America’s trade wars have forced Robert Luna to raise prices on the rustic wooden Mexican furniture he sells from a crowded warehouse here, while a little further away Eddie Cole has rushed to design new products to offset declining sales of Chinese-made motorcycle accessories.
A little further down the road, Luis Ruiz scaled back plans to add two imported molding machines to his small plastics factory.
“I voted for him,” said Ruiz, CEO of Valencia Plastics, referring to President Donald Trump. “But I didn’t vote for that.”
All three companies are located in the emblem of a globalized American economy: a richly landscaped California industrial park called Rye Canyon. Tariffs are a hot topic here — but experiences vary as much as the businesses that occupy the 3.1 million square feet of offices, warehouses and factories.
Tenants include a company that supplies specially equipped cars to film crews for films and commercials, a dance school and a company that sells Chinese-made LED lights. There’s even a Walmart Supercenter. Some have lost business while others have prospered under the tariff regime.
Rye Canyon is about an hour and a half drive from the vast ports of Los Angeles and Long Beach. And until recently, it was a prime location for globally connected companies like these. But today, being on the front lines of global trade is precarious.
The average effective rate of import tariffs in the United States now stands at nearly 17%–up from 2.5% before Trump became president and to the highest level since 1935. Few countries have been spared the surge, such as Cuba, but mostly because existing barriers make meaningful trade with them unlikely.
White House spokesman Kush Desai said President Trump was leveling the playing field for large and small businesses by addressing unfair trade practices through tariffs and cutting excessive red tape.
‘WE HAD TO WORK TOGETHER’ TO COMPENSATE TRUMP’S DUTIES
Rye Canyon tenants may soon have more clarity. The U.S. Supreme Court, which is weighing the constitutionality of President Trump’s emergency tariffs, indicated on its website Friday that it may issue decisions in the cases discussed when the justices convene for a hearing next Wednesday.
So far, the United States has collected nearly $150 billion under the International Emergency Economic Powers Act. If the measure is overturned, the administration could be forced to refund all or part of that sum to importers.
For some, the impact of the tariffs was painful – but fortunately short-lived. Harlan Kirschner, who imports about 30% of the beauty products he distributes to salons and retailers from an office here, said prices rose during the first months of the Trump administration’s offensive to impose the taxes.
“It’s all assimilated now,” he said. “The price increases passed when the tariffs were being implemented.” Nobody talks about these increases anymore, he added.
For Ruiz, the plastics maker, the impact of the tariffs is more prolonged. Valencia produces wide-mouth containers for protein powders sold in health food stores throughout the United States and Canada. Before Trump’s trade war, Ruiz planned to add two machines costing more than half a million dollars to increase production and introduce new formats.
But the machines are made in China and tariffs have suddenly made them unaffordable. In recent months it has been negotiating with the Chinese manufacturer–reaching a deal that offsets the additional cost of the duties by replacing machines with smaller models and getting a discount in exchange for being willing to let its factory be used as an occasional showroom for the Chinese supplier’s products.
“We had to think about it,” he said. “We can’t wait for (Trump) to go away. I’m not going to let him decide how we grow.”
‘NOW I’M ANGRY AT HIM’
True, there are also winners in these trade battles. Ruiz’s former neighbor, Greg Waugh, said the tariffs are helping his small lock factory. It had already planned to move before the trade war began, as Rye Canyon wanted its space for the expansion of another larger tenant, a repair shop for Universal Studios. But now he’s happy to have moved to a much larger space about two miles from the park, because as his competitors announced price increases on imported locks, he started receiving more inquiries from American buyers interested in domestic products.
“I think the tariffs give us the margin we need to finally grow and compete,” said Waugh, president and CEO of Pacific Lock.
For Cole, a former professional motorcycle racer turned entrepreneur, there were only downsides with the new taxes.
He started his motorcycle accessories company in his home garage in 1976 and built a factory in the area in the early 1980s. He later sold that business and – as many industries moved to cheaper manufacturing in Asia – reinvented himself as an importer of motorcycle accessories with Chinese trading partners, with an office and warehouse in Rye Canyon.
“Ninety-five percent of our products come from China,” he said. Cole estimates he has paid “hundreds of thousands” of dollars in duties so far. He preferred not to reveal the turnover.
Cole said he voted for Trump three times in a row, “but now I’m mad at him.”
Cole even wrote to the White House, asking for more attention to the impact of tariffs on small businesses. He attached a photo of a motorcycle stand made by the company for Eric Trump’s family, who has an interest in motorcycles.
“I said, ‘Look Donald, I’m sure there are a lot of reasons why you think tariffs are good for America,’ but as a small business owner he doesn’t have the ability to suddenly move production around the world to keep costs down like big companies do. It created new products, such as branded curtains, to make up for some of the business lost in traditional lines due to rising prices.
He takes out his phone to show the response he received from the White House, via email. “It’s a standard letter,” he said, noting that it explains how taxes make sense.
Meanwhile, Robert Luna isn’t waiting to see whether the tariffs will be eliminated or refunded. His company, DeMejico, founded by his Mexican immigrant parents, makes traditional-style furniture including heavy dining tables that can cost up to $8,000. It is paying 25% duties on wooden furniture and 50% on steel items such as hinges, made at its plant in Mexico. It increased the prices of some items by 20%.
Fearful that further price increases due to tariffs and other rising costs will continue to dampen demand, he is working with a Vietnamese manufacturer on a new line of affordable furniture to be sold under another brand. Vietnam has tariffs, he said, but also a much lower cost base.
“For me it’s just about surviving,” he said, “that’s the goal.”