory that could
Speaker 1: make the amount of units for trying to make, but
Speaker 1: we'd have to bring back hardware manufacturing, bring back tanning
Speaker 1: and leather. I mean, these are all things that are
Speaker 1: purchased overseas and assembled, whether it's China or where we
Speaker 1: make in Cambodia and Vietnam. And so you're asking for,
Speaker 1: you know, if you want this to really work, give
Speaker 1: us grants to build factories, give us several years of
Speaker 1: tear breaks in order to make these things happen, and
Speaker 1: then we'd love to make in America. It just right now,
Speaker 1: if I were to switch everything to America, my price
Speaker 1: would double and my consumer is not here for that.
Speaker 5: You have spoken to so many other businesses in this letter.
Speaker 5: You've given some real world impacts, and you've said that
Speaker 5: you guys are becoming unintended collateral damage in this escalating
Speaker 5: trade war. What do you think are the things people
Speaker 5: really need to understand about how small businesses are faring
Speaker 5: right now? The damage that's been caused today.
Speaker 1: So the damage that's being caused to day, and some
Speaker 1: incredible female founded brands like Juliette why Juliette Wines, right
Speaker 1: Land Olive Oil State bags is as a small business,
Speaker 1: we can't afford to absorb these costs like a bigger
Speaker 1: company can with far larger negotiating power, and we can't
Speaker 1: pass it on to our customers. So on the handbag side,
Speaker 1: we're actually choosing to take the margin hit not pass
Speaker 1: it on to our customer, because we know with the
Speaker 1: rising cost of everything else, you know, a thirty dollars
Speaker 1: impact to her is truly meaningful. And so we are
Speaker 1: looking at over a billion dollars of damage that will
Speaker 1: be affected if this goes through with just forty of
Speaker 1: the businesses that sign the petition. So we're urging Trump
Speaker 1: and lawmakers to truly listen to us and give us exemptions.
Speaker 3: Well, let's talk about what.
Speaker 2: That means for you and your business, that decision to
Speaker 2: take the margin had and to eat that cost. I mean,
Speaker 2: what does that mean for your planning? Do you have
Speaker 2: to pull back on hiring, do you have to reduce headcount,
Speaker 2: pull back on maybe some planned exps? What does that
Speaker 2: actually look like for you?
Speaker 1: So ironically, the day that the tariffs were announced was
Speaker 1: the same week that we were in market selling for
Speaker 1: Q four of this year, so our buyers came in
Speaker 1: all with very pulls back orders and conservative purchase orders,
Speaker 1: which affects our Q four outlook.
Speaker 3: And so once we know that business is going to.
Speaker 1: Be less than we thought it was, even if he
Speaker 1: changed his mind, they're not coming back and saying we're
Speaker 1: going to increase our orders because no one knows with
Speaker 1: all this uncertainty.
Speaker 3: So I can't tell you.
Speaker 1: What the outlog looks like yet, but it is going
Speaker 1: to impact everything you just mentioned, unfortunately, and it's terrible
Speaker 1: because it impacts people's jobs, their livelihoods, and our ability
Speaker 1: to expand.
Speaker 4: So we just heard from Scott Bessant and his comments
Speaker 4: on I think tax breaks were a little bit overshadowed
Speaker 4: by Caroline Levitt saying it was a hostile move by
Speaker 4: Amazon to show consumers the cost impact of tariffs. Amazon
Speaker 4: has now said, hey, we never planned on doing that anyways,
Speaker 4: So it looks like they've been successfully scared off of that.
Speaker 4: But I wonder to get back to his tax point
Speaker 4: and to underline what you were saying earlier. If they
Speaker 4: allow you to write off a factory, if they allow
Speaker 4: you to write off all of the equipment, you still
Speaker 4: need a reprieve on tariffs while you're building those things, right, Rebecca.
Speaker 4: So I mean the tax carrot is great, but you've
Speaker 4: still got the tariff stick beating you from behind.
Speaker 1: Correct. And also we have to train and hire people
Speaker 1: who know the craft of making handbags. That's not something
Speaker 1: you just easily teach someone who graduates from college.
Speaker 3: And so I think there's so many factors we need time.
Speaker 1: You know, if this is going to happen, we need
Speaker 1: probably three to five years to build up the infrastructure
Speaker 1: to support this business again and then keep that going
Speaker 1: when the new administration comes in in four years and
Speaker 1: changes course. So it's really all about how do we
Speaker 1: do this in sustainable way that doesn't change the minute
Speaker 1: there's a new president.
Speaker 5: You know, you've brought up some potential here, including targeted grants,
Speaker 5: But I want to focus on the number one issue
Speaker 5: you brought up here, this idea of small business tariff exemptions.
Speaker 5: How likely do you think that scenario would be for
Speaker 5: there to be a threshold or by employees or revenue
Speaker 5: that could get you through the door in a way
Speaker 5: that could help you out when the larger businesses might
Speaker 5: be disproportionately impacted in an easier way because they have
Speaker 5: the scale to deal with this.
Speaker 1: You know, I think that it's a creative idea. It
Speaker 1: gives us time, It helps ease a lot of these
Speaker 1: small businesses where the pressure and our minimums are so
Speaker 1: much lower, so we have a lot less leverage. We've
Speaker 1: seen it done with the you know, microchips and Apple phones.
Speaker 1: So if they're getting an exemption or they're not going
Speaker 1: to be charged, I think we feel as small businesses
Speaker 1: doing under fifty million.
Speaker 3: Dollars, you know, keep us alive.
Speaker 1: We are employing millions of people collectively and affecting livelihoods
Speaker 1: across the US. And so if you really want to
Speaker 1: make America great again, you should make sure that we
Speaker 1: don't go away, because a lot of the brands I
Speaker 1: mentioned will go away.
Speaker 2: All right, Rebecca a somber note to leave that on.
Speaker 2: Would love to stay in touch. Our thanks to Rebecca
Speaker 2: Man Coffee