During a Senate Small Business Committee hearing on Wednesday, Sen. John Hickenlooper (D-CT) spoke about the impact that President Trump's tariffs may have on small businesses.
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00:00Next, we will move to Senator Hickenlooper for five minutes of questions.
00:06You are recognized.
00:07Thank you, Madam Chair.
00:09As someone who I was a small business person, I had an SBA loan.
00:16What is the average length of process for a loan?
00:20So when I did it, it took about a year, 11 and a half months.
00:25My understanding is it takes about 8 to 12 months now.
00:30Senator, first of all, thank you for your leadership in small businesses.
00:35I commend all of our small business leaders for what they do for Main Streets.
00:41I will say that the loan process has improved because we've restrengthened the SOP back to what it was,
00:50making it more predictable for our lenders.
00:52No, I get that, and I admire that, and I admit that,
00:55but you're giving us statistics of the first 100 days
00:58and saying you've given all these loans got completed.
01:01Those loans were all started under Biden.
01:04And if you look at Biden's first 100 days,
01:08those loans were all started by President Trump and his previous administration.
01:13So to say that they're up 80% is flipped.
01:17In other words, those loans take at least six months to close.
01:23So you're closing loans that were started by Biden,
01:26and he was trying to close loans with a lower number that were started under Trump.
01:30But these are actually based on closings.
01:33No small business would close on a loan that they didn't believe that could invest and grow in their business.
01:37So the closing rate during the term is incredibly important.
01:42It's a vote of confidence.
01:43No small business is going to take out a loan if they don't believe the conditions would support its improvement.
01:47The number of closings, and I appreciate that,
01:50but the number of closings is based on how much work has gotten,
01:53how many you've gotten in the pipeline,
01:54and that all happened in the previous administration.
01:56I worry also, like Senator Markey, in terms of the cost of tariffs to small business.
02:05All I hear about when I'm in Colorado is that they can't find,
02:09it's not just the components of what they're putting together,
02:12their entire supply chain is at risk.
02:17And again, raising the caps on the 7A, I think that's a great thing,
02:21but that mostly helps larger small businesses.
02:24The little guys are struggling.
02:25It took me four years before I was able to qualify for an SBA loan.
02:31We've got a lot of outdoor recreation industry in Colorado.
02:35It's really all across the country now.
02:36It's a $1.2 trillion industry, and they're kind of freaking out.
02:41If you look at the running, hiking, hunting, fishing, boating, kayaking,
02:47so much of that industry, and it's a very broad industry,
02:50but a lot of it is apparel and footwear.
02:52And when you talk to almost every one of them, they are largely manufactured in Asia,
02:57not so much in China anymore.
02:59They're manufactured in Vietnam and Cambodia and Bangladesh.
03:02I mean, people have been moving away from China like crazy over the last number of years,
03:07the last six or eight years.
03:08The margins are too thin to really genuinely imagine we're going to bring back both the supply chain
03:18and the actual manufacturing in the United States.
03:20The margins are paper thin, and it seems like a more useful thing to do would be to work with the Caribbean,
03:26what they call CAFTA, but it's the trade association in the Caribbean,
03:33or with either Mexico or Canada, more likely Mexico, for some of this footwear and apparel.
03:40Is that something you see in the future?
03:42Senator, what I see in the future is advocating for American jobs and American industry,
03:49which is exactly what President Trump is doing.
03:51This is why small towns like I'm from, a town of 600, have been hollowed out because of the loss of manufacturing.
03:58You may not think a job making socks is a good job.
04:01I just met a manufacturer last night at a small business roundtable.
04:05They love their job.
04:05They love their factory.
04:06It's a small factory.
04:08They do great things.
04:09It's textiles made in America.
04:11We have microchips being made in America now.
04:13We can make things in America, and this narrative that we can't make things here affordably
04:18is absolutely demonstrably false, and it's not about big manufacturers.
04:22I've been to great manufacturers with less than 50 employees who will benefit from this upsized loan program.
04:27No, no, I get it.
04:28I am a small business person.
04:30I am born of that ilk, and I am part of that ilk,
04:34but everyone I talk to is in a state of terror that they feel they will not be able to get through this whatever is 18 months.
04:46It could be two years, four years.
04:48When you're looking at, even if we go to a 10% tariff, for truly small businesses, that is an unsupportable burden.
04:54It puts their entire business at risk.
04:57It's something they, in many cases, have worked their whole lives to get the opportunity to start and to create,
05:03and now suddenly they're going to get the rug pulled out from under them for something they have no control over.
05:08And I'm not sure I see the benefit of that 10% tariff,
05:12which essentially it's got to be paid in raising prices or lowering your sales.
05:18You're just going to have to raise enough prices and accept the fact you're going to have those lower sales.
05:24In either case, the public is going to pay for it one way or another,
05:28either have less things to buy or a higher cost.
05:31And to what purpose, right, to do a big tax cut?
05:34I'm not sure.
05:35I don't see the benefit.
05:38Senator.
05:40If you'd like to respond, Administrator.
05:42Our small businesses have been the victims of unfair trade policy for decades.
05:49They have had to compete against unfair non-tariff and tariff trade barriers.
05:55We have to level the playing field.
05:56It's absolutely fair to them.
05:58But the number one thing I hear right now is small businesses need Congress to pack this tax reform,
06:04this tax cut bill.
06:06And that is the number one thing, small businesses.
06:08That would be an immediate tax increase that would raise taxes on small businesses
06:13higher than what small businesses in China pay the Chinese Communist Party.
06:17So that is the number one thing I hear.
06:19I understand there are short-term impacts during this critical period of negotiation
06:23with 75 countries that is going to make trading fair for all.
06:27And these small manufacturers are delighted that they're finally going to be able to compete on a level playing field.
06:32Okay.
06:33Thank you, Senator Hickenlooper.
06:35And thank you for mentioning socks.
06:37We do make socks in one of my very small, rural Iowa towns in northeast Iowa.
06:42We have a sock manufacturer in Colorado.
06:43Do you have a sock manufacturer?
06:45Smart war.
06:45Love it.
06:46Smart war.
06:47Smart war.
06:47Smart wars.