Speaker 1: So the International Monetary Fund just announced that California is
Speaker 1: the fourth largest economy in the world. Only Germany and
Speaker 1: China in the United States have a larger economic output
Speaker 1: than the state of California. That's the good news. The
Speaker 1: bad news is there's no state in America that is
Speaker 1: more impacted by uncertainty and these tariffs imposed unilaterally by
Speaker 1: Donald Trump and the Trump administration. The impacts of that,
Speaker 1: of course, are felt small businesses, medium sized, large businesses, consumers,
Speaker 1: as well as supply chains, not just in our state,
Speaker 1: but all across this country and around the world. So
Speaker 1: today we'll be exploring the impacts, real life impacts on
Speaker 1: real people, impacts and states large and small, from Montana
Speaker 1: to Minnesota to here in the great state of California.
Speaker 1: Tune in to this live program on the impacts of
Speaker 1: Donald Trump's tariffs in America. Is Gavin Newsom. Let's talk tariffs.
Speaker 2: Hey, Bath, I am trying to get my phone turned off.
Speaker 2: I just got this phone. I don't know who to
Speaker 2: do it.
Speaker 1: What is an Android or an iPhone?
Speaker 3: It's an iPhone, but it's the new one.
Speaker 1: Good. It's smart to buy it now and not in
Speaker 1: a few months when it's twice the price.
Speaker 3: Won't be twice the price they're exectly from tariffs.
Speaker 1: That's right, because they made a phone call crony capitalism, Beth,
Speaker 1: that's a whole nother conversation, Beth, Thanks for joining us.
Speaker 1: And you're in Minnesota. Where are you exactly in Minnesota?
Speaker 2: I am in southeast Minnesota's and Broda, fifty minutes south
Speaker 2: of the Twin Cities.
Speaker 1: And tell us a little bit about your business and
Speaker 1: when you started it and the impacts of these tariffs.
Speaker 3: Yeah.
Speaker 2: I started my business eight years ago, right after my
Speaker 2: son was born. I had an idea for a baby
Speaker 2: product that solves a problem all new parents have of
Speaker 2: babies just dropping and throwing all their stuff. I made
Speaker 2: what I now know to be a prototype for myself
Speaker 2: and one of my friends who had a baby, and
Speaker 2: she forgot it and said, you should make this thing
Speaker 2: for real, because I didn't realize how awful it was
Speaker 2: until I didn't have your matte thingy. So I invented
Speaker 2: the busy Baby matt It's just a silicon place mat
Speaker 2: that suctions to the high chair and has tethers that
Speaker 2: you can use to attach.
Speaker 3: Babies baby's things.
Speaker 2: Since that time eight years ago, I was able to
Speaker 2: go on Shark Tank and show the world my invention.
Speaker 2: And from that I was able to tell my brother
Speaker 2: to quit his job and join me in the business.
Speaker 3: And two of us have exbanded.
Speaker 2: The product line now to eight products that all have
Speaker 2: the same mission, keep baby things within reach, off the ground,
Speaker 2: at home and on the go.
Speaker 1: I love it. And you source your products from where?
Speaker 1: Where do you get the materials? Where do you get
Speaker 1: most of your supply?
Speaker 3: Yeah, we are one hundred percent in China, one hundred percent.
Speaker 1: And did you look around? I mean, was it China
Speaker 1: first or it just where it's sort of the dominant
Speaker 1: manufacturing occurs.
Speaker 2: No, we actually tried for a year and a half
Speaker 2: to manufacture in the US, and there's a lot of
Speaker 2: obstacles to that. One is the raw material is not
Speaker 2: sourced in the US, so that has to be imported.
Speaker 2: We learned this morning. We've been continuing to find ways
Speaker 2: to manufacture in the US and had a great meeting
Speaker 2: this morning with a silicon manufacturer here in New York,
Speaker 2: and we're still learning more. It's still not viable for us. However,
Speaker 2: we're continuing to try. But the main obstacle is when
Speaker 2: you have a startup, when you are brand new. We're
Speaker 2: not making twenty thousand units. We're not making two hundred
Speaker 2: thousand units, or many companies a million units. I was
Speaker 2: trying to get two thousand units because this was a product.
Speaker 3: That never existed before.
Speaker 2: I didn't even know if people were going to buy
Speaker 2: this item. I knew it was a good idea, but
Speaker 2: I didn't know if my fellow Americans would think it
Speaker 2: was a good idea. So there were no American factories
Speaker 2: that were willing and able to do this project on
Speaker 2: such a small scale to start, so we did have
Speaker 2: to start in China.
Speaker 3: They were willing to do that with us.
Speaker 1: And so the impacts are immediate. The one hundred and
Speaker 1: forty five percent tariffs, I mean, I mean, what has
Speaker 1: that meant? I mean, is there sort of a dollar figure?
Speaker 1: Do you recall that first invoice purchase order? Came back
Speaker 1: and looked at that delta, and how do you respond?
Speaker 3: You know, it's more immediate than that. I could literally
Speaker 3: lose my home.
Speaker 2: In less than three months, So I'll walk you through
Speaker 2: that real quick. This last six months has been amazing
Speaker 2: for US. I got a contract with Walmart. I got
Speaker 2: a contract with Target. We're in both stores now. Minnesota
Speaker 2: awarded me SBA Small Business Person of the Year. It's
Speaker 2: been a really sunshiney last six months. I booked my
Speaker 2: flight with my eight year old son to take him
Speaker 2: to DC to get this award on May fifth, and
Speaker 2: then nine days later, as my products were two day
Speaker 2: shy of being picked up to put on a container
Speaker 2: to come to the US, these tariffs came out. The
Speaker 2: announcement came out. So what I was expecting to pay
Speaker 2: twenty maybe thirty thousand dollars worth of tariffs, that's what
Speaker 2: I budgeted for now is going to cost me two
Speaker 2: hundred and thirty thousand dollars to bring into our country.
Speaker 2: I have made maybe two months worth of inventory left
Speaker 2: in in my warehouse here, and when that has gone,
Speaker 2: I have no more revenue. I have no money coming
Speaker 2: in to pay my employees. I have no money coming
Speaker 2: in to pay my bills, the other American businesses that
Speaker 2: I support through my company, my marketing teams, my bookkeeping,
Speaker 2: my accounting, everyone who helps me run this business, all
Speaker 2: American companies, my transportation team that was going to bring
Speaker 2: that container to me. I can't pay any of them anymore.
Speaker 2: And the worst thing is I can't pay my loan.
Speaker 2: And when I got the contracts for Target and Walmart,
Speaker 2: I took a big, big business risk, and a lot
Speaker 2: of us small businesses do this. I leveraged my home
Speaker 2: to be able to buy the inventory to support these
Speaker 2: contracts because that was the next big milestone step in
Speaker 2: our business. And now I am at grave danger of
Speaker 2: not being able to get my products here, not being
Speaker 2: able to continue to sell and have the cash flow
Speaker 2: that I've counted on, and not be able to pay
Speaker 2: on those loans, which means I could lose my house
Speaker 2: where my children live and my ability to keep them
Speaker 2: safe and feed them.
Speaker 3: That's how real this is for me in this moment.
Speaker 1: I mean, boy, I mean, you paint the ultimate picture.
Speaker 1: I mean, just the deep reality. And you know in
Speaker 1: the fact that it was because of your kids that
Speaker 1: inspired this business in the first place, and now your
Speaker 1: home is a risk. Everything about that is an extraordinary
Speaker 1: picture paint of the pain and anxiety that you're going through.
Speaker 1: I mean, and forgive me. I mean the options for
Speaker 1: you are what then right now? Do you called Walmart
Speaker 1: back and Target and you say can you help? Are
Speaker 1: there is there a strategy there so they float, you know,
Speaker 1: ninety day invoices or something. I mean, is there a
Speaker 1: strategy that you can see an alternative if this continues.
Speaker 2: Right now with those retailers, I actually have their inventory here.
Speaker 2: That's why I had to take that big risk early on,
Speaker 2: was you have to order the products in bulk so
Speaker 2: that I have them here. So every week when they
Speaker 2: place their order, I have something to send them. So
Speaker 2: currently their product is here. That should support us six months.
Speaker 2: With those retailers, I did have the opportunity to expand.
Speaker 2: Walmart wanted to take on another product this year in November.
Speaker 2: I had to call my buyer and say, I don't
Speaker 2: know if I can do that right now. As of
Speaker 2: right now, I cannot add another item. I cannot expand,
Speaker 2: and because of the situation we're in, if I can't
Speaker 2: get my products here, I'm going to have to just
Speaker 2: sell the products that I have set aside for Target
Speaker 2: and Walmart just to get some revenue in the door
Speaker 2: to keep paying my employees. So Walmart's been great. They
Speaker 2: have offered to you know, let's just see how this goes.
Speaker 3: We'll be patient.
Speaker 2: You know, they're not going to push the timelines that
Speaker 2: normally they're very strict to with suppliers. Let's just kind
Speaker 2: of see how this goes for a little bit. And
Speaker 2: you know, they kind of said, we got you, we'll
Speaker 2: figure it out.
Speaker 1: So what did you? And I'm curious, just you know,
Speaker 1: and I don't mean this to be political, it's but
Speaker 1: when Trump was elected, he talked about these tariffs on China.
Speaker 1: Obviously his first first term he advanced tariffs on China.
Speaker 1: So you must have anticipated something, But did this come
Speaker 1: as a complete shock How quickly this happened, the level
Speaker 1: of the tariff, meaning how large it was, give me
Speaker 1: a sense of how you prepared a little bit over
Speaker 1: the course last few months.
Speaker 2: Yeah, Prior to this administration, we didn't pay a tariff. Ever,
Speaker 2: in my eight years in business, we've never paid a tariff.
Speaker 2: We pay taxes, we pay duty, we have never paid
Speaker 2: a tariff for baby items. When the administration came in,
Speaker 2: knowing that they had talked about bringing in tariffs, we
Speaker 2: expected a reasonable tariff twenty to maybe thirty percent, and
Speaker 2: we looked at our numbers and decided we can we
Speaker 2: can support that. It's going to be tough, but we
Speaker 2: can stay live and support that we budgeted for. That
Speaker 2: we did not budget for one hundred and forty five percent.
Speaker 1: No, I mean it, no one can, No one can. Well, Beth,
Speaker 1: I can't impress upon you how grateful I am that
Speaker 1: you had the courage to come on the show and
Speaker 1: thank you for showing up, and not just for yourself
Speaker 1: and your family, for your eight year old and your
Speaker 1: brother and your employees, but for others in your circumstance
Speaker 1: and your position. I think you know, all of us
Speaker 1: out here in California, we're not only rooting for you,
Speaker 1: we have your back. We initiated a lawsuit to push
Speaker 1: back against the Trump administration. I mean, even on the
Speaker 1: in the conservative side, the Koch Brothers are aligned in
Speaker 1: that as it relates to the how thisnilateral action by
Speaker 1: Donald Trump is simply illegal, and so we're serting ourselves
Speaker 1: very aggressively in that space. So you can get some clarity.
Speaker 1: But I'm curious, just you know, as you look out
Speaker 1: over the course of the next days and weeks, with
Speaker 1: all that anxiety in your house looming over this conversation,
Speaker 1: I mean, you've got a week or how many weeks,
Speaker 1: how many months do you think you can hold on
Speaker 1: with this level of uncertainty before you just have to
Speaker 1: make a real decision that may be sort of closing
Speaker 1: up shop, so to speak.
Speaker 2: There's no closing up shop for me. I am a
Speaker 2: tenure army veteran. I am not a quitter. I am
Speaker 2: one who adapts and overcomes. We've got about two weeks
Speaker 2: until we need to make critical decisions where we now
Speaker 2: out we'd sell to other countries.
Speaker 3: We babies are everywhere.
Speaker 2: We've lined up some distribution in Australia, in Dubai, in
Speaker 2: South Korea, and Canada. That if if we don't have
Speaker 2: a resolution in two weeks where we can bring our
Speaker 2: products to the US and sell to our fellow Americans,
Speaker 2: then we're going to have to, you know, make that
Speaker 2: decision to sell outside of our country, which is going
Speaker 2: to be much more difficult for us. It's all unknown
Speaker 2: to me. I've had to learn this business from scratch,
Speaker 2: and now I need to learn international distribution like this.
Speaker 3: But I'm up for the challenge if I have to.
Speaker 3: But what I really need is I need our.
Speaker 2: Representatives to stand up for us and stand up for
Speaker 2: Americans in my district. I have a Republican congressmen who
Speaker 2: will not even talk to me. And I was at
Speaker 2: I just watched your podcast with my governor that you
Speaker 2: recently did, and I was actually at the Capitol this
Speaker 2: week for Governor Walls's State of the State address, and
Speaker 2: what I saw broke my heart and has me just
Speaker 2: feeling so depressed because we need our politicians to stand
Speaker 2: up for Americans. When Walts was talking about the achievements
Speaker 2: of our state in the last year, and one of
Speaker 2: them in Minnesota is free breakfast and free lunch for
Speaker 2: our students because science has shown wealth had kids have
Speaker 2: better outcomes.
Speaker 3: This is a great thing.
Speaker 2: One half of the room was standing and clapping. The
Speaker 2: other half of the room was sitting cross armed with
Speaker 2: ugly faces. And I saw the opposite thing on the
Speaker 2: President's State of the Union address, where one side is
Speaker 2: clapping and the other side is pouting.
Speaker 3: And right now, we don't need that.
Speaker 2: We need our representatives to come together for Americans. We
Speaker 2: need Americans to come together. I am feeling so much
Speaker 2: hate from my fellow Americans who think that because I
Speaker 2: make my products in China, that I am evil and
Speaker 2: that I deserve to fail. And where we learn things
Speaker 2: in our lives, you know, my children. I'm trying to
Speaker 2: teach them kindness, I'm trying to teach them love. They
Speaker 2: learn from me as an adult. We learn from our
Speaker 2: bosses and from our leaders. And right now, what we're leading,
Speaker 2: what we're learning from our politicians is to be divided,
Speaker 2: to be hardline one way or the other. And if
Speaker 2: I'm on this side, I can't possibly celebrate something accomplished
Speaker 2: on the other side. And now the American people who
Speaker 2: should be coming together and supporting one another and loving
Speaker 2: one another. I had a woman tell me on TikTok
Speaker 2: that I am going to fail and I deserve it.
Speaker 2: No one deserves to fail. No one deserves to lose
Speaker 2: their house, the roof over their children's home, no one.
Speaker 2: And so you know, I need our politicians to come
Speaker 2: together and support the Americans and stop fighting each other
Speaker 2: and work together for the American people.
Speaker 1: I personally love that in ways you don't even fully
Speaker 1: perhaps appreciate. My first three guests on this podcast. We're
Speaker 1: all conservatives, that we're all supporters of Trump, and I
Speaker 1: made exactly the point you just made. At the end
Speaker 1: of the day, we all want to be protected, connected, respected.
Speaker 1: We can't continue to continue talk down to each other,
Speaker 1: past one another. We're all in this together, we're all
Speaker 1: better off. We're all better off. So I readly. I
Speaker 1: appreciate that sentiment. I appreciate you have no I'm an entrepreneur.
Speaker 1: I love love your entrepreneur passion. The fact you're putting
Speaker 1: everything on the line and putting human face on this
Speaker 1: topic is inspiring. And I ain't worried about you failing that.
Speaker 1: You got that gene, you got that grit that defines
Speaker 1: the best. So thank you Beth for joining us.
Speaker 3: Yeah, thanks for letting me use my voice to stand
Speaker 3: up personal businesses.
Speaker 4: You're here.
Speaker 1: We appreciate you.
Speaker 5: Hey, Jennifer, good morning, Governor.
Speaker 1: Where are you? What's that background? I love it? Oh fabulous.
Speaker 5: I'm in my restaurant. I live and own and operate
Speaker 5: a restaurant in Crescent City, California, which is up in
Speaker 5: Dilnark County. I believe you visited last about a year ago,
Speaker 5: up in this region.
Speaker 1: I used to go up there as a kid with
Speaker 1: my father, and one of the great gifts last year
Speaker 1: is bringing my four kids up there and walking in
Speaker 1: the same footsteps as I walked as a young child.
Speaker 1: There are a few places anyone listening. There are a
Speaker 1: few places on planet Earth that are more spectacular than
Speaker 1: where you operate your restaurant. The absolute physical beauty is extraordinary.
Speaker 1: And so I love it up there, and I appreciate
Speaker 1: you're running a restaurant up there which is in and
Speaker 1: of itself amazing and remarkable. And I imagine with all
Speaker 1: of the uncertainty and announced mins and we just saw
Speaker 1: some new tourism numbers already coming in that show a
Speaker 1: decline in tourism across our state, that these tariffs have
Speaker 1: in an impact on your business.
Speaker 5: Yes, so in the area, just so the listeners know
Speaker 5: where I live. We're up at the very top coastal
Speaker 5: corner of California, extremely remote, extremely rugged and rural, of course,
Speaker 5: and this area is historically economically depressed. We get injections
Speaker 5: of money into this area primarily through tourism. It is
Speaker 5: one of the driving forces. And so most of the
Speaker 5: businesses in this entire county get You know, we have
Speaker 5: booming summers where our population with tourism increases exponentially. Our
Speaker 5: town population is only seven thousand, the entire county population
Speaker 5: is twenty seven thousand. I mean, very sparsely poppedup related.
Speaker 5: We have a lot of trees and rivers, not a
Speaker 5: lot of people. And in the summer, in July, our
Speaker 5: town population can go up to thirty thousand with people
Speaker 5: coming to explore the beaches and so forth. So those
Speaker 5: tourism dollars are what keep this local economy going primarily,
Speaker 5: and every business is affected positively by the influx of tourism.
Speaker 5: My demographic, you know, we we're a small restaurant, we're
Speaker 5: right on the beach. We have incredible local support, our
Speaker 5: local community. Really, they're here for us and we're here
Speaker 5: for them. But there just aren't enough people locally to
Speaker 5: sustain all of our restaurants and hotels and so forth.
Speaker 5: So that influx in the summer keeps us flowing all year,
Speaker 5: even though it's only you know, a part of the year.
Speaker 5: And the tourism, you know, we're expecting a twenty nine
Speaker 5: percent decrease in international tourism in the summertime. Governor, my
Speaker 5: demographic is between seventy five and ninety percent tourists visiting
Speaker 5: my restaurant. And that's not just my restaurant. Those are
Speaker 5: the numbers I have real you know, tangibility in but
Speaker 5: it's every restaurant in this area. And when we take
Speaker 5: up to ninety percent of my cash inflow, decrease it
Speaker 5: by about thirty percent do to specifically and directly because
Speaker 5: of the tariffs. That's something that you know, we're having
Speaker 5: trouble anticipating how we're going to navigate that. And the
Speaker 5: other part of that, of course is cost of goods
Speaker 5: and services. We run a New Orleans you see the
Speaker 5: sign behind me here, New Orleans Cajun and Creole style restaurant.
Speaker 5: So the bulk of my menu we make everything from scratch,
Speaker 5: so we're using you know, whole onions, tomatoes, spices, and
Speaker 5: then a lot of seafood and shrimp is expected to
Speaker 5: go up. We get a farm report forecast from our
Speaker 5: food distributor. Shrimp is expected to increase up to forty
Speaker 5: six percent directly because of tariffs. Most of my menu
Speaker 5: we can expect to go up about twenty five percent.
Speaker 5: This is tomatoes, onion, garlic, spices, just everyday things. And
Speaker 5: while we can adjust, of course, we'll have to increase
Speaker 5: menu prices, as will every restaurant everywhere. So we can increase,
Speaker 5: and that feels it makes me sad for my local community.
Speaker 5: But then when we decrease the tourism coming in, it's
Speaker 5: a double blow, and not just a double blow, but
Speaker 5: has that ripple effect that goes far and wide. If
Speaker 5: I speak only to my community, this rural community, whose
Speaker 5: sports teams you know, Little League and the marching band
Speaker 5: and different things rely on the local businesses supporting them,
Speaker 5: and this economic impact is so far reaching. I'm an
Speaker 5: eternal optimist. I'm always someone that figures things out and
Speaker 5: we look for, you know, solutions. This one is more
Speaker 5: difficult to see our way through it at this time.
Speaker 1: Well, I appreciate you said two things that are important.
Speaker 1: You talked about community. I mean community at the end
Speaker 1: of the day, you it's not something you can manufacture.
Speaker 1: It's a sense of pride. It's that connection to as
Speaker 1: you say, these organizations and your neighbors, where magical moments
Speaker 1: are created in your restaurant and friends and relationships are formed,
Speaker 1: and you're such a big part of that and a
Speaker 1: vibrant part of that. But you also highlighting something that's
Speaker 1: often overlooked, and that is tariff's impact tourism, and people
Speaker 1: don't necessarily connect that dot as easily as they should
Speaker 1: or as consequentially as they must. And when you say
Speaker 1: twenty nine percent, was that analysis that was done by
Speaker 1: your regional chamber or is that on the basis of
Speaker 1: what you're already seeing in terms of decline of visitorship
Speaker 1: that you would otherwise expect this time of year.
Speaker 5: This time of year we would start seeing a lot
Speaker 5: of international tourism, a lot of people from Europe in particular.
Speaker 5: Later in the season we see a lot more Asian
Speaker 5: tourists coming in. But you know, as you said, Redwood
Speaker 5: National Park, which is here, draws people from all over
Speaker 5: the world. We have the mainly one percent of old
Speaker 5: growth redwood, and that is really something to see. So
Speaker 5: my twenty nine percent came from the economic forecast, out
Speaker 5: of the larger chamber anticipation for how that's going to impact.
Speaker 5: And you know, in this rural agent of the region
Speaker 5: of the world that I'm speaking to my county specifically,
Speaker 5: but this whole North Coast is very rural, and so
Speaker 5: there's about five counties that all see the same economic impact,
Speaker 5: and it's this entire northwest region of California, Humboldt County,
Speaker 5: mill North County, Mendocino County, Lake County, Trinity. You know,
Speaker 5: it's a huge portion of the state that is going
Speaker 5: to feel and real from the effects of a lack
Speaker 5: of people wanting to come here directly because of the tariffs.
Speaker 1: So, you know, you've weathered a lot. You got through COVID,
Speaker 1: which is extraordinary. You've got that entrepreneurial energy and as
Speaker 1: you said yourself, and it's self evidence to anyone listening
Speaker 1: you're watching, got such a spirit of positivity. I mean,
Speaker 1: what how do you how do you sort of game
Speaker 1: this out? I mean, what's what's the strategy for you?
Speaker 2: Is?
Speaker 1: Are you looking at potentially layoff so you can only
Speaker 1: pass through so much cost obviously on the customer side,
Speaker 1: if they're not coming in the fixed costs of devour
Speaker 1: even any any variable menu prices, what what's what's what's
Speaker 1: their strategy? What's your How are you gaming this out
Speaker 1: in the next few months?
Speaker 5: Yeah, well, you know it's a day by day what
Speaker 5: where can we pivot? Where can we pivot? Restaurants historically
Speaker 5: have a very tiny profit margin, and as a small business,
Speaker 5: as our most businesses in my community, we don't have
Speaker 5: the luxury that chains have to be able to absorb
Speaker 5: some of that impact because of other stores. So how
Speaker 5: do we navigate that. Of course, you know, increasing as needed.
Speaker 5: We don't like to do that, but things happen. Cutting
Speaker 5: costs wherever we can, cutting labor. You know, we as
Speaker 5: owner operators, we work fifteen hours a day laboring in
Speaker 5: our restaurant and it's a labor of love. I don't
Speaker 5: say that with anything except gratitude, but there are only
Speaker 5: so many hours in the day, and so looking you know,
Speaker 5: it adds more work to the people that we employ.
Speaker 5: So the way we're navigating this is looking at other
Speaker 5: ways we can bring money to the restaurant, so creating
Speaker 5: other events, you know, community events, things like that. Always
Speaker 5: looking at what's working and trying to trim what isn't working,
Speaker 5: really making our menu hyper efficient. We got our restaurant
Speaker 5: two days before the COVID shutdowns and so it was
Speaker 5: a incredible lesson in business management in a very short time.
Speaker 5: And so we've learned to pivot. But that's not always
Speaker 5: easy when things are changing so rapidly, and as we're
Speaker 5: gearing up for our summer season, you know, it's really
Speaker 5: just again becoming hyper efficient, hyper educated. We rely on
Speaker 5: what's called the farm report forecast, so we can look
Speaker 5: at where we can trim costs. You know, at some
Speaker 5: point in the day there's only so much we can do,
Speaker 5: and then we just try to write it out with
Speaker 5: the support of you know, our community.
Speaker 1: Well. I appreciate and I appreciate what you're doing, how
Speaker 1: you are representing not just yourself, but your community and
Speaker 1: others that are struggling with this new reality as well.
Speaker 1: And anyone that gets up to Crescent City and if
Speaker 1: you haven't been, you got to go, needs to go
Speaker 1: to your restaurant. What's the name of the restaurant.
Speaker 5: It's a Schmidt's House of Jambalaya. We're right on the
Speaker 5: beach at South Beach, and it's an extraordinary community. We're
Speaker 5: very thankful to be part of it.
Speaker 1: And go up when you're up there and visit and
Speaker 1: say hello. Really appreciate you taking the time, thank you
Speaker 1: for sharing your insight, and thank you for staying the
Speaker 1: course and being so positive. And we're going to work
Speaker 1: our tail off to try to curtail the impacts of
Speaker 1: these tariffs and lack of I think understand standing of
Speaker 1: the impacts it's having on people like yourself and communities
Speaker 1: all throughout this country, but certainly here in this north
Speaker 1: part of our state. Thank you so much for joining us.
Speaker 5: Thank you, and I just want to add, you know,
Speaker 5: I really feel advocated for I appreciate your leadership. We
Speaker 5: appreciate your leadership and everything that you're doing as a
Speaker 5: voice for the people. Thank you so much.
Speaker 1: I'm grateful. Thank you for joining us. Thank you.
Speaker 4: How you doing, Governor?
Speaker 1: Oh good man, you're well. You're Chino, California, right, Yeah.
Speaker 6: I live in Orange County, California. My company here is
Speaker 6: in Chino. We also have a warehouse and location in Amsterdam,
Speaker 6: in Holland.
Speaker 1: I love it. And so tell us about your business,
Speaker 1: the wheelchair business. Huh.
Speaker 6: So, we are in the durable medical equipment business, primarily
Speaker 6: related to wheelchairs and scooters.
Speaker 4: We provide, you know, the product.
Speaker 6: For people that are either permanently or temporarily disabled, including
Speaker 6: organizations such as Think on my Emails, the Steve Gleason Foundation.
Speaker 6: He was an x NFL football player for the New
Speaker 6: Orleans Saints. So we sell our product were wholesaler, so
Speaker 6: we wholesale them worldwide, and we've been doing this for
Speaker 6: quite some time, about eight years. We're conservably growing company.
Speaker 6: We typically grow about two to three hundred percent perannum. Wow,
Speaker 6: it's a very expensive business. It's not a business that
Speaker 6: is for the lighthearted. So it requires quite a bit
Speaker 6: of capital to operate this kind of company, and you
Speaker 6: have to have a passion for it, which is something
Speaker 6: that myself and all of our team members we have
Speaker 6: a great passion for what we do.
Speaker 1: And Joseph, how many countries are you exporting to? How
Speaker 1: many countries you're working with?
Speaker 6: So because we have the European operation, we can export
Speaker 6: to Belgium, Switzerland, Germany, the UK and of course the
Speaker 6: Netherlands at the moment in America from here we export
Speaker 6: to Canada and parts of Mexico and you know Puerto
Speaker 6: Rico which is still part of part of US.
Speaker 1: So what I mean, so these teriffs are announced, I
Speaker 1: imagine you know, you had to anticipate something might happen
Speaker 1: in this space. Tell me a little bit about that
Speaker 1: thought process. You know, when Trump gets elected, he was
Speaker 1: pretty clear that he was going to move in this direction.
Speaker 1: Did you expect it as quickly? Did you expect it
Speaker 1: as acutely? How has it impacted your business and your
Speaker 1: and your business plan going forward?
Speaker 4: Yeah, so wonderful question.
Speaker 6: We we did have a feeling that this could happen,
Speaker 6: we didn't expect it to be as drastic as it has.
Speaker 6: And the reason for that is based on the fundamental
Speaker 6: sort of principle that our industry has been exempt from
Speaker 6: tariffs since we've had the operation. So even though we
Speaker 6: expected tariffs to apply, we did not expect that they
Speaker 6: would be applied to our industry as we've been exempler
Speaker 6: for all of these years. Nor did we expect that
Speaker 6: if they were going to be applied, that it would
Speaker 6: be as high as they are. So probably about eight
Speaker 6: months prior to this, I had set up a separate company.
Speaker 6: Part of the election of Donald Trump. We had separate
Speaker 6: separate company with the idea that we would manufacture our
Speaker 6: own products within the US, and so we started discussing
Speaker 6: things with even Chinese partners. Meet these partners Mexico went
Speaker 6: down to Mexico many times to set up a Mikhilidora
Speaker 6: down there, thinking that my work went to Texas, went
Speaker 6: to various states. What we realized the governor is that one,
Speaker 6: the cost of operating in America is still extremely expensive
Speaker 6: number one. Number Two, securing and obtaining the materials that
Speaker 6: we require are extremely difficult to find we might be
Speaker 6: able to find some metals, some aluminum, but things like
Speaker 6: carbon fiber or things like lithium. I own batteries, things
Speaker 6: like technology that goes into our joysticks. You know, we're
Speaker 6: sort of a highly you know, automated business to a
Speaker 6: certain extent that relies on technology. And what we quickly
Speaker 6: found is that what we require fired just wasn't available.
Speaker 6: It wasn't available as we needed it, and we thought, okay,
Speaker 6: this is probably something that the United States isn't quite
Speaker 6: ready for as yet. So when obviously the terriffsupply were applied,
Speaker 6: you know, it drastically affects our ability to trade. You know,
Speaker 6: I mentioned in my email that we're working with quite
Speaker 6: a large community that is quite vulnerable, whether it's the
Speaker 6: geriatric community, which someday, as you know, governor we live
Speaker 6: long enough, we might all be in a wheelchair or
Speaker 6: a scooter. But in addition to that, you know, we
Speaker 6: deal with like the Gleaston Foundation, which has you know,
Speaker 6: their members are they have als. We work at a
Speaker 6: mass organizations patients that have Parkinson's et cetera. So not
Speaker 6: only are they in a in a situation help wise
Speaker 6: that is not ideal, but any of these folks just
Speaker 6: don't have the resources, financial resources to secure the.
Speaker 4: Product that we sell.
Speaker 6: And although we are we sell our products relatively and
Speaker 6: expensively compared to the market, it is still you know,
Speaker 6: a necessity for them. And unfortunately, you know, with with
Speaker 6: the terriffs as they currently stand, you know, it's it
Speaker 6: becomes almost an impossibility to be quite honest, you know,
Speaker 6: I'll give you a real number or real numbers. We
Speaker 6: had ordered sort of a few containers here recently that
Speaker 6: were we expected to pay about six hundred grand for well,
Speaker 6: with the tariffs applied, it's now an additional eight hundred
Speaker 6: and thirty thousand on top of that.
Speaker 1: And so let's just want to make that clear. It's
Speaker 1: not from six hundred thousand to eight hundred thousand, it's
Speaker 1: an additional eight.
Speaker 4: More than that's correct, that's right.
Speaker 1: And that and that was most of that product coming
Speaker 1: from China specifically.
Speaker 4: That's right.
Speaker 6: Yeah, that's right. So you know, it's in the day
Speaker 6: eight hundred and thirty thousand. So our choices are and
Speaker 6: in our industry, we you know, I'm not a I'm
Speaker 6: not backed by private equity. I don't have any VCS
Speaker 6: behind me. We are we are operating ourselves. We've grown
Speaker 6: this company ourselves out of our own resources. So you
Speaker 6: know the idea of pain and additional eight hundred and
Speaker 6: thirty thousand when we don't know if these tarifts are
Speaker 6: going to change tomorrow. You know the story, it's been
Speaker 6: up and down. Yes we're going to reduce tariffs and
Speaker 6: no we're not. So it's very unpredictable for myself and
Speaker 6: other companies in my situation. If we fund that money,
Speaker 6: you know, obviously we would need to recover it somehow,
Speaker 6: and unlike a common belief that the exporting company pays
Speaker 6: for these things, it's just not true. I mean, the
Speaker 6: import for us, we would pay that additional amount, and
Speaker 6: then we would have the decision to make do we
Speaker 6: pass it down to our consumer, which is in our case,
Speaker 6: our reseller for World Blae, or do we absorb the costs. Well,
Speaker 6: there's no business that I've been in. I mean, you
Speaker 6: were in the wine business.
Speaker 4: You know this.
Speaker 6: There's no way that the company can operate with an
Speaker 6: additional one hundred and forty five percent tariff.
Speaker 4: I mean, your.
Speaker 6: Operating income is just not there. So you know, it's
Speaker 6: sort of devastating to us to to on many different levels,
Speaker 6: but most importantly on the level of the consumer, particularly
Speaker 6: the ones that we serve, because you know, when you
Speaker 6: when we deal with nonprofits, you know they they have
Speaker 6: a limited budget, and so what it now means is
Speaker 6: that do they not get the chair or do they
Speaker 6: get you know, a third or twenty percent of what
Speaker 6: they require.
Speaker 1: So Joseph, I mean, did you end up making the
Speaker 1: purchase or you just you know, you just you're waiting
Speaker 1: around with all that uncertainty. What'd you do?
Speaker 6: We wait right now because we have sufficient inventory to
Speaker 6: cover us fortund maybe four.
Speaker 4: Months, that's it.
Speaker 6: But you know, with lead times, et cetera, we really
Speaker 6: have to have those containers shipped within the next fifteen
Speaker 6: to twenty days otherwise we're going to run out. So,
Speaker 6: you know, it's it's operating a business obviously, as you know,
Speaker 6: this is not always going to be you know, rosy,
Speaker 6: if it was, probably every way would do it. That's
Speaker 6: just not the way it works, and you're in a
Speaker 6: game that's probably even tougher in mind, but the reality
Speaker 6: is that, you know, you have to kind of deal
Speaker 6: with the cars as they are presented, and right now,
Speaker 6: I think what is hurting many of us.
Speaker 4: In addition to the tariff.
Speaker 6: Is the uncertainty and the you know, for lack of
Speaker 6: a better word, the flip flopping of is it going
Speaker 6: away or is it saying right? And and so you know,
Speaker 6: we have a real urgency in our industry because of
Speaker 6: the necessity to satisfy the demand.
Speaker 1: What do you, Joseph, just out of curiosity? And you know, look,
Speaker 1: when you put everything on the line, all the risk
Speaker 1: you leverage. You talk about how capital in tense? Have
Speaker 1: you just proved that point is where like to you know,
Speaker 1: just those kind of those purchasing orders that you're making
Speaker 1: and the bet you're placing. But how do you how
Speaker 1: do you even talk to your employees? I mean, what
Speaker 1: do you tell these guys? What do you tell your
Speaker 1: folks around you? And as you say, I mean you
Speaker 1: talk about the most vulnerable what you're doing for charities
Speaker 1: and nonprofits, and I think that really paints a pretty
Speaker 1: powerful picture. But what what's the anxiety level within the company,
Speaker 1: within the organization.
Speaker 6: So we're very transparent a lot of the guys that
Speaker 6: you know, I've owned several companies in my career. In
Speaker 6: this particular one I brought in a lot of guys
Speaker 6: that I've worked with for eighteen to twenty years, so
Speaker 6: they're friends there.
Speaker 4: Most of them were either.
Speaker 6: Professional athletes or along the lines of playing at university, baseball, football,
Speaker 6: you name it. So we're all highly competitive, and we
Speaker 6: all our manner of operations were very direct in terms
Speaker 6: of how we speak to each other, so they're well aware.
Speaker 6: And there was a point that, you know, a conversations
Speaker 6: had we said, guys, look, if this, if this is
Speaker 6: the way it's going to be, I cannot promise everybody's job.
Speaker 6: It's just not conceivable, let alone my own, let alone
Speaker 6: my own company, right because if if this were to
Speaker 6: carry on, you know, for the next twelve months or so,
Speaker 6: I just can't imagine anybody in our industry that's playing
Speaker 6: on a level plane field would be able to operate.
Speaker 6: It's just it's just not possible. So it's a it's
Speaker 6: a really concerning thing. And I know I'm taking up
Speaker 6: airspace here, but if you don't mind me just saying, also,
Speaker 6: had we you know, if we had the infrastructure in
Speaker 6: America to do this, you know, in terms of what
Speaker 6: I mentioned earlier, the batteries, the joysticks, the aluminum, the
Speaker 6: ability to do this, and we had the resources of
Speaker 6: being able to kind of operate this business, which I mean,
Speaker 6: it's not inexpensive. You know, it would require several several
Speaker 6: million dollars to operate a manufacturing company. You know, I'm
Speaker 6: not opposed to that. I'm not opposed to actually trying
Speaker 6: this out, but I will say this, given them my
Speaker 6: experience is that even if we were to do that,
Speaker 6: you know, a wheelchair that might cost somebody today twelve
Speaker 6: hundred dollars isn't going to cost twelve hundred dollars tomorrow.
Speaker 6: You know, if we're manufacturing this, it's going to be
Speaker 6: you know, twenty four to twenty five hundred dollars.
Speaker 4: Yep.
Speaker 1: So the bottom line I mean, and I appreciate at
Speaker 1: the end of the day, the bottom line is the
Speaker 1: bottom line, and one ask to soberly sort of understand
Speaker 1: the consequences the benefits obviously of bringing those supply chains
Speaker 1: back home, the opportunities and the jobs creating that. But
Speaker 1: from the consumer perspective, that's that's pretty stark increase in
Speaker 1: a reminder of the trade off as it relates to this. Look, Joseph,
Speaker 1: I appreciate you painting that picture. Thank you, for highlighting
Speaker 1: some real world impacts that are acute and immediate, and
Speaker 1: also just the deep uncertainty as we wait day to
Speaker 1: day and as you suggest, it's you know, it changes
Speaker 1: day to day, the flip flop, the lack of certainty.
Speaker 1: And as a business owner myself and I appreciate that
Speaker 1: reference certainty is the coin of the realm. At least
Speaker 1: you can work around that and you can make some decisions,
Speaker 1: but the inability to make decisions is perhaps to me
Speaker 1: the most stifling, and I think for you, you know,
Speaker 1: I can't imagine the most alarming part of.
Speaker 4: All of this.
Speaker 6: Yeah, no doubt, uncertainty plays a huge part. And you know,
Speaker 6: we were trying to represent a company that is American
Speaker 6: based and grown, and you know, again we take great
Speaker 6: pride in what we do. You know, there's a lot
Speaker 6: of stories here of individuals that have family members that
Speaker 6: require what we do. And it's just extremely frustrating, you know,
Speaker 6: to sort of be in a situation where we've grown
Speaker 6: and developed such a reputable organization and find ourselves in
Speaker 6: a situation that is completely out.
Speaker 4: Of our control.
Speaker 6: Yeah, you know, we're really just we have no control
Speaker 6: over this portion of what we can do well.
Speaker 1: Appreciate it. But you know what, it's the fact that
Speaker 1: you're willing to share that story gives you agency, gives people,
Speaker 1: I think, a deeper understanding of what's at stake. You
Speaker 1: and thank you Joseph as well. You only reinforce the why,
Speaker 1: the why. I'm proud on behalf of you and forty
Speaker 1: million of us. California was the first state in the
Speaker 1: country to sue the Trump administration as it relates to
Speaker 1: his authority on these tariffs. And by the way, I
Speaker 1: am damn confident we're going to win that and we're
Speaker 1: going to get clarity on that in the next few weeks.
Speaker 1: So I really appreciate you willing to share your story.
Speaker 1: Thanks for all the good work, remarkable work you're doing,
Speaker 1: how you're changing lives, for your charitable focus, not just
Speaker 1: for your entrepreneurial spirit.
Speaker 4: Yeah, thank you for that.
Speaker 1: Take care, Thanks so much for joining us.
Speaker 4: You're welcome. Thank you so much.
Speaker 1: Appreciate Hey, Jennifer, Hi.
Speaker 7: Hi, Gavin Nissam, how are you doing.
Speaker 1: I am good where you're in the great city of
Speaker 1: Palm Springs.
Speaker 7: Right, this is correct, this is correct.
Speaker 1: I love it. And tell me a little bit about
Speaker 1: your business when you opened it up, and how you're
Speaker 1: feeling about everything right now.
Speaker 7: Well, thank you.
Speaker 8: Thank you again for taking the time and allowing us
Speaker 8: to share what's happening with small business right now. So
Speaker 8: my name is Jennifer Gold and I'm the founder and
Speaker 8: curator of Grounded Bodyworks boutique while Miss Spa based in
Speaker 8: Palm Springs.
Speaker 7: We're celebrating our thirteenth year this summer.
Speaker 8: And when I started, there was just me and one
Speaker 8: of my massage therapists that I actually taught massage. I
Speaker 8: was the director at a local school for a minute
Speaker 8: and hired her and it was just us for a while,
Speaker 8: and now I have a team of twelve, and goodness,
Speaker 8: it's just been it's been kind of a whirlwind. I've
Speaker 8: learned a lot. Leading up to COVID, I think under
Speaker 8: goodness Obama, our business was grown, growing steadily year after year,
Speaker 8: and then the pandemic hit and that momentum.
Speaker 7: Has just gone overnight.
Speaker 8: Yeah, you know, And if I could take a moment
Speaker 8: to just personally thank you for your support during COVID,
Speaker 8: I took the grant I have the eed Alan I'm
Speaker 8: currently repaying. Made the difference between closing our doors and surviving.
Speaker 1: So thank you, oh, thank you for that. So is
Speaker 1: this I mean, Jennifer right now, I mean forgive me
Speaker 1: for cutting off because I think it's an interesting I mean,
Speaker 1: the fact that you went through that experience in the
Speaker 1: trauma personally, professionally as it relates to COVID. How is
Speaker 1: this moment Does it bring back those memories? Is it
Speaker 1: on par with that? The uncertainty, the impacts to your business.
Speaker 8: It's definitely uncertain. The struggles are very real. There's still
Speaker 8: very real. I can't believe it's been five years. You know,
Speaker 8: we're still recovering. For many of us, it's fragile and
Speaker 8: these tariffs could be the thing that pushes us over
Speaker 8: the edge.
Speaker 1: And how are the tariffs directly impacting the work there
Speaker 1: is I imagine? I mean, we've we've been reading a
Speaker 1: lot all over the national news Palm Springs reaching out
Speaker 1: to Canadians. Two million Canadians last year visited the state
Speaker 1: of California. Palm Springs one of the biggest beneficiaries of
Speaker 1: the number of tourist dollars spent. Has that had an impact?
Speaker 1: Is it more direct in terms of supply chain and
Speaker 1: materials that you're using at the spot give us a
Speaker 1: sense pink the picture.
Speaker 8: Sure, sure, so there's I'd say there's like three three
Speaker 8: caveats that are that I'm experiencing right now personally. And
Speaker 8: then with my business, I'm just on a spending freeze.
Speaker 7: We're afraid.
Speaker 8: I'm afraid to invest As a business owner, I've paused
Speaker 8: all major purchases. I want to invest in growth, but
Speaker 8: right now then certainty is just too great. Our customers
Speaker 8: are also hesitant. Even in an affluent area like Palm Springs,
Speaker 8: people are pulling back on non essential spending that slows
Speaker 8: everyone down.
Speaker 7: I'd love to partner with Hydrofacial. It's a long beach.
Speaker 8: So I'm from Compton, my family's from Quebec. So you
Speaker 8: know what I do with Grounded is I promote all
Speaker 8: these local businesses from la where I'm from, all the
Speaker 8: way to Quebec where my family's from. I'd love to
Speaker 8: bring in Hydrofacial, this California brand and manufacture, but the
Speaker 8: machine costs over a thirty thousand dollars. I'm not about
Speaker 8: to invest in that right now, you know. And then
Speaker 8: I'd say the next thing would be our vendors, even
Speaker 8: like our skincare line is Oseia in Malibu. I'm sure
Speaker 8: you've heard of them, women owned brand based in California.
Speaker 8: Their ingredients and operations are all local, but that doesn't
Speaker 8: make them immune. If griffs increase the cost of imported
Speaker 8: packaging materials glass, you know they have glass, but there's pumps,
Speaker 8: there's lids. It affects pricing. That increase comes to me
Speaker 8: and then it's passed on to my customers. Even if
Speaker 8: we're doing everything right and we shop local. We support
Speaker 8: Californian companies staying sustainable as we can afford to do that,
Speaker 8: but local, I'm sorry, global policy is still hitting our
Speaker 8: bottom line. And third, it's been a very emotional two months,
Speaker 8: but a month and a half saying goodbye to our Canadians.
Speaker 8: You are correct, Ron DeHart our manner just send out
Speaker 8: an email addressing this Palm Springs is amazing. They've been
Speaker 8: really trying to help support Canada. They just hung all
Speaker 8: these banners downtown just to show our support. There's all
Speaker 8: these Canadian flags.
Speaker 7: It's beautiful, but it's been very emotional.
Speaker 8: Every spring we say goodbye to our Canadian visitors. Your
Speaker 8: many have said goodbye for good. Some have sold their homes.
Speaker 8: They're not rebooking. These guests have supported us three years,
Speaker 8: including through the pandemic. Their absence this year is emotional
Speaker 8: and financially crushing. They spend They bring in three hundred
Speaker 8: and two million just to Palm Springs or the Coachella
Speaker 8: Valley alone. Palm Springs is deeply tied to Canadian tourism
Speaker 8: and if we lose our small businesses and are left
Speaker 8: with only big box stores, we'll lose the very character
Speaker 8: of our city.
Speaker 7: I mean, we're still recovering. You know.
Speaker 1: Well, thank you for pinning that picture of Jennifer. It's
Speaker 1: you know, in California, we were launching a multimillion dollar
Speaker 1: campaign to encourage Canadians to come back to Canada. Campaign
Speaker 1: we announced a few weeks ago saying, you know, California
Speaker 1: wouldn't be California without Canadians. But it's the response to
Speaker 1: was interesting. People are very raw and emotional about it.
Speaker 1: And even the California is not you know, it's not
Speaker 1: maybe the most untrumped state in America. The state of
Speaker 1: mind is still a tremendous animus from the damage we've
Speaker 1: done to the relationships up north, and I imagine just
Speaker 1: for you. The emotion is extended to just family you
Speaker 1: have up in Quebec, right.
Speaker 8: I have one aunt left up there. The rest of
Speaker 8: the family moved to the States in the seventies and
Speaker 8: she just couldn't leave her horses day, so's she's still
Speaker 8: up there. But it's really you know, my vendor friends
Speaker 8: were communicating, we're trying, We're trying to make it work.
Speaker 7: I only have two Canadian vendors right now.
Speaker 8: But if I may give you an example, are nail
Speaker 8: so I run a spa, a boutique spa in Palm
Speaker 8: Springs and name we offer nail services in our vendor
Speaker 8: for our nail products. Or in La it's called Cot
Speaker 8: and she's redoing her line. A lot of the packaging
Speaker 8: is from China. So because of these tariffs, I've been
Speaker 8: rethinking do I stick with coat, you know? And then
Speaker 8: there's a line up in Canada called Behind and they
Speaker 8: have a nail line and it's made in Canada.
Speaker 7: But again, I just feel.
Speaker 8: Like I'm going to lose, lose, you know, just trying
Speaker 8: to stay local but make it all work well.
Speaker 1: Jennifer, I really appreciate you putting in a human face,
Speaker 1: your own humanity behind this, and I extend that humanity
Speaker 1: quite literally your support for others in the region, other
Speaker 1: small businesses. And I think it's so insightful and helpful that,
Speaker 1: as you say, even locally made products have packaging components
Speaker 1: and other component parts that they have to import, and
Speaker 1: those costs are burdens that ultimately will be passed on
Speaker 1: to you and potentially your customers. And it's such a helpful,
Speaker 1: I think, insight to understand the impacts, the cascading impacts
Speaker 1: of these terrafts, including obviously the tourism component that compounds that.
Speaker 1: But what you said, I think is the most damning.
Speaker 1: It's just the level of anxiety that you have to
Speaker 1: personally go through, professionally go through, and as a consequence
Speaker 1: of that anxiety and unwillingness to make a big, bold decisions,
Speaker 1: which are decisions often you have to make with some
Speaker 1: confidence about the future and what it will hold. And
Speaker 1: so thank you for sharing your story. Thank you for
Speaker 1: weathering a lot of storms. I'm confident you'll continue to
Speaker 1: and I think it's a big help for those watching,
Speaker 1: in those listening.
Speaker 8: I appreciate that. Thank you again for all your support.
Speaker 8: Couldn't have chosen.
Speaker 7: A better state to be in right now, So thank
Speaker 7: you again.
Speaker 1: We're gonna we're gonna take it to the Trump administration
Speaker 1: and we're going to beat back these tariffs. You watch,
Speaker 1: we have our day in court quite literally coming up
Speaker 1: very surely, Jennifer, thanks so much for joining us.
Speaker 7: Thanks so much, Thank you very much. The Song of
Speaker 7: ADM