Trump pauses China tariffs, but will businesses still feel the pressure?

Businesses, consumers, and Wall Street have been closely watching the latest volleys in the trade war between China and the U.S., and it looks like President Trump has declared a cease fire – at least temporarily. At the G20 conference in Osaka, Trump announced that additional tariffs will not move forward, while negotiations with China's Xi Jinping resume.

In 2016, then-presidential candidate Trump campaigned on the promise of leveling the playing field when it came to international trade deals.

Once Trump was elected president, he forged a path to keep his trade promise. NAFTA has been scrapped and replaced, and now Trump is pressuring all trade partners, including Japan and Germany, to work with him on negotiating fair trade deals with the U.S.

Unfortunately, not all countries are playing ball.

When China refused to meet Trump halfway, the president imposed 25% import taxes on $250 billion in Chinese imports, then upped the ante by threatening to tax another $300 billion in Chinese products.

In turn, China levied tariffs on $110 billion in U.S. imports, focused on agricultural products, hitting Trump supporters in the U.S. farm belt especially hard.

Trump’s tariff play is a negotiation tactic. This we all know, but how is this “negotiating tactic” affecting small businesses in the U.S.?

Big business seems to be absorbing the effects of the tariff war, passing along the costs to consumers, but what about those mid-range or small businesses? How are they dealing with the fall out?

Costs are also being passed down to their customers, forcing companies of all sizes to raise prices on consumer goods.

This is especially the case for electronics and technology companies that import smartphones, laptops, and tablets almost exclusively from China and other Asian countries.

Here in South Florida, tech companies are already feeling the pinch.

Take for example Q Link Wireless of Dania Beach, Florida, which supplies low-income Americans with smartphones that are subsidized by the federal government through the Lifeline Assistance Program.

With more than 2 million customers, Q Link is the third largest government-contracted company, and according CEO Issa Asad, his company will be “deeply impacted by Trump’s tariffs on China, as will his millions of customers.”

“Make no mistake, tariffs on Chinese goods amount to price hikes on practically every line of consumer goods -- including popular electronics like laptops, tablets, and smartphones – to the detriment of the companies that manufacture them in China,” said Asad. “Recent research has shown that consumers are already feeling the effect, and will continue to shoulder the burden of this counterproductive cost hike.”

Will the apparent U.S.-China tariff truce last? Eleven rounds of talks have not been successful, but maybe number twelve will be different. “We've had an excellent relationship but we want to do something that will even it up with respect to trade,” President Trump said following the G20. And he shows every intention of sticking to his guns and pushing for “two-way” trade deals that will benefit all Americans.