Companies juggle Trump tariffs with payroll as recession deepens
[link:https://www.politico.com/news/2020/04/15/companies-trump-tariffs-recession-188637|
Amid the worst recession in nearly a century, a wide range of U.S. businesses hit by President Donald Trump’s tariffs are starting to face an increasingly stark juggling act of trying to keep employees on the payroll while paying staggering tariff bills, some as high as 25 percent.
Every month, Kevin Feig sends the Treasury roughly $300,000 in tariffs to import auto parts that he supplies to national retail chains. He said his tariff bill matches his monthly payroll expenses for the 110 workers he is hoping to keep employed through a federally backed loan from the government’s new Paycheck Protection Program
"Rather than paying U.S. Treasury $300,000 a month and getting a loan for $300,000 a month, you might as well not pay $300,000 to Treasury to begin with. We’re just shuffling money around,” said Feig, executive vice president of Foreign Parts Distributors, a Miami-based company started by his family. “When our revenues are going down but we’re still required to pay a tremendous amount of money on a monthly basis to the U.S. government that is counter-intuitive to the goal of keeping companies like mine in business.”
Feig, who imports much of his parts from China to supply after-market auto supply stores, used to pay about $25,000 per month on tariffs. Then a Trump-initiated tariff war with China ballooned his bill. Feig said he hasn’t had to lay off any employees yet as business remained steady in the first quarter of the year, but he's still waiting to get his PPP loan approved and, with the economy largely locked down, business decisions have to be made on a day-to-day basis.
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