SPRINGDALE, Ark. (KNWA) — When you walk around Sam’s Furniture in Springdale, you’ll notice “Made in the U.S.A” tags stuck to several of the products, but it only tells part of the story.
Each and every item sold in the store has at least some element from China, whether it be a cushion spring or an entire dining room set.
“We’d love to say that everything was made in the U.S. 100%, but it’s not realistic in today’s world,” said store owner Joe Donaldson.
Donaldson is a proud Republican and supporter of the Trump Administration but acknowledges he now has to pay extra for his inventory because of tariffs the United States has imposed on China.
In September 2018, the Trump Administration imposed a 10% tariff on $200 billion of Chinese imports then in May of this year the U.S. increased the level of tariffs on those same goods from 10% to 25%.
When the tariffs were at 10% Donaldson said he absorbed the extra costs, but with the additional 15%, he said it wasn’t possible. “I didn’t pass that full effect onto my consumer. I don’t have a choice but to pass some of it on.”
The way Donaldson sees it is the 25% tariff is a tax on the front end. If he’s invoiced $1,000 on a sofa he marks it up to $1,599 retail. With the 25% tax he now pays $1,250 on the sofa so to get his same margin of markup to pay his overhead he said he’s forced to increase the cost the sofa to $1,899 or higher.
“We’re having a little squabble with China because we’ve been treated very unfairly for many many decades,” said President Donald Trump.
Trump said there’s good to come from the tariffs because higher costs on Chinese products will inspire people to buy goods elsewhere. He hopes it means items that are manufactured in China will instead be made in America.
One person who’s doing that is James Smith. Smith is the owner of Springdale-based company James+James Furniture.
“You’re able to support local craftsmen and women in our community, help us create jobs and also the wood, the things that we buy sustainable are domestically produced, we’re supporting those people as well,” said Smith.
However, Smith said he has not had any new shoppers as a result of the tariffs. “I can’t say that we’ve seen any particularly noticeable lift that we’re attributing to these tariffs whether it be competitively or not.”
As the trade war continues, it’s costing families and businesses thousands of dollars. Economist Mervin Jerbarj worries it will cause a recession.
With a larger burden going to American families, Jebarj said they’ll be forced to stop spending as much. In fact, he said the tariffs wipe out any money you may have gotten from the Trump Administration’s tax plan that went into effect at the start of 2019.
“The tariffs that we’ve already imposed on Chinese products last year added about $800 to the average American household in additional costs, with this it’s going to go up to about $1,200 annually,” said Jebaraj.
The president disputes these tariffs are having any negative effects on the U.S. economy. In mid-August, he essentially re-ignited the trade war with the communist nation by promising $300 billion worth of Chinese goods would be slapped with a 10% tariff.
“I’ll see these economists saying give up on china. China’s been ripping this country off for 25 years, for longer than that and it’s about time whether it’s good for our country or bad for our country short-term, longterm it’s imperative that somebody does this,” the President said.
Even with no resolution in sight, Donaldson is already planning for the trade war’s end. “If [tariffs] were to go away tomorrow the first thing I’d do is run one really big sale.”