Technology: 'Whipsaw' of U.S.-China trade war will force small businesses to close, bike start-up CEO says - PressFrom - Canada
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Technology'Whipsaw' of U.S.-China trade war will force small businesses to close, bike start-up CEO says

19:40  09 september  2019
19:40  09 september  2019 Source:   cnbc.com

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China drafts plan to make it easier to do business China drafts plan to make it easier to do business in the world's second largest economy, from nurturing private enterprises to widening market access, as economic growth slows amid a protracted trade war with the United States. The draft guidelines published by the National Development and Reform Commission (NDRC) include better protection of intellectual property, equal market access and more support for private businesses and small companies as part of wider plans to stimulate the economy.

Small businesses are feeling the effects of the U . S .- China trade war , and some may close because of it, the founder of a bike start - up told CNBC on Other businesses have said it is hard to pack up and move due to supply chain concentration. The bike industry illustrates that challenge, Riley said .

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'Whipsaw' of U.S.-China trade war will force small businesses to close, bike start-up CEO says © Provided by CNBC LLC Guardian Bikes CEO Brian Riley on Shark Tank

Small businesses are feeling the effects of the U.S.-China trade war, and some may close because of it, the founder of a bike start-up told CNBC on Friday.

Brian Riley, co-founder of Guardian Bikes, said on "Closing Bell" that his company will likely be able to overcome its impacts because it has stronger pricing power but not every small business will be as fortunate.

"As somebody that knows what it's like to run a small business, there are plenty of small businesses that won't have as much pricing power and be left out of business living through the whipsaw of these tariffs," said Riley, whose company received an investment on "Shark Tank."

Chinese companies looking to buy U.S. farm products: Xinhua

Chinese companies looking to buy U.S. farm products: Xinhua Chinese companies looking to buy U.S. farm products: Xinhua

Small Business . Investing. Even if China ' s economy weren't so closed off to so many American goods and services, a strong argument has long been made that the U . S . needs to diversify its sources for imports. Just five days after that trade war flare up , the Nikkei business daily reported on Aug.

The US - China trade war is encouraging Chinese companies and government officials to speed up changes that could make the economy more competitive. The waves of new tariffs are also raising questions about China ' s appeal as a manufacturing hub. Companies say they are considering shifting

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The company had been paying a steady 11% tariff on its bikes until September 2018, Riley wrote last month in a Medium post. It increased 10% that month before a 25% uptick in May 2019.

Starting Oct. 1, when President Donald Trump plans to increase the current 25% tariffs by 5%, Guardian will be paying 41% tariffs, Riley wrote at the time.

Guardian has raised its prices by 10% as a result of the tariffs, while it has absorbed the remainder of the increased costs, Riley said.

The result has been less hiring and less investment in innovation, Riley said.

Beijing says millions of tonnes of U.S. soy shipped to China in trade consensus

Beijing says millions of tonnes of U.S. soy shipped to China in trade consensus Beijing says millions of tonnes of U.S. soy shipped to China in trade consensus

It said China had enough fiscal and monetary policy tools and "good momentum" to sustain economic development despite the trade war . Wang said the commerce ministry is investigating reports of delays in customs checks and will make efforts to speed up inspections and reduce costs for importers.

China has accused the US of trade bullying after a new round of US tariffs on Chinese goods kicked in. China has also accused the US of starting the "largest trade war in economic history". The latest move takes the total amount of Chinese imports hit by US tariffs since July up to 0bn.

"In any fast-growing business, the biggest challenge is planning, and cash-flow planning, and the biggest input to that cash-flow planning is your inventory and product costs," explained Riley, who said Guardian is growing by 300% year to year.

"We've really had to be a lot more conservative with our hiring plans and with the amount of money we're putting into things like innovation and marketing and growth ... to make sure we have enough cash on the balance sheet to absorb any of these increases that may or may not happen," Riley said.

Based in Irvine, California, Guardian sells bikes for children with a distinct braking system called SureStop, which it says increases safety.

The U.S. and China have agreed to meet in Washington in early October for the next round of negotiations in the long-running trade war, which intensified on Sunday when the latest rounds of tariffs when into effect.

U.S. trade deficit shrinks slightly; exports, imports fall

U.S. trade deficit shrinks slightly; exports, imports fall U.S. trade deficit shrinks slightly; exports, imports fall

The government is aiming to help small and midsize businesses in particular, which have had trouble obtaining loans and face So far, the trade war has had only a minor impact on China ’ s trillion economy. The move essentially frees up more money for China ’ s state-controlled banks to lend out.

And China says it will invest US trillion into OBOR initiatives, although this could be over an extended period of time. OBOR is a way that And the looming U . S . trade war with China will likely only accelerate this shift. Good investing, Kim Iskyan Publisher, Stansberry Churchouse Research.

The U.S. placed 15% levies on apparel, footwear, consumer electronics and toys. Additional tariffs on products such as smartphones and laptops are set to go into place Dec. 15. Those two rounds of tariffs would collectively affect about $300 billion worth of Chinese imports.

As he has ratcheted up tariffs, Trump has urged American companies with operations in China to leave the country. Some companies have done that, relocating to Vietnam or Thailand, for example.

Other businesses have said it is hard to pack up and move due to supply chain concentration. The bike industry illustrates that challenge, Riley said.

Riley said 94% of bikes sold in the U.S. are made in China. Guardian relies on 40 different companies to supply the 65 parts it needs for its bikes, he said.

"Moving to another country just isn't really an option for us and most people in the bike industry right now simply because it takes a coordinated move of that whole supply chain to move to a different production base, which is going to take years and millions of dollars of investment," Riley said.

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."

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Trump's 15% tariffs on $112B in Chinese goods take effect.
WASHINGTON — The Trump administration's latest round of tariffs on Chinese imports took effect early Sunday, potentially raising prices Americans pay for some clothes, shoes, sporting goods and other consumer goods in advance of the holiday shopping season. The 15% taxes apply to about $112 billion of Chinese imports. All told, more than two-thirds of the consumer goods the United States imports from China now face higher taxes. The administration had largely avoided hitting consumer items in its earlier rounds of tariff hikes. But with prices of many retail goods now likely to rise, the administration's move threatens the U.S.

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