While President Donald Trump wages trade war, it’s small- and medium-sized businesses that are in the figurative trenches.
In a recent interview with Port of Los Angeles Executive Director Gene Seroka, Bobby Djavaheri, president of Yedi Houseware, discussed the intricate web of challenges that tariffs have woven around American businesses.
Djavaheri’s family-owned company, nestled in the heart of Los Angeles, serves as a microcosm of the wider struggles faced by small to medium-sized enterprises grappling with the fallout from fluctuating trade policies.
“It all unraveled quickly with the ocean freight crisis, which was magnified by rapidly escalating tariffs,” said Djavaheri.
Yedi, an importer of kitchen and home products, severely felt the tremors that rippled through the global supply chain. With the implementation of harsh tariffs, particularly on Chinese goods, companies like Yedi found themselves at the mercy of unpredictable policy shifts.
Tariffs have not just been a financial concern but a strategic quagmire, forcing businesses to reassess everything from supply chain logistics to inventory management. Djavaheri candidly described the scramble to adapt, saying, “We had no choice but to stockpile inventory in advance of anticipated tariffs, transforming our warehouses into what looked like a scene out of November rather than January.”
Despite these efforts, Djavaheri confessed that the sheer volume of tariff announcements – more than 70 since January – has left even seasoned business leaders in a cloud of confusion.
“The result was an embargo of sorts,” he noted, referring to the 150% tariffs that paralyzed operations prior to a 90-day pause between Beijing and Washington announced in April.
“It’s like a constant roller coaster,” Djavaheri said, capturing the nerve-wracking unpredictability businesses navigate.
For Yedi, the tariff changes have meant more than just rising costs. Djavaheri outlined the competitive disadvantage faced by those reliant on the Chinese manufacturing sector, where alternatives are scant.
“No country outside of China can manufacture hundreds of thousands of high-quality air fryers a year,” he said, highlighting the symbiotic relationship which is now under threat. “You think Generation Z is gonna come work on a production line to make air fryers from seven in the morning until seven at night?”
Djavaheri’s accounts provide a face to the broader tariff struggles.
While large corporations may cushion the blow with their vast resources, it’s the mid- to small-sized businesses that absorb the hardest hits. The heavy financial burden of tariffs has meant stifling the pace at which businesses like Yedi can innovate or expand.
“We’re looking at a very tough year,” Djavaheri said, acknowledging that profits are being siphoned off to cover escalating import costs rather than being reinvested in growth. The tariffs have meant “hundreds of thousands of dollars going to the federal government from my pocket, not from the Chinese, as the president has suggested.”
The conversation unveiled how the company’s strategic operations transformed into a high-stakes juggling act, balancing inventory management against an unpredictable tariff environment.
Djavaheri described his pivot towards what he termed “SKU normalization,” focusing only on products with better turnover rates to mitigate tariff-related losses.
“We’ve been practicing SKU normalization in the sense that we carefully pick and choose what SKUs to bring in that we can turn at a better pace,” he said, emphasizing a pragmatic response to the turbulent economic climate.
These tariffs not only affect businesses but ripple out to impact employment and prices for consumers. Djavaheri illustrated a deep personal commitment to his team, expressing a readiness to “close up shop before letting any staff go.” It’s a sentiment that underscores the familial nature of small businesses and the interconnected lives dependent on them.
As Seroka pointed out during the interview, uncertainty has become the new norm, unsettling markets and straining the capacity of supply chains to effectively plan ahead. With the National Retail Federation forecasting a significant dip in cargo volumes, the concern is not just local but stretches into international markets that rely on logistics facilitated by Los Angeles and other U.S. gateways.
The conversation also touched on how the fluctuation in trade policies impacts not just commerce but the broader economic fabric, including consumer experience during major shopping seasons. An illustrative instance was shared by Djavaheri regarding retailer TJ Maxx’s recent alert that “Christmas is in jeopardy,” a stark wake-up call about the cascading effects of persistent tariff hikes.
For many in Djavaheri’s shoes, lobbying and advocacy seem to be the course left in a bid for clarity and reprieve. Engaging politicians and highlighting the realities faced by American businesses under these trade restrictions has become part of his strategy, although, as he admits, the road to tangible change is long and paved with bureaucratic challenges.
Djavaheri recalled an exchange with a U.S. senator who shockingly stated, “[t]he president doesn’t make mistakes,” underscores the disconnect between policy decision-makers and the on-the-ground reality faced by businesses.
Still, Djavaheri remains candid about the toll on smaller and medium-sized businesses.
“Short pain for the long run, is gonna be better off,” he stated, echoing sentiment within certain political circles. However, he quickly questioned what constitutes “short” and what the “pain” truly entails, considering its grave implications on businesses like his.
“This issue is not gonna discriminate against any American. It impacts all of us.”
Find more articles by Stuart Chirls here.
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