Donald Trump’s trade war with China may actually bring small business owners back to the United States.
The US-China trade war is all about a battle of tech giants. Apple Vs Huawei. The future of mobile devices and even the internet itself is all up for grabs. But, small business owners also have a lot on the line.
One company both small and high-tech just announced it’s moving manufacturing back to the US to avoid the billions in tariffs on Chinese imports, according to Fox Business.
California-based Padego Electric Bikes is the biggest e-bike brand in America, selling 12,000 units in 2018 alone, and is valued around $25 million dollars.
“We think it might be the logical thing to do,” CEO Don DiCostanzo, told FOX Business. “It might be smart now. It might give us a competitive advantage. To tell you the truth, I thought that when I started the company. I wanted to make them here in the U.S., but I found that the rules were against it. Today, that’s changed.”
Small business owners moving ahead of the curve
DiConstanzo also told Fox Business the international trade system has been designed to favor small business owners who manufacturing to China, mostly because of labor costs.
That balance has now changed.
Pedego had already moved much of his operation to Taiwan when these new tariffs hit. But, he’s still been slammed with a 25% tax on his e-bikes and paid more than $200,000.
This is a lot for any small business.
The little known upside of the trade war
You’d think small business owners would be pessimistic about these costly penalties.
“The game changer is our nation,” he said. “And it’s not going to be cheap labor in the future. Everything we’re doing to get skilled jobs with automated factories is going to be the future of labor in the country.”
Small business owners like DiConstanzo believe simply manufacturing to China is the past, and many market experts agree.
Outsourcing low-skill labor to developing countries like China should decrease as standards of living rise and automation replaces workers without technical knowledge.
This may ultimately mean American small business owners like DiConstanzo are forced ahead of a long term curve away from the globalism of the past 30 years.
But of course, there’s still short term pain.
Small businesses owners will need capital more than ever to keep up with this fast-changing economic landscape.
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The front lines of the trade war are all about huge issues like US intellectual property, the future of high-speed 5G networks, and even the actual mineral resources we use to make mobile devices.
But, every business has to keep an eye on the future. And this Trade war has the potential to define it.