Keith Johnson is Chief Creative Officer at Elope, a Colorado Springs company that designs, makes and distributes costumes and accessories like knit caps.
“Just a simple panda,” Johnson said as he modeled one such cap. “This is a good one for China because this is China’s national animal.”
Elope stands for “Everybody’s Laughing On Planet Earth.” But Johnson is not amused by the new U.S. tariff on goods from China. That’s where Elope manufactures all of its 1,000-plus products. The first wave of tariffs started at 10 percent and will climb to 25 percent on January 1st.
“You do the math,” Johnson said. “That’s a lot of tariff on one hat. So if a hat costs $4, we’re paying over $1, it’s too much. It makes it very difficult to stay competitive and to keep manufacturing.”
Salewa North America, based in Boulder, Colorado, manufactures a range of outdoor gear and apparel. Its headwear, much of it made in China, has also just been tariffed.
“It’s either going to be a negative financial impact on us or directly on our customer,” said Drew Saunders, Salewa’s North America Operations Director.
Cocona, also in Boulder, develops and sells technology that helps moisture vapor move through clothing and bedding. China is a key export market for that company.
“The products that we’re selling our technology into, those are very much affected by tariffs,” said Jeff Bowman, Cocona’s CEO. “It’ll put a burden on our customers who are bringing goods back into the United States.”
This past summer, those three relatively small companies and many others wrote to the U.S. Trade Representative asking to be exempted from the planned tariffs which, they argued, would affect their livelihoods and increase their cost of doing business.
“Then we’d be in a position to either eat that because we’ve pre-sold those goods to our retailers and our customers, or we’d be forced to raise those prices,” Saunders said.
Johnson also said their customers are already complaining that prices are too high. He employs 50 people and worries that retailers he sells to may start manufacturing these items themselves.
“I would say yes that it definitely puts us in jeopardy because it just becomes harder and harder to do business,” Johnson said.
Salewa’s Drew Saunders, who employs 15 people, said his company may have to move its supply chains out of China if the tariffs last much longer.
“It’s not necessarily an easy thing to do,” Saunders said.
Cocona’s Bowman, who has 20 employees, worries about the viability of his firm and said he won’t be the only one feeling pain.
“Ultimately who loses?” Bowman asked. “Those people who are cutting and sewing in China, they’re losing.”
The three companies aren’t opposed to U.S. trade policy in principal, but hope the current disputes don’t last much longer.
“They’re squeezing out these businesses that are employing people in America,” Johnson said.
“We’re very concerned but we’re also taking a wait-and-see approach to see how it plays out,” he said.