i3 - November/December 2019 - 49

By Deena Ghazarian, founder and CEO, Austere

Policy

G U E ST B LO G

Deena Ghazarian

The Trade War with China Hurts
Small Businesses Like Mine

 E  

Wild Pixel/Getty Images

arlier this year, I realized a lifelong goal and launched my
own company. After more than 20 years in the consumer
technology sector, I started Austere - a home theater
company that combines my consumer tech experience with my
passion for fashion and design.

It's been an incredible experience to create a company and serve as its CEO and
to offer a unique brand to consumers.
But upon finally launching the brand
and putting product into retail stores,
we - like many other tech businesses
and startups - hit a roadblock. It's not
something we overlooked or a flaw in
our business plans: it's the increasing
cost of tariffs and uncertainty the U.S.China trade war is imposing on
American companies, including ours.
My business operates on modest profit
margins - a common approach for
American small businesses trying to get
a foothold in the marketplace. We made
this choice in order to provide quality
products at an accessible price. But the
added cost of the tariffs is potentially
crushing. The fact is, American businesses and workers and families pay for
these tariffs - China does not.
We are among the countless American
businesses now being taxed nearly 30%
extra for every product we import from
China. Still, we have not increased our
prices for consumers. This is a significant
threat to our bottom line, causing us to
reconsider all parts of our business -
from the size of our staff and how many
new people we can hire, to where our
products are manufactured and even our
manufacturer's suggested retail price.
It is indisputable that cheap, counterfeit goods that violate intellectual property (IP) rights have come from China.
One of the products on President
Trump's tariff list include speaker cables.
C TA . t e c h / i 3

For that reason, we chose to have
Austere's speaker cable manufactured
outside China. While I understand and
appreciate that IP theft and forced technology transfer are serious problems in
the U.S.-China trade relationship, as an
American business owner, I know firsthand that tariffs make it harder and
more expensive for me to conduct a sustainable business.
The recent announcement that some
tariffs will be delayed by two weeks is a
welcome delay, but highlights the larger
issue with this trade war - the lack of
certainty American businesses have to
plan for the future. On October 15, I
expect tariffs on Austere products to
increase from 25% to 30%. But, in reality, I don't know whether the tariffs will
go into effect next month, next year or at

even higher rate of 50% to 100%, as has
been recently threatened.
What I do know is that if the cost of
the parts we use to produce our products increases 5, 10, or 15%, it could
mean the difference between hiring new
employees or downsizing; getting in to
new categories or stalling our product
line; or, as a worst-case scenario, forcing
the price increase onto consumers.
Given the uncertainty in the market,
any entrepreneur who is thinking of starting a goods-based company right now will
probably have second thoughts, and I
can't blame them. As a startup CEO, I
worry about my business every day - I
suspect I will 10 years from now, too -
but I didn't think my biggest source of
doubt would be my own government.
I hope President Trump listens to
American business owners like me and
realizes that we need consistent trade
policies that keep overhead costs as low
as possible or, at least, predictable. To
keep our innovation sector thriving, we
need a trade deal with China that protects intellectual property without tariffs
that increase costs for American businesses and consumers.
And if President Trump can't bring
this trade war to an end, Congress must
step in and do something. Until now,
Congress has done little to intervene -
and businesses of all sizes can't afford to
sit back and wait any longer. It's time for
our elected officials to start working on
behalf of American businesses and
American families, so we can bring an
end to this trade war.
I've fought battles for decades amid
fierce competition to reach my career
goal, launch my own company and hire
my own employees. But now, my entire
business is in danger of being a casualty
in someone else's war.
NOVEMBER/DECEMBER 2019

49


https://cta.tech/i3

i3 - November/December 2019

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