Small businesses facing high import costs have to find various ways to handle additional expenditure due to American tariffs.
Facing heavy tariffs on parts sent from China, a small business owner took a hit by renovating more than 1.8 million reward points on his American Express card. Robert Keli, owner of about 33-individual guitar pedal company, Kelly Electronics at Oklahoma City, Oklahoma, told CBS Manivatch that he used points instead of cash to cover the tariff.
This unusual approach, reported earlier BloombergMany small enterprises are facing many challenges in cope with high import duties.
The operation of the keeley is used to create effects for electric and some acoustic guitar in a 17,000 -square -foot warehouse in Oklahoma. But he has been unable to source one of the major components of the paddle, a so -called potentials from anywhere other than China, which balloons the allegations of tariffs.
“We build and build almost every part of the paddle in our factory, including aluminum enclosures and all circuit boards,” Kelly explained the CBS Manivatch. “I really like to build and give someone a job.”
Keli said that her team has tried to find a potential provider of potentials, which controls the voltage outside China, but to no avail.
“We cannot find a source outside China for our potentials, which is important for our designs,” Kelly said. “Even when we call companies in Taiwan, they say they receive them from China.”
$ 11,000 Credit Card Bill
According to Keli, the tariffs on the major component have increased since the beginning of the second term of President Trump in January. His business was on a hook for a 25% tariff by March, when the duties were temporarily shot to more than 100%. Now the company pays a rate of 55% for the potentialometer, he said.
The 90-day freeze on the country-based tariffs, including a place on China, ends on 9 July. Kelly is hoping that the current rate will decrease, but uncertainty lingers. Business experts also say that Mr. Trump can again expand the tariff stagnation if the trade deal has not reached the time limit.
According to a copy of the statement viewed by CBS Manivatch, Kelly’s most recent credit card bill, which included shipping and tariff fees, was around $ 11,000. Instead of paying the cash, Kelly used credit card points, which she earned by paying the previous tariff fee with plastic.
“I decided to use my points because I was not cashing on them for other things like gift cards. So I thought it would be clever to apply them to my bills for tariffs,” Kelly said, seeing that this fee is only a sleeper of their tariff-related costs. “It looks like a lot of points, and it makes you realize how much I am paying in tariffs.”
Kelly insisted that he does not like China on the basis of China for the manufacture of goods of her company, saying that she is described as a “single point of failure”. Although he has not yet raised prices to make up to high cost compensation for customers, the business may not have any option but to do so if stringent tariffs on Chinese imports are in place, they told CBS Manivatch.
“I want to make sure that I am releasing exciting products that want to buy the world,” she told CBS Manivatch. “If I do not pay attention to what I am trying to sell and what people want, I will go out of business. But for now, I am in a stable place.”
