Small Business Owner Admits She Is ‘At Risk Of Bankruptcy’ Under Trump’s Current Tariff Policy

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During Wednesday’s Senate Small Business & Entrepreneurship Committee hearing, Julie Robbins, CEO of EarthQuaker Devices, spoke about the impact of President Trump’s tariffs.

Transcript

00:00With that, I will recognize Senator Cantwell for questions.

00:04Thank you, Madam Chair.

00:05So good to see our witnesses.

00:06Ms. Robbins, thank you for being here.

00:09Specifically, we love music in the Pacific Northwest, and we like to get our grunge on

00:15and do many other things.

00:17But, you know, we had a music stand company in Yakima, Washington, that continued to be

00:23a big exporter, and I kept thinking, I'm so proud of you guys.

00:28How do you, they're big supporters of the Ex-Im Bank, you know?

00:31And I kept saying, how are you so successful?

00:33I would think somebody would knock this off.

00:35And they were like, no, no, you're a symphony.

00:38You need performance out of a music stand.

00:41You can't have a big concert with lots of people coming and have a bad music stand.

00:45So you're a similar company that makes electronic parts and turns those into something that musicians

00:55can create with.

00:56So how are you thinking about this tariff situation, and what do we need to do to help

01:02more businesses like you grow?

01:05Thank you so much for your question, Senator.

01:10I was really fortunate that a lot of the investing that I did in our business happened before the

01:14tariffs were increased.

01:16So in 2022, we invested in a state-of-the-art PCB assembly line, and under the current tariffs,

01:25that would be maybe triple in price.

01:28The tariffs have really made it more challenging for us to recoup our existing investment in our

01:35business, and are putting us at risk of bankruptcy if these conditions continue.

01:42We have perfect credit, and we've never missed a payment, but like I said, we're running out

01:47of liquidity.

01:48And our home is collateral on our loans.

01:50So if we miss payments, and we default, we will lose everything that we work for, including

01:56our home, just as our two daughters are in college.

02:00And I don't see taking on additional debt as the answer.

02:03I also don't know why somebody would invest in a company that is currently losing money

02:08without a clear path to success.

02:11I also find the suggestion that I borrow money and pay interest to finance taxes and fees abruptly

02:18imposed on me by the government with no notice and no consideration, I find that suggestion

02:26offensive.

02:27And I believe the tariffs need to be reversed immediately, or at the very least, small businesses

02:34need to be exempted.

02:39Businesses definitely have a lot less flexibility.

02:41Do you have a big export market for your devices?

02:46We do.

02:47We've worked very hard to increase our exports.

02:50They're approximately 30 to 40 percent of our sales.

02:54Although just in the last few months, we have seen that number drop drastically due to anti-American

03:00sentiment and the chaos that the global financial markets have experienced due to this chaotic

03:09trade policy.

03:10You know, I find it takes a lot to become an exporter.

03:15We have, in the Northwest, we had programs in the 80s where we just encouraged everybody

03:20to do it.

03:21I don't know if it was our geography or just an ethos, but we encouraged people to do it.

03:27And it's hard because you're taking a risk anyway as a business person, but you're taking

03:31more risk because now you have less control over it.

03:33That's why we support the Export-Import Bank so much because it lessens that risk.

03:38But we find that ends up being 25, 30, and you're saying in your case, 40 percent of sales

03:44opportunities.

03:45It makes sense.

03:46So what are some of your best markets for exports?

03:52Europe, Australia, Canada, Japan, anywhere that guitar music is popular, guitar-based music,

04:01and where incomes are high enough to afford some discretionary spending.

04:06Okay.

04:07So, friendly countries to us.

04:09Anyway, we should have good relationships with them, and this shouldn't really be the

04:14barrier that it is at this moment.

04:16That's right, but we've offended a lot of our allies.

04:20Thank you so much.

04:21Thank you, Madam Chair.

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