Business, Politics, and Religion – 301 Punitive Tariffs
I’m sure this article will offend 13 people or so. That is not my intent. I need to share my journey and voice my concern. Maybe even garner support for small business owners like me all across America working hard, obeying laws and yet being financially penalized by my own Government. I have reached out to (via email & Twitter) Our President, Joe Biden, the Director of the National Economic Council, Brian Deese, and US Secretary of Commerce, Gina Raimondo, as well as Colorado Senators -Hickenlooper & Bennet, small business groups in both the House & Senate, and US Trade Representative, Katherine Tai (links to Twitter handles), but my voice has only fell on deaf ears.
You see, I have a dream...the American Dream. As a Native-American & Mexican-American, I grew up as an Army brat. I was born in Germany and saw my dad advance in rank and respect amongst his peers. After his 20 years of military service, he ended up working for Veteran Affairs in upper management. My parents taught me to ask questions, gain a skill set, work hard, serve others, love our country and chase my dreams.
While in college I took a 2-year break from my studies and served as a missionary for my faith (The Church of Jesus Christ of Latter-Day Saints) in Taiwan. I learned a few things while I was outside of the country. The world is much bigger than me. I have a giant world of brothers and sisters, and you love those you serve and work with. This experience had a huge impact in my life. I ended up with a 2-year technical degree and a couple of bachelor’s degrees - Asian Studies and a Mechanical Engineering. I love the Asian culture. I love the Asian people. ...and I really like math, too.
Fast forward a few years; I quit the “comfortable” 8-5 job and chased my dream. I started Outdoor Element. Initially, I wanted to create and manufacture each of the products I designed here in the states. I currently make a couple of things state-side but largely, the numbers don’t support domestic production. (Every couple of years we get new quotes in the US and regrettably the numbers don’t work.) It was a natural path for me to reach out to my extended family tree in Asia.
I ate away my life’s savings with developing and tooling products, filing patents (US & International), and purchasing small production runs. I am still very hopeful this investment in myself and my small business will pay off, despite the incredible hurdles my own government has imposed on me with tariffs.
Quick background on tariffs:
In 1995, the World Trade Organization (WTO) took the place of the General Agreement on Tariffs and Trade (GATT) knitting 123 countries in an open trade agreement with most tariffs varying from 3-5%. As an intergovernmental organization responsible for regulating international trade, The WTO helped establish reasonable trade rates, levy disputes, build trade capacity for developing economies, and it acted as the arm of cooperation with other international organizations. This WTO promoted international commerce and overall global economic growth. The 1995 WTO agreements resulted in lower prices for US consumers because removing high tariffs enabled us to buy cheaper imports. Free trade encouraged greater competitiveness. It also gave the benefit of economies of scale. Then 2018 happened.
In 2018, President Trump and President Xi weren’t getting along. It is my understanding the major issue involved several manufacturers violating Intellectual Property (IP) rights and thus a large tariff policy was placed on American businesses importing goods from China. Likewise, President Xi placed large tariffs on companies importing goods from the US. At the end of the day, I ended up paying an additional 25% for tariffs on the majority of products that I produce. I pay it. I pay it to my US government. Small companies like mine aren’t exempted from these tariffs that are putting many of my colleagues out of business, making it impossible to compete when we don’t have the resources to easily move production. As a small business, I already operate on thin margins. My government has taken my profit-net away from me.
What narrative do I hear?
As a society, we have dehumanized China ...we hate them. We hear that they are evil. I have listened to this from both sides of the political spectrum. I have heard it from mainstream media. Talk about #stopAsianhate. It saddens me. Truth is, China is filled with over a billion people -- people with families, daughters, sons, and grandparents. I know and work with a few of these people. There’s a Pierre, Michelle, Gabriel, and Bella in China who literally treat me like family. I have met their kids. I have broken bread with them. They have joined my family for dinner on my country’s soil. They obey the laws of the land and together, we created commerce with one another. It’s a global economy, and I have discovered a global family. Are there evil people in China? Does China have political ideology that I don’t subscribe to? Yes. Now let’s look at the beam in our American eye. Does evil exist here? Are their political divides in America? Yes. Why have we demonized all of China?
I love these people, I speak the language (albeit, very poorly). It makes financial sense that I produce my products in China because China has the infrastructure built to scale manufacturing. Am I just a casualty of friendly fire? Why won’t my congressmen hear me? Why won’t elected and appointed officials hear me? Does the American Dream still exist? As a Native American this feels too familiar as I try to reach out and reason with government powers, and my voice only falls on deaf ears.
I agree, there needs to be ramifications for those violating IP law. But, why am I being penalized? I am following all the rules. Imposing these tariffs is bad for small business in the US. Small business owners are doing our best not to raise prices. We don’t want to in turn penalize our customers. I feel that I have created something special. I have several patents. I have created commerce. I’d love to pay myself a living wage and give my employees more hours and raises. Yet, I’m financially being held hostage by my own government.
This can change. In my eyes, with over 50 executive orders in play in less than 2 months, this administration has done everything in its power to erase every policy the previous administration set in place, except this one. It must be changed. It’s killing small business.
The high 301 punitive tariffs need to end to save small businesses. At the very least, this administration should bring back the exclusions. Maybe they can have special exclusions for micro-businesses, minority businesses, or businesses that make an effort to have less of an environmental impact. (I have just created a camping recycling tool. I am removing poly bags in our shipments, and I have an R&D project that uses recycled plastics). Regardless, I will continue my journey.
In the meantime, I am encouraged by the efforts of groups such as Americans for Free Trade who wrote an excellent letter to Katherine Tai about this tariff matter. Check out their website. You’ll see how these tariffs are not only hurting small business but they directly impact your pocket book as well.
Thanks for hearing my voice. I’d love to hear your insight and opinion on this topic. Please drop a line…or better yet, go get involved! Join your voice with mine and many others just trying to follow their dream.
Mike Mojica
Founder, Dreamer
If you feel compelled to reach out, here are a few emails and links. Share your opinion with them about 301 Punitive Tariffs and other matters that directly affect the businesses you support and the products you purchase. Together, we can make a difference.
The White House
Brian Deese: Director of the National Economic Council
https://www.whitehouse.gov/nec/
Gina Raimondo: US Secretary of Commerce
https://www.facebook.com/SecRaimondo
Colorado Senator John Hickenlooper:
https://www.hickenlooper.senate.gov/
Colorado Senator Michael Bennet:
Senator_Bennet@bennet.senate.gov
Katherine Tai: USTR Ambassador
media@ustr.eop.gov
Patrick, Thanks for your feedback and perspective. Funny you brought up Nike. I used to think the same thing about them. I have 2 Bachelors (Mechanical Engineering and Asian Studies). In a senior seminar class, I decided to write a paper about Nike and their “work ethics”. I was upset that a pair running shoes cost them $20 to make would cost me over $100 at retail, plus the child labor issues. I discovered Nike was the first large company to have open transparency policies showing their dirty laundry to the world (forcing Reebok, Puma and other to do the same). I also discovered in many many cases, they also subsidized housing and provided a couple of meals a day for the worker. The child labor issue came from high demand where Nike factories would outsource. It was these subcontractors who were violating the agreements. We can argue if Nike chose to cast a blind eye, but I know as an entrepreneur, it’s very hard to keep tabs on every leg of the subcontractors. I started that paper thinking I was going to nail Nike, but I walked away thinking they are taking efforts in the right direction and as they helped establish transparency standards. I can tell you that the factory, that I use does not use child labor (to my knowledge) …but I do. When I host a booth, I will often bring my family. My kids have decided it is fun to try and help dad, so they end up pitching to random strangers. I feel like I am giving them an MBA experience as they choose to help me. I do agree that IP violators need to be penalized (harshly). I feel If my factory and I are obeying the laws, then we should not be penalized. Should we take away rights and privileges from all people in the states if only a portion of us are behaving unethically? It’s a tough question and worth a dialogue.
I totally respect your opinion, and I think those who find unique ways to create product in the US at affordable rates should be rewarded. When I priced out my firebiner in the US it was going to cost me $21 each. If I sell my firebiner into Ace Hardware and choose to only make a $3 profit, Ace would then turn around and typically double the price …so they would sell it for $48. This is common practice as it will allow the brick and mortar to hire employees, pay benefits, electricity, rent, etc, plus have a small profit. (FYI no businessperson would never make a product for $21 and sell for $24, they would go out of business in 2 weeks). Who would buy it at $48 or more? Currently, the firebiner sells for $15 and Ace and REI.
Mike,
Brother, I’m a fellow vet and I hear you. I’m also very aware of the political situation in China and how the CCP takes advantage of those same people you care so deeply about. The fact is, a lot of Americans care for those same people too and want the CCP to act appropriately and responsibly toward their own people. They also want the CCP to stop legitimizing the theft of American intellectual property.
I will ask you this… How can we buy products from China when that country’s totalitarian government uses child labor and forced labor to produce goods? … when the Chinese government, which owns the means of production in their country, also commits U.N.-recognized genocide against an entire ethnic group in their country?
I know for me, it boils down to how I feel about something I purchase when I see the the tag says “Made in China”. Brother, it bothers me. It makes me crazy when major US companies like Nike preach to our own people about social justice while using laborers paid a slave’s wage. I won’t knowingly buy Chinese made products until the CCP comes around.
I will gladly pay extra for similar products made pretty much anywhere outside of China and I’m very happy to pay a premium price for a product made by an American.
I wish you the best but this argument is bigger than you and me – it’s as big as 1 billion people pressed into the service of a greedy, totalitarian government.