Three months ago, things were looking pretty good for Tim Fulton and Ramper Innovations, a manufacturer of airplane equipment based in Sitka, Alaska.
Mr. Fulton was spending his days inside his workshop doing what he loved: building the company’s main product — a fold-up conveyor belt that unfurls in the belly of a plane to load and unload cargo or luggage. He had an order from the U.S. Air Force that he was confident would serve as a catalyst and bring in new customers from Asia and the Middle East while luring potential investors.
Then, the tariffs from President Trump struck.
The New York Times heard from Mr. Fulton and hundreds of other American business owners who said they have been stunned into paralysis by Mr. Trump’s barrage of tariffs. They are reassessing their product lines and supply chains and even putting their operations on hold.
Mr. Fulton, 66, was floored at the size of the tariffs and how quickly and chaotically they were applied. There were tariffs on Mexico and Canada and steel and aluminum. Mr. Trump hit dozens of countries with higher “reciprocal” tariffs he then put on hold when financial markets crashed. China struck back and the import tariff on Chinese goods ratcheted up to 145 percent.
Even though Ramper makes its products in the United States and buys as much of its components as possible from American companies, there is no getting around the tariffs. Some essential parts, such as motorized and static rollers from Japan, are only available overseas. The raw materials needed to build other critical parts are also imported. Most of Ramper’s U.S. suppliers rely on imports for some part of their supply chain.
Ramper raised its price 17 percent — a ballpark estimate for how much the tariffs would inflate its costs. Mr. Fulton also warned prospective customers that he may need to increase his price further if tariffs pushed his costs up by more than 5 percent. Prospective customers balked at the higher prices and the uncertainty of what the final price might be.
After years of refining and testing his foldable conveyor belt, a robust pipeline of interested buyers disappeared overnight, Mr. Fulton said. Potential investors turned gun-shy, afraid to plow money into a company at the mercy of arbitrary tariff policies.
“I feel like things have ground to a halt,” said Mr. Fulton, who started the company in 2019 after working 38 years as a ramp agent, an airline ground crew member who loads and unloads baggage.
With no orders to fill, Mr. Fulton rented out his home in Alaska and temporarily moved to Brazil, where his wife is from, because the cost of living is lower. And instead of closing deals with investors to raise more money, he is consulting a bankruptcy lawyer.
Businesses are rushing to cancel factory orders or halt shipping containers before they leave China, unable to afford the tariff when the ships arrive in America. They are pausing capital investments and new hiring, and scaling back spending to only the bare necessities. Future products are being scrapped, because they are no longer financially viable.
And the logistics firms, marketing agencies and others in the ecosystem of companies that support small businesses are feeling the sting as the wheels of commerce slow down.
“Everything is stuck and no one knows what to do,” said Kristina Anisimova, who owns SinoImport USA, a supply chain management firm based in Mooresville, N. C.
Ms. Anisimova said one-third of her customers, most of whom work primarily with Chinese factories, are suspending shipping orders, hoping that the tariffs are eventually eased.
She said the unluckiest companies are the ones whose shipments are already in transit, because they no longer have the option of delaying or stopping an order. When their goods arrive in the United States, some of those companies will be forced to pay twice as much as they had budgeted to take delivery of their products.
“When you consider a project, you can see what you have to pay. But in this situation, you cannot predict anything,” said Ms. Anisimova. “And now everything is on pause.”
She said the timing is also bad because May, June and July tend to be busy months for Chinese factories ramping up to churn out products to ship to the United States for the year-end shopping season.
Robb Stilnovich, owner of Premier Columbaria, a supplier of cremation memorials based in Centralia, Wash., said coming off a record year in 2024, his company was considering remodeling its warehouse to store more inventory and buying a new forklift. But those plans are now on hold.
Premier Columbaria’s modular granite memorials manufactured in China are now carrying an import tax of 174 percent, compared to 29 percent last year. He ships 80 to 100 containers a year from China.
Without any certainty in what projects might end up costing, his cemetery customers are choosing to wait and see how things shake out. His future orders were down 97 percent compared to a year ago.
He said one prospective customer had agreed to place an order with a 150 percent markup. Mr. Stilnovich came up with that number based on what his shipping company had estimated weeks ago was the maximum tariff that could be applied. But when the actual rate surged even higher, the customer canceled.
“Everybody just hit pause, and they’re saying ‘Let’s see what happens in six months,’” said Mr. Stilnovich, 53. “If I am down 97 percent compared to last year, I can’t stay in business too long.”
He is also worried about how the pause will affect his longtime Chinese factory partner, who has worked with his company for two decades and has specialized equipment and know-how critical to producing his products. Mr. Stilnovich said he was on his way to Xiamen, in southeastern China, to help manage layoffs at that partner’s factory.
Mr. Stilnovich said he has three containers in transit. He expects to be taxed at 50 percent for two of those containers because they shipped before the latest escalation in tariffs. For the last one, he expects the shipment to carry a 174 percent tariff, requiring him to pay $80,000 at the port.
He said exposure to such unforeseen costs is “devastating” to his company, a family-run operation of 20-plus years. Mr. Stilnovich’s wife takes care of the back office and his brother handles sales. He said they have inventory and projects lined up until August, but then things “drop off a cliff.”
Any pause is especially harsh for small businesses with limited cash flow. They are usually working without much cushion to weather a sudden interruption, and they have less negotiating power to persuade suppliers to hold orders for an extended period of time.
For Mr. Fulton of Ramper Innovations, the priority has become working on deals to maintain some momentum for his company even if the baggage-loading product is no longer made in the United States. He has an agreement with an Italian company that will license his product and make it in Europe for sale in European, Middle Eastern and African markets. He is looking into a similar deal with potential partners in Thailand or India.
It’s not what he envisioned when he invested his retirement funds into the company. He wanted to manufacture in America. Specifically he wanted to prove wrong the naysayers who said making a product in Alaska was crazy.
While Mr. Fulton said he is trying to remain positive and optimistic, he said he is not sure how the company is going to make it.
“It puts a lump in my heart when I allow myself to think about what’s coming down,” he said. “There are these places where I might be able to get a finger hold, but it doesn’t feel like I’m going to be able to pull myself up.”
Source: nytimes.com
