'Public's Going To Pay For It One Way Or Another': John Hickenlooper Grills SBA Head Kelly Loeffler On Tariffs

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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.

Transcript

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.

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