Overhaul EVP Reveals Which Businesses Are Most Vulnerable To President Trump's Tariffs

Forbes Breaking News

David Warrick, EVP at Overhaul, joined Brittany Lewis on "Forbes Newsroom" to discuss which businesses are more vulnerable to President Trump's tariffs.

Transcript

00:00And companies, I feel like, have layers upon layers now of this uncertainty that they have

00:05to kind of juggle with, hey, we're looking at negotiations and we're seeing how that's going.

00:10Hey, we know that President Trump really on a dime can pause, stop, threaten tariffs really

00:16on any country he wants. And that's what he's been doing for now. Plus, on top of this legal

00:20battle of are the tariffs unlawful? Are they not? And as you said, there are other ways President

00:25Trump can impose tariffs. So even if this is deemed unlawful, he can go about it another way.

00:31So do you think or are there certain industries rather that are more vulnerable right now than

00:36other ones? I mean, I think that obviously anybody who is very dependent on manufacturing in China

00:43has really been feeling the pain and has been going through a lot of challenge. At the same time,

00:51I do feel that the small businesses are going to feel the biggest impact. And this is across

00:58the board. In food and beverage, for example, the small business community just don't have the same

01:05buying power. And there's countless examples of small wine importers, toy importers, clothing

01:13and apparel importers. There's numerous stories of great entrepreneurial ideas have put together

01:22small businesses. And suddenly their prices over the last eight weeks have doubled, tripled or gone

01:29just completely to a level where they're not going to be able to produce. And this is buying raw materials

01:38even to bring those into the US to be able to finish them. And there's countless small businesses

01:43are being impacted. It's really hard for them because they don't have the financial wherewithal

01:49to be able to, you know, do too much of the hurry up and wait. They don't stockpile, they're not able

01:55to stockpile inventory, and they're going to be susceptible to whatever the price point is on any

02:01given day. That's where we're going to, that's where we're already starting to see some pain.

02:06And that is going to, that is going to continue until we get some level of balance in these trade

02:12negotiations. And I think something we've seen really in the past two months is that President

02:17Trump isn't just changing and slightly tinkering with trade agreements with a few countries. I mean,

02:22he is completely uprooting global trade as we know it. So from that lens, do you think this changes

02:29what small businesses and the small business community looks like forever?

02:33I think it's definitely a shock. I think it is, you know, the equivalent of a, we would call it a

02:40gray swan event. But, you know, small businesses grow up through immense creativity. And, you know,

02:48I was having a conversation around, you know, the, you know, restaurants and how the restaurant

02:54business, you know, could be impacted. And it really goes to, okay, there's going to be a, you know,

03:00a higher price potentially for certain goods being brought in from Mexico or from Canada.

03:07How does a small business like a restaurant, a family-owned restaurant, how do they cope?

03:11Well, they now have to think about different things. It may be you have to create different

03:15menu options. Maybe you have to create another unique identifier in terms of your customer service.

03:20So there's different ways that small businesses have to think. They have to adapt. They have to change.

03:26And that while maybe unfortunate, that's how they were created in the first place. They saw a need

03:32and they were doing something to be able to actually supply and delight customers with that need.

03:38So I think in the natural evolution, more of that will happen. They will go down that same path.

03:44Only this time it's been because of a forced change. So I do not in any way doubt the creativity

03:50and the innovation that is available in the small business community. Now it's being put to the test

03:55yet again, to be able to this time survive.

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