Name: Tariffs and turbulence: What 2025 trade policy means for your ecommerce business
Uploaded: 2025-04-22T20:46:05.227Z
Duration: 1 h 1 min 8 s
Description: Tariffs and turbulence: What 2025 trade policy means for your ecommerce business

Transcript for "Tariffs and turbulence: What 2025 trade policy means for your ecommerce business": Are we on stage, Ashton? Okay. Hey, guys. Sorry about that. We're still, I'm still trying to figure out how to use the system. My name is Tyler. I am the cofounder and CEO of Saltbox, and, it's a pleasure to have you all here, this afternoon for this, discussion with, Angela and Richard. Just before I get started, I'll you'll you'll see two Tylers on stage, but in fact, there's only one. That's me. And the other Tylers there, is a gentleman, Richard, Perez, which I will whom I will introduce, in just just a little bit. So, we are here, to talk about tariffs, which is obviously a topic that is, extremely important to, to to, Saltbox as a company, to our, member companies. I'll also add that it's it's extremely important to me personally, in addition to, my more than full time role here at Softbox, I also own a small ecommerce company, which happens to source its products from China and Vietnam, and so I am quite literally, you know, navigating this situation in real time with so many of you. So excuse me. I'm sorry. You know, over the past, over the past few weeks, I've had a chance. To, you know, my colleagues to talk with, dozens and dozens of Saltbox members about this situation, and to hear, their thoughts and feelings. And I think it's important to note that, you know, there are thoughts, and there are feelings and both of those things are, very important. We're gonna talk about all those, today. We're gonna, you know, talk about the real near term implications of these tariffs, try to make sense of them. We'll get into some history, thanks to Richard being here, about what it's feeling like as a small business owner today and most importantly what we can do, both in the near term and the short term, or pardon me, the near term and the long term to navigate, this situation. We're doing everything we can here at Saltbox to help you all stay, knowledgeable and ahead of, events at the end of the fold. I believe in the chat, you'll find a handful of blog posts that we've published just in the past few weeks, and we'll continue to do so, as the situation evolves. So with that, let me briefly introduce our two panelists. We are very fortunate to have Angela Hawkins with us. Angela is the founder and CEO of Bamboo, which is a eco conscious, bedding, brand. Did I get that right, Angel? Yes. Parts, you know, the bedding is is great too. Angela, has been, is one of the longest standing, Saltbox members, across the country, which is really incredible, and I'm very grateful to you, for that. That being said, you know, she, is experiencing the impact of of these terrorists firsthand and share, some of that experience with us. And then, Tyler Tu slash Richard, is, a director on the board of Softbox, and more importantly, has spent, more than forty years, of a very impressive career, in the logistics industry, most recently having served as the chief financial officer, at UPS, which we all know, and usually love. Yeah. So, with that, we're gonna get started, and I am going to, kick things off, here with Richard. Richard, would love for you, just to take a few minutes to, you know, help orient us at the highest level. You've been doing this, for a long time. You've seen tariffs, come and go, and you you've seen globalization begin and apparently now end. Tell us how you're making sense of, the situation. You know, what's going on? Sure. So, Chris, good afternoon to everybody, and thanks for joining us. So if you look at what's changed, call it, in the last thirty days or so, It really is a rebalance. I don't know if I wanna call it end of globalization, but it's a shift in globalization. And when you think about what is globalization, it's the interconnectedness, the integration of national economies across the world, culturally, societally, as well as, economically. And for the last forty days, you've seen forty years. I'm sorry. You've seen lower restrictions, You've seen reduced cost to do business across borders, and that's what's changed. And, fundamentally, that started the last day with the when Russia and, Wall came down in Germany in 1989. So we've seen a big shift now, and we're gonna likely see a rebalance because because of what has been announced. But what that also means is there's a lot of uncertainty, and I'm sure that's what many of you are feeling. And first of all, there's not a consistent message because one week, the tariffs go in, one week, they go out, they get delayed. They're back in, starting depending on the country, some next week and staff. But, really, the goal is to get manufacturing, if you look at what the administration is trying to do, closer to The US or in The US or better trade conditions with the country that are doing the manufacturing. The bottom line, it's painful, it's real, and it's challenging. And I know every day each of you are feeling that, in your businesses. And so there is an untangling of the supply chain that is happening because of this. And the speed at which you can untangle the supply chain is not as fast as the regulations are going in. And we don't even know what the final regulation is gonna look like because where they stand today by the time some, countries and The US get together, it will change again. What that means is that these business businesses have to think about the short term and long term. And I think as we get into discussion, we can talk about that in a little more detail. Yeah. Thank you, Richard. Richard, your, audio quality is is a little choppy. I'm not sure if there's anything you you can do to potentially improve that, but, we call it Let's see. Is this any better? Less better. Better. Yep. You can stay as close to volume as well. As you can, that'd be that'd be great. Great. So, you know, a lot of volatility, obviously, you know, the the kind of big macro teasers that we think, are unfolding here. You know, if I is is the last I know, I think we are, you know, now facing 145%, tariffs, on, up to 145% tariffs imported on goods imported from China, a a temporary pause on, on, a broader set of tariffs elsewhere while there's hopefully, you know, some, trade deals that are that are negotiated. But, you know, still lots of loosely over. So I wanna, Angela, just switch to you and, you know, you know, we heard a little bit from Richard about the big picture of this, but, you know, tell us, bring us into your world. You you shared with me yesterday, you know, where you were when you learned about this, and I remember where I when I learned about it and kinda, you know, how that felt and what you were thinking and, you know, what's what's happened over, the past couple weeks. Right. It was one of those moments. Right? You know where you were when you heard the news. Yeah. It's crazy. By the way, I mean, is it I don't know. You know, for me, I I I just, it's unbelievable. You know? I don't I don't think that that it's it's like, it is a level of of tariffs that it just don't make any sense, you know, and it almost makes you feel, helpless. Yeah. Exactly. So I had the unique opportunity to be in DC when the, with when the the press conference took place on the Rose Garden. I was, up there for what we call a fly in. I'm part of the, organization, National Retail Federation. And what we do is we, you know, pretty much stand up for small businesses, in Congress or, you know, by lawmakers. So I happen to be at a scheduled fly in when the news, broke. And I also had the, opportunity to be in a meeting with the, administrator of the SBA right before she attended the rose garden ceremony. So it was a it was really, really an odd, kind of juxtaposition of, of events that, you know, that kinda all came together in, you know, in a divine way because I was in a place with 80 other small businesses to get the news at the same time. And that very next day is the day that we had scheduled for all of us to start to, go to different meetings on the hill in in lobby for, you know, against the tariffs and some other things that, are effect affecting small business owners. So we were all on our way to a, an event in the evening before when the announcement was made. So I think we all sat there in the hotel lobby, Malva gasped, realizing what he was saying, what the president was saying as he was, announcing the tariffs and what it really meant to us. And you had mentioned a little while ago, Tyler, that, some of the the the tariffs in China was were up to $1.45. They're actually higher than that for some diff some of the different, categories. So we had a couple of people in the bed excuse me, not the bedding, in the, backpack or or bag category, and their tariffs right now are upwards of 264%. And so these were implemented so quickly that we all knew when when they came down, they and they changed, you know, from the minute they were announced to the next day to the day that they were implemented. They all changed several times, but we all knew that, this was gonna be a huge, shift. You know, you could feel the shift in the room where we all said, okay, what does this mean for us? Because this is something that we've never been, you know, we've never had to account for. No matter what, when you start a business, you're gonna create a risk and mitigation schedule. You're gonna do a SWOT analysis. You're gonna better understand what types of, impacts could happen that could affect your business. One of them is always gonna be government regulation, but no one ever expected that the government regulation was gonna be so swift and so deep. So, the good thing was we were all in the room together so we could all kind of, you know, let it let it out, you know, at the same time we had a united screen, and then it was just like, okay. What are you gonna do? What can you do? Where can I go? You know? And looking at alternatives in terms of where to, manufacture and the time frame in which it was gonna be implemented, you know, what what funding options did we have? Because some of us had product that was on the water, and was that gonna be affected by this new tariff? So there was a lot of things that happened very quickly, and, I don't think anybody expected that amount of shift. Yeah. You know, I think one of the, common but frankly relatively unusual pieces of advice that I hear useful to small businesses is, well, you should just you should just, you know, accelerate your purchasing so that you can get more, you know, more more inventory, more product in the country prior to the tariffs. You you we, of course, know the challenge with that. You know, not a lot of cash around just to accelerate, purchasing maybe by a week or two, but that's not gonna do much for And you still have production. You still have to get through production in most cases. Production. So, Angela, you know, understand that that moment and and indeed, that was a really, kind of an out of body experience, I guess, to be be with the SBA administrator, talking. I'm I'm sure she told you how excited she is about supporting small business, to then, be met with that news. What have you done, in the week since? Have you, have you have you had any discussions with your suppliers? Have you made any changes, in, how you're operating the business? Yes. So we we even made some changes even before the tariffs came about because we knew, if you look back to 2024 before the election, all a lot of businesses, a lot of industries were saying, okay, regardless of where the election goes, if there's gonna be a knowing that comes with the final outcome of the election and that knowing should bring about, some, stabilization in the market. It it if we will bring about some stabilization in the economy, it'll bring about some stabilization in the, consumer confidence. So we all had the the, implication that it was going to be better. So, you know, we started to plan, okay, what does 2025 look like for us? How are we gonna invest in 2025 in order to get the most that we can out of our revenue? And, and that was where we were going. But then when the the final results came about and the the rhetoric started to escalate on tariffs, my thought was, okay. What could these tariffs be? What what kind of impact is it gonna have, and how does that impact my specific business? And what I realized was I didn't know. You know, I didn't know. And there was a lot of conversations that led me to believe that I couldn't predict what that was gonna be like. So at at the time, I had an investor who who had come to the table and she was very excited. We had already done a line with her that was go doing very well, and she wanted to invest in this new line. And I couldn't tell her what these, tariffs were gonna look like. I knew that they were coming. I didn't know what they were gonna look like. I couldn't tell her if it was gonna allow us to keep our price point the same, and I really couldn't tell her what our return on investment was gonna be. So we ended up losing that, that investor, which meant we had to pull back on our spring line. So this is a you know, like I said, I mentioned a little bit earlier, teleproduction. For my product line, our production time can be anywhere from sixty to ninety days. And in that time frame, you have to be able to already predict where that is gonna go once it hits the market. And if you can't do that, should you really be investing in it? So we, ended up pulling back on it, which now we look back now, it would have landed it would have landed at a 45% tariff, which Yeah. We couldn't have we couldn't have, supported that. And it's it's essentially a tax that you pay to The US when it hits the shore. And if you don't pay it, you know, what happens to your to your product? You don't you can't take possession without paying that tax first. So that that's actually a good segue into my next, question for Richard. I I wanna talk about how the the actual mechanics of tariffs. You know, I speak for myself here. It's, there's been talk of tariffs for, I don't know, at least the past, you know, seven or eight years or so, I think, you know, through kind of the the Trump years. And, and and candidly, I've just never paid that much attention and particular to the mechanics of it. And so kind of picking up where Angela left off, I mean, how does this actually work, Richard? Like, you know, what does a tariff bill look like? When did you get it? You know, do the mechanics, differ, depending on the shipping methods? You know, if you're shipping with a company like UPS or DHL, do they operate differently than, you know, a freight carrier, etcetera? Just help us understand, the baseline. So for for most small business owners, they probably likely have seen a lot of de minimis or informal entries. Mhmm. The big change and in a minute, I'll get through what the informal versus formal entry is. The big change is they have identified that anything that comes in from China, Hong Kong area will have to go through a formal entry. So in a formal entry, there's a lot more documentation required. And in a lot of cases, you don't get your final bill in a formal entry before it's released, but you put up a surety bond, which is an additional cost. And usually, those are for things over $2,500. So it's a large shipments. But they use this one exception in the, current code for trade that allows them to make every, individual shipment that comes from China, Hong Kong area, and Macau is still open as to whether it's gonna be included. But they'll have to go through a formal entry. So that means a surety bond. It's very complex. You put up some of your duties and taxes, but you don't get a formal final bill right away. That's why you have to purchase this extra surety bond. You also have to prove the documentation on the importer, country of origin, and that's gonna become very important for some of you who may be working right now with Chinese companies that are doing the Tijuana Two step. And what that is today is they're doing large shipments into Mexico, then they're breaking down the shipments in Mexico to under $800. So now that's good that would change. And so you'll have to prove where the real country of origin is and the details on the con content. You'll have to use a licensed broker, customs broker. And there is Ad Valorem merchandise processing fees that are new fees that you wouldn't be used to in a even in an informal. There's a small a merchandise processing fee, but this is a much larger one. So there's another hidden tax when it goes to the formal. Now some of these things, they might make adjustments to because the cost of a merchandise processing fee is another tax that's gonna be 50 to a hundred dollars. And again, your size your value of your merchandise isn't that great. And, you know, when they go on May 2 to the hundred dollars or the hundred and 20, I think it is, on May 1, May 2. It's the higher of the two. So if you have a $30 value item coming through, you'll pay the hundred. If you have a hundred dollar item coming through, you'll pay a hundred and 20 in due in, fees for the tariffs. Regina, let me ask pause you for a moment just to make sure, I'm with you and and everyone's with you here. So, for the the tariffs, which is what we, you know, hear about, in the headlines of the news. But there is also, this thing called the de minimis tax loophole. And the de minimis tax loophole has been, as I understand, it's been around for, a a long time. However, in I think, you know, the past six or seven years has been, let's say let's say taken advantage of by, some of the large, Chinese retailers like, Xinyuan or Xian and Timu and others. And and this this de minimis, loophole here, the key thing to know about it is that, historically, if you were shipping, goods into The US that had a declared value below $800, those goods would not be subject to any form of tariff or taxation. Is that right, Richard? That is correct. So there are three levels. The formal, which I kinda went through, the informal for anything between 800 and 2,500, and then the de minimis, anything under 800. And you go back in 02/2016, it went from 200 to 800. The reason it did is because if I was traveling internationally, I could bring $800 worth of values through the airport for free. So congress tried to harmonize that. When they did that and the way the rules were read, you saw the creation of the t one and two step basically, where individual shipments skyrocketed. So we went from $5,300,000,000 in goods through de minimis in 02/2018 to $66,000,000,000 in 2023. So essentially, what is it it was it it previously served a a kind of consumer centric purpose. But as the threshold was increased, yeah, certain, retailers realized they could, take business advantage of this in order to use it as a as a mechanism to import goods into The US, cheaply. That's right. And they basically created a new business model for fast, fashion forward type things, especially the Shimu, Shine and team, Timu as well. But so basically, they're kinda taking away the de minimis right away for the China Hong Kong. And the only thing they've said about the others, they wanna relook at it. Okay. They have Oh, I'm taking it to be I I you know, I the the the it seems it's a multisided issue here if we if when the de minimis, loophole goes away. And just just to clarify something you said earlier, on on on May 1, the de minimis loophole, from China will cease to exist, and in its place will be a, a a a default, hundred dollar charge or a hundred and 20 percent tariff, whichever is the greater of the two. Is that right? That's correct. And then base second, that will become a $200 charge. Meaning, if I if I send a, you know, $50 AOV, you know, package from China to The United States, I'm gonna pay 100 or $200 soon. So I'm not gonna do that anymore, is is I think they are to assume. But there's also so maybe that's a positive impact, for some US based small businesses and that you will face, less direct competition from, Chinese retailers. But is there another side of this equation as well, Richard? No. There is because your cost of supply has gone up. So in the short term, what does that mean? You have to either look at talking to your supplier about relief because you're not the only customer of theirs that is gonna be going through this. Or you have to look at, do they have an additional operation somewhere outside of China that has the lower like India is a winner right now because they have a lower much lower tariff. But ultimately, you know, in the short term, there's a lot of disruption in the market and that is gonna cause problems and headaches for everyone on this call whose source is from China. Long term, we're gonna have to find other production locations that allow for and right now, I can't even tell you where those are because there are 75 countries trying to negotiate with The US to bring their tariffs down, come up with better trade conditions. So until that happens, I know all the big guys, until this fog of tariff war stops, they're kinda stepping back and not really making any decisions. Mhmm. Because they can't. We don't know what's gonna happen in six months. Once that's all kinda settled, then you'll know. But in the short term, it's getting as much inventory as you can in The US before this comes in. For China, that's virtually impossible. You've got less than a week. Right? The second is next Friday. Or it's getting relief because these suppliers are gonna have the same impact all over The US with anyone that they're supplying for. Yeah. The relief point is a is a good one. I'm gonna come back to you in a moment here, Angela. But, you know, I wanna talk about your supplier interactions. I will share that you know, I've had several calls with, with with with my company's suppliers, in the past few weeks. And, you know, as Richard said, you know, we are all in this together. Of course, you know, technically, the the the tariffs are, you know, the responsibility of the importer to pay, but but but that's just the technicality of it. The reality of it is that, you know, this is a global event that has global repercussions including for, you know, your supplier relationships. And so if you haven't already and you and you are, subject to these tariffs, I would really encourage you to get on a call, with those suppliers. Understand first just, you know, the reality on the ground as they're seeing it, the impact of their business. You know, they're probably experiencing pain as well. And, you know, do your best to try to find some common ground, some willingness to, to to to to share in the burden of these. You know, I think if you can, if you can open that conversation and and and create some some some commonalities, then, there's a good chance of doing that because at the end of the day, you know, they don't wanna lose your business any more than you, you know, want to lose it either. So that being said, Angela, you know, tell us tell, you know, I think you've you've, had some some less than ideal, kind of, changes in your supplier relationships. What's that look like? What's what's going on there? Yeah. So, I primarily produce in China, and the reason why is because my products are made of bamboo. And so bamboo fabric is primarily sourced out of China. They have a very good, process to manipulate the the hard, green stick into a very soft fabric. There aren't very many countries that have the ability to produce it the way that it it I require it for my my products. So I've been using the same the same manufacturer since 2017. I've seen two. I have a bedding supplier, and I have a pajama supplier. And we have had very good relationships with both. One thing I do notice is when we when there are when there is times of, uncertainty when it comes to government decisions, they tend to get a little quiet. And I think it's more so because they're trying to find out what their direction is before they communicate it to me. And so at this point, the the conversation has actually slowed down quite a bit, and that is a concern for me. Although I know I'm not ready to pull the trigger right now because I am kind of hoping that letting the dust settle will yield a better situation for us, I still wanna keep the lines of communication open because, as you said, we could discuss and find a, an alternative process that could be beneficial for both of us. So I wanna keep those lines of communication open, but I also realize that they have, they have different directions that they're following. I know that they have, you know, they they do have a lot of government, influence on the decisions and the communication points that they use, to talk to us. So I'm I'm hoping that the lines open back up quickly and that maybe when they do open up, they do have a a plan to go forward. We've talked about in the past, like I said, the tariffs have always been a point of conversation for me. So we've talked about in the past going to another country. I know that there are some, Chinese suppliers that actually opened up, manufacturing facilities in Vietnam. And so they were shipping from Vietnam, their products from Vietnam to The US that, as you also mentioned earlier, there's a lot more scrutiny that's gonna come with, importing. So they may not be able to do that, any any for any longer. I had started having conversations with other manufacturers in other countries as this whole story began to unfold. And unfortunately, trying to make moves quickly in this, in this atmosphere, it means you may come across some, you know, less than desirable, people. And that happened to us. We put a down payment on a production a production line, and that, production that deposit was stolen. And that comes from trying to make quick decisions to kinda beat the clock, you know, so to speak. And sometimes that just most times that doesn't work. You really need to do your due diligence and take the time to vet the proper, channels. Yeah. I I certainly agree with that, Angela. And, you know, it is obviously, there are many companies, big and and small, trying to make shifts today in their in their supply chains and relationships and that creates its own sort of problem. So, you know, I think one one one tip I would just offer, you know, when you are communicating with, suppliers in other countries who, may not speak fluent English, you know, in moments like this when you really need to communicate something clearly and thoughtfully, you know, use the magic of AI. Right? Write write a a thorough letter in in Mandarin, in Chinese. You know, really let them understand what you what you mean to say, and I think those sorts of, those sorts of things can make a big difference. It can be the difference between you being one of the, customers that they, you know, are really engaging with and, you know, in a herd versus, versus not. So, okay. So so, Richard, the excuse me. We, sorry. I lost my train of thought there. What do you what do you do right now? Let's first of all talk about just just as a point of reference. What do you think big companies are doing today? How are they thinking about this, just so that we have that point of reference? And then more importantly, what advice would you give to, to to the to the companies on this call, as they think about, you know, the longer term opportunities, that this may, that may may present to workforce in some in some ways. Yeah. So so look, I think the bigger companies are gonna sit on the sidelines for the most part. They're also gonna lobby, and you saw examples of that already, the White House. Right? When their initial announcement was made, phones, computers, and semiconductor chips were included. You also saw since then that Apple iPhones and computers are not included. And there hasn't been much about the rest, but I assume all semiconductor type electronics, including TVs, are not included in in tariffs right now. So I think the bigger companies to start with are gonna stay on the sideline for a little while, and then they're going to, sorry. My electrical just went out. Then they're what they're gonna do is they're going to start lobbying, which I encourage all of you to do as well. You have to. There is no solution here if we don't lobby to get our best interest. And I think Angela spoke about some of the efforts that she's already involved in. So it's really important. So in the short term, it's talking to your current if there's gonna be any relief they can have, if they have other locations that might, work that have lower tariffs for you. And then longer term, this shift is trying to move manufacturing closer and onto US shores. But that's a five year transition. That's not in the in the next few years. So I I believe just like they had to pull back on some of the tariffs, the one that I think is gonna be the hardest because both sides are putting their feet in the ground and fighting is China. And so there is I believe that one is not gonna be solvable as these other 75 countries that are coming to the White House and trying to get blessings and agreements so that it brings the tariff rates down. Yeah. I agree. That's not the best encouraging one in the short term. Still a lot of uncertainty, and it's really creating, a lot of unsure headaches for everything you do in your businesses. Yeah. Yeah. No. Look. I mean, as you say, you know, it's not a particularly encouraging message, but it is an honest message. And I I think I think that the nature of things in the moment is such that, you know, it's easy to think that, you know, you're going crazy because, you know, it's like, what am I gonna do here? How can I navigate this? And, you know, I I find some comfort in knowing that we're kind of all in it together, you know. And, there are very few comp companies, in the world who can, you know, source, import products at a 50 ish percent tariffs. And so, you know, we have to believe that, you know, there will be some form of relief, that comes here. And, you know, but but until that time, I think some obvious practical things that, you know, we can do are, you know, to to cut back on costs wherever that's possible. In our business, you know, we pull back, you know, meaningfully our marketing spend and and elsewhere where we we believe we can do so, you know, safely. You know, we, you know, we we have cut back on discounting, in a way that, you know, slows our our our sales, but but ultimately, you know, preserves, new cash and and and keeps our margins as high as possible. Angela, any other any other, kind of tactical points of advice in that way, from you? Yeah. So one thing I do I do wanna share a link, and I I'd said I would share this link from NRF so that we can all share our voice on, on our opinions on these tariffs. It allows you to it's a very simple, link to be able to follow. It'll it actually fills in a lot of the information for you, but allows you to share your story specifically as small business owners, when you when you, talk directly to your lawmakers. Look, I am fighting the fight. I'm going to, to DC as often as I can to lobby against these tariffs, but we do need the voices of all small business owners that are affected. Because, you know, as was mentioned earlier, a lot of these bigger businesses are gonna sit on the sideline and kinda wait to see where it all comes you know, how it all comes together, but it's gonna require the the voices of the small business owners, the voices of the people directly impacted to make a difference. So I'm gonna share that link, and I'm gonna have, make sure that Ashley shares it with the, entire, call. And then feel free to pass that link on to your friends and other people that you know that are being impacted by these, tariffs so that they can share their voice with their lawmakers as well. Excellent. So I think I wanna actually I see we've got a lot of great questions coming in. I think maybe we can just open to those questions earlier to make sure we get them all all in, if that's okay, with our 13. I, I one came up earlier that I I thought was oh, hey, Ashley. You can do that. Is that alright? That's perfectly fine. How's is it gonna work? Are you gonna feed them to me, or are we just go and grab them? Sure. Hi, everybody. I'm Ashley with Saltbox. So I'll be moderating today's q and a today. So jumping right on in. Thank you, Tyler. The first question that we have is, okay. So this is a question for Angela. It's who is managing the link? So I guess who's behind, the company, and I will be sharing that link now. And who's representing small businesses? Yes. So the, the company behind the link is called National Retail Federation, and it is a, it's a a pack of small businesses, small business owners, typically smaller business owners that have a stance or an opinion on decisions that are being made in Congress that affect small businesses. So we go and we lobby. And the reason why small businesses go and lobby is because they, the lawmakers really want to hear the stories of the small business owners. They don't necessarily want to be lobbied, from the bigger businesses. They don't want to be lobbied from, people with ulterior motives. They want them to know that the decisions that they're making are positively affecting their constituents, their constituents that are in their communities, boots on the ground, doing the work. So we go and we talk, talk to them about how different things are impacting us and we ask them for their, support in whatever bill, is coming to the floor. That's amazing. So it's small businesses are out lobbying for their own kind of rights here, and I think that that's so impactful. I did pin that there. It's the, NRF link to share your voice. It'll be pinned to the top of the chat. So the next question that we have is, does anybody have a clear answer about the current state of Canada tariffs? I keep getting conflicting info. Has anybody heard anything? And can you provide some clarity there? I do not have any So what I can tell tell you from what I picked up, because some of this I had to go back and research what's the latest because it keeps changing every week, is if it's compliant with, it's the USMCA, there is a 10% tariff. It used to be, call it, free trade. There is a 10% tariff. If it's not compliant with that, currently, I believe it's at 25%. But even getting proof of it being under the MSMCA, which, was the renewal in 02/2018 of NAFTA, it still requires a lot of documentation to prove it falls under that. Now there are certain, like, aluminum, steel, those kinds of things that have separate, tariff rules. But I don't think most of that is what we're talking about with this audience because those are usually big business and they're car manufacturing and things like that. But, again, it's all changing. And the thing I want you all to remember is what we know today, you have to know to get what you get cleared. But stay on top of it because I do believe over the next ninety days, we're gonna continue to see big adjustments from what was announced to what reality will be, you know, once this settles down. So I think a question a good question to follow-up, with that with is how do you stay informed? Because it definitely is information overload at this point. So I think to speak to how you stay informed, what sources, tools, or habits help you keep a pulse on trade shifts without panic, and I think that's so important. I I would I'd like to speak on that. I know for me, it it's overloading. It it can be overwhelming, and it can be, almost detrimental to your spirit to constantly listen to all of the twenty four hour news cycle when it comes to these tariffs. So I do, rely heavily on the NRF because it's bipartisan and it's really focused on what it matters to me right now, which is, can I, can my business divide this? So I've, signed up for their, daily newsletters. So I get a newsletter almost daily, just understanding where we are with the discussion points, where, where the lawsuits are stand, where the lawsuits stand and any changes that have come down, and how they're going to impact any particular, area of business. So, and then also making sure that the conversations that I have are based on facts, making sure that when I'm talking to someone, I'm telling them the facts of how, the country is being, is being impacted by these decisions and then how the small business is being impacted so that people are, well informed. If you don't have a small business, some of this stuff may, you know, just be superficial and okay. They said I may be in, you know, it may impact me down the line when people start to implement the, press point, but right now it's fine. But everyone needs to know truly what these decisions are making because we could get allies out there, people that don't necessarily have small businesses, but can become allies for small businesses and start to speak to their lawmakers as well. I think, you know, sometimes it feels a bit overwhelming, like we're so small and we have no power here, but there's power in your voice and there's power in the, in in the impact that you have on your local communities. So make sure that you get the right information, get the information direct from the source and share that share factual information, and let's leave the emotion out of it. Yeah. I think that's so great because like you said and there's also power in numbers. Right? So it's just that makes a lot of sense. And I think that getting information from the source, you're getting kind of, like, the truest, most accurate information that you can probably tactically take into your business. I think that's great. Tyler, I think you and I could talk to this question all day long, but let's put it with some brevity. How can a brand strategically bring in Saltbox to reduce operational cost and increase flexibility? What features make Saltbox a lower risk alternative during times of uncertainty? And I think, Angela, you might be able to speak to that as well as a member. Yeah. Sure. I wasn't expecting that question. I mean, I mean, look, I I I think I think, first of all, you know, if you're like me, you much prefer to navigate these sorts of moments, you know, with a community than not. Right? And I think the fact that we're here right now having this conversation is is a testament to that. And, you know, the reality is today there are, many hundreds of companies in Softbox who would share, it'd be a neighbor with you who are dealing with this, and there's a lot of discussion in the hallways and such about it. Number two, and I'll just keep this brief, is that, you know, our strategy is built on flexibility. And, you know, what does that mean? That means when things are difficult, you can, you know, you can you can you can pretty quickly reduce, that expense burden, and you can, you know, adjust, you know, your your your business and your operations way that we need to, and that, is is quite quite quite valuable. Not nothing worse than having a lease over your head when you don't have a business to pay for it, and so Softbox certainly, solves that problem with most sellers. Angelo? Yep. I think I'm really happy. Let's let's get into it. There's lots of good questions here. We have the answer. There are. There's so many. As someone creating a new product, should I start pivoting away from China based manufacturing or bake the tariff costs into my margins and hope to be in support center? I would like to see the company that easily bakes 145% into the 100. Yes. Let let let me take answer that. I mean, look, I would say that if you are starting a company, I would do yourself a favor and avoid the volatility of this China. Okay? Whether you think it that the future is great or you think the future is terrible, the present is highly volatile, and in the future is likely to be also highly volatile. And that could go, you know, a lot of ways. And so, just go elsewhere, you know, unless you have no choice, because once you embed yourself with the supplier and supply chain, you know, as a lot of folks in this call know, it is a difficult thing to change. And, you know, I think there are are better options out there today from a risk and volatility standpoint in many levels, than in fairness. I would encourage you just to look elsewhere. I think that point And and what I would just wanna add on that is is a backup. You should probably think long term about dual sourcing Because you don't know, at least for the next three and a half years, who's gonna decide one night that they need to change a different country. If especially if they get some of the wins they expect, they will start using this tool more than we're used to seeing. We've seen it only continue to grow and call it globalization, free trade, lowering cost barriers. If they start to see a revenue stream and a a win, I would suggest that you always think about who's your secondary location so that if you have to adjust your you can't it's what big businesses do. Look, when I worked at UPS, there were strikes. What we our customers learned from that is don't put everything just in one basket. Now since then, it's kind of calm down. It's twenty something years later. But the point is, this dual sourcing, I think, is just a strong principle that over time because look, you don't have the time right now and you're trying to solve the biggest challenge in front of you. But I think over time, we can make this work. And the one thing I would add to that is, this is an ideal time. I think a lot of people are getting a little gun shy when they see all this volatility, in the market. But this is a great time to learn. So if you're building a business, use this opportunity to kind of decide where is the bottom of the barrel, you know, what does it look like and how would you, mitigate your way away, you know, out of this situation. I think the great advice to dual source and, you know, if you can stay away from China as much as you can, But also, there's not a lot of, manufacturing options in The US, especially to scale, but there may be options for you to, micro manufacture in The US depending on your products. So look at that option too, because you may wanna create, find yourself a micro manufacturer to kind of cover the gap, in in in trying times like this. I wanna actually roll what you're saying, Angela, into this next question, because I think that they kind of fit together. So the question is for brands exploring new manufacturing regions, what's the best way to find and vet reliable partners? Are there tools, networks, or red flags founders should know about? And I think also maybe to speak to those micromanufacturers as well. Like, how do people find find them? Yeah. So there are sorry, go ahead, Amy. Oh, I was gonna, I was gonna lean on what you said earlier, Tyler, find your network, find your community. You there are networks and communities that specifically are industry based. For me, I I, found a a community of, bedding manufacturers and they actually it's not people that create, sheets in in in pajamas as I do, but it's the basis of my customer base, which is vetting. So I found that industry conversation and I joined that conversation so that when something happens within my industry, I know it beforehand because the people who have my customer before me are having this conversation. And that's what you want to do, make sure that it's not just you never work in a silo. Your your conversation is gonna, be supported by the people that have your customers before you and the people that have your customer after you. Yeah. I would add that, a couple of points here. One is that, there are, a lot of, sourcing agents, in the world and, you know, there there are or those have been around for a long time. They're they're kind of, like, tech centric, you know, easy easy to use sourcing platforms you can go to. But we would definitely encourage you, you all to to to explore sourcing agents. The benefit of them, what they do is that you say, hey. I'm looking for, you know, bamboo sheets, and they will go and talk to many vendors, and, you know, get put out many RFPs and bring back prices to you. And so, you know, kind of help run a competitive process. And then the other comment is just more, more more generic, but I think important, which is any and every time you were interfacing with, suppliers, you know, just bring your a game. Right? I think a lot of a lot of companies, you know, especially who are new to things, just kind of assume, oh, I'm I'm the customer here. So, you know, they're gonna be responsive to me. They're gonna, you know, treat me as they should, etcetera. This is not the case. You know, manufacturers, suppliers are absolutely judging you and the likelihood of your your business being successful based on how you show up. And so, if you're showing up in, unprofessional, you know, unimpressive ways, then that's what they're going to, you know, read. If you're showing up in very professional and, you know, very serious way, they're gonna read that. And so, you know, just make sure that you're getting that right. And and and that's many things going to that, but, you know, by and large, it's about, you know, making sure that there's a professional image behind, your your your your business and brand. Even if it's brand new, you don't have to have a beautiful website, but you've gotta have, an honest accurate message that, you know, really can make you are serious about what you're building and that they should take you you seriously. And that's, you know, especially important today because again, there's so much competition, you know, trying to get in front of suppliers in those countries that, you know, may be able to support you. You've really gotta make sure you stay down in that way. I think that's great. Present yourself for the business that you're building. Even if it's not the business you have today, present you for the business that you're building. Richard, this question I would pose to you. What shipping lanes or countries are most vulnerable right now, and are there alternative routes or fulfillment hubs we should be exploring? So the most vulnerable is gonna be anything from the China region. Right? Because for the most part, that is being, laid out as it's gonna happen now. The ninety day relief that was put in does not it's the only lanes that, are impacted. If you go to the carriers, they're charging search fees right now because they're overwhelmed with the amount of volume that's coming out of there. But truth be told, the country of origin is where it was manufactured and not where it was last shipped from. So this example of the Tijuana Two step, you're still gonna see things out of Mexico that were manufactured in China get those high tariffs that I talked about earlier. So places like India is, got lower. Your Mexico is in negotiations. They're talking about, doing the same thing that The US did with China goods to get on the favor of the US government. So some of that's behind the scenes. But, you know, in the next two months, I would say anything that is non, China origin, you should try to move it up if you can. But there's a cash flow issue too, and I recognize that. This, you know, all of this puts pressure on your margins and your cash flow. And so it's a very challenging thing to deal with. And at the same time, it's such it's it's not it's dynamic. And the rules are changing, and they're changing from one week to the next. So I don't know that there's one place, but we know that Europe still has the baseline, tariff rate, the 10% on de minimis now. But they're not a low cost provider. Now maybe Eastern Europe will become one again because it was call it in the early two thousands. But, you know, that Latin America but right now, there isn't an answer to sit here and say, this is what you should do. Because until we get some of these negotiated so part of it's a pause, part of it is recognizing there's inflation in in running your businesses right now. And that's painful, and it's gonna be painful for the end consumer. And this is why going back to the supplier who knows he's losing all this business, if you have any leverage with him, now is the time to talk to him about that. Absolutely. One of the members or I I don't know if it's a member, but, someone in the chat made a comment. I just wanna make sure it was I thought it was really important when I actually get to it about a supplier who, they were describing, that, the supplier added an incremental charge of they they they were importing a roughly $6,000 order, and the supplier added a incremental charge of 500 or so dollars, I believe, and, and indicated to, to the person that that included all the tariffs and everything was gonna be fine, and they're asking if this is okay. Okay? So I see. Thank you. Yeah. Yeah. Richard, do you wanna go go for it. Yeah. So the importer is the one that's financially liable for the tariffs of duties and taxes, the storage fees, custom brokerage, all the importers fees. So for him to say I'm putting $500 on or her I'm putting $500 on and then it's gonna be cleared free. There is mechanism in place. And I think, understanding who it is that clears today, if it's all de minimis, but it's a $6,000 order. So you're already working with a broker somewhere to clear your orders. So the first thing I would do is call up your broker and talk to him about it. And understand if most brokers don't have the ability to charge the exporter. UPS and FedEx do have that, DHL does. But you also perhaps you've seen DHL said they're not gonna bring things to The US. They don't work any more than $800. That was an article about a week ago out. The Hong Kong post office has stopped shipments into The US. But the point is, talk to your broker because the broker has to is on his hands right now every day working with custom brokerage, which is another challenge because the customs group is short employees. And now it's only gonna get worse because now everything's gonna have to be, inspected as well. I'm sorry. I went off topic a little bit. The point is one thing to pay it. One thing that that, you know, may be happening here, and this certainly happens a lot, is, you know, first of all, you have to understand that these suppliers are highly motivated, for you to continue to buy. You know? And so, you know, you you have to be cautious and skeptical. There's a big difference between, you know, trusting a supplier that you work with for many, many years versus someone that you don't know. And so all those things have to be taken into account. I think one thing that is happening, and and perhaps this is at play in in your case, is that, suppliers will often encourage you as the importer to under declare the value of, of of the goods you're importing in a way that brings them, below, you know, that, de minimis, threshold. And, you know, I'll repeat what Richard said, which is that, you are responsible for this, you know. And so, you know, you you last thing you want is is to be, you know, caught up in a in a situation where you're undeclaring the value of your goods. At the same time, I will tell you that, you know, I, you know I don't mean Richard, I'll I'll let you what what is your what make a guess of, like, the, the under undervaluing of goods coming into, in in to in to the customs these days. Well, now that they're gonna inspect everything and they're gonna use the harmonized codes even on the de minimis things, it's gonna be really hard to undervalue. Right? You buy a $10 real simple. You buy a $10 shirt out of China and in The US on average, it costs $17 between Marshalls and TJ Maxx. You put in the $10, it's gonna show 17 and charge you the difference. Mhmm. They're gonna correct those. And, Sunshine, on Alibaba, I will go back to them. I'm sorry. There was a question around the $6,000 shipment. I just wanted to I would go back to Alibaba and talk about who their custom broker is because they're not a licensed broker in The US and get a hold of that and ask them to connect you to them, to find out if there there's some kind of guarantee. Absolutely. So that was a little, caveat that she added was that she didn't go through a broker. Her Her previous order is because she went through Alibaba. Yeah. But Alibaba, I think, over 800 was using a broker. And like I said, UPS's insights, they have a broker. They are the broker, so we don't hire someone else. Yeah. Also, just be aware, guys, that, like, you know, your typical, your typical supplier manufacturer in China, is a business that is, you know, smaller than you or, you know, that that I I've I've I've taken a you know, I've been into these, active regions, you know, numerous times and, like, actually put eyes on these operations. And I think one of the things you'll realize is, oh, man. I probably shouldn't be these are great people, and they work very hard on these things, But I probably shouldn't be taking, you know, legal, you know, slash tariff advice. Right? I don't it is not the case that the average supplier, you know, in China or Vietnam is an expert in tariffs. You know? And so if they're if they're giving you this sort of advice, you have to just take that with a grain of salt, but certainly don't assume that it is it is accurate because as you see from this call, these things are hard to know. They're this is a complicated matter. And as the importer, the burden, is on you, not the exporter. So make sure that you're doing what you your due diligence. Right. And you're you're financially liable for anything that you import, and that's why the broker also plays an important role in this. And they just got more important, and they're gonna charge something for these smaller values that they didn't used to have to deal with at all. Yeah. There are millions a day that went through that no one ever saw. Lots of positivity here. I love I love it. Six months from now, we can do a follow-up. We'll have we'll have clarity and then we can talk about, okay, what should we do and how should we move forward given that. But right now, it's just we we react emotionally, even myself, to what forty years look like to what looks like right now. And I recognize it'll all calm down. It'll some of it will get solved, but we still have to understand that we can't make a lot of decisive moves that have big financial implications to each of you until we have those rules set a little stronger or more foundation to it. That's right. So I think we're out of time. Yeah. And, you know, look. I mean, we've heard a lot of great advice here from from Angela and and Tyler too slash Richard. Thank you, so much, for joining us and sharing this this this insight. You know, I will just end with with saying that this is obviously, you know, it is it is a challenging and and kind of real time unfolding situation, and we do not know what's gonna happen tomorrow or next week. You know, all of us, I think, are sitting with a lot of uncertainty about whether our business, can can navigate this. And we're gonna have to just sit there for a while longer. We have to try to just make, you know, good smart decisions every day. We're gonna have to go and have our voices heard. But mainly just try to stay alive, you know. And, if you can stay alive, then, you know, there's a future to be had. And I would also just say that, you know, at the end of the day, what is happening here, you know, as it plays out is is there's a huge transform to value. Right? We are not, you know, we're not destroying value. We are moving it around. And so as an entrepreneur, you know, part of our job is to figure out where is that value moving, you know, and how can I go be a part of that? And so, you know, look, for some of us, the the reality is, like, you know, this will be really bad for our companies. But you are not the company. You know, you are the entrepreneur behind the company, and so don't let that stop you, and and look for the value. Anyway, I hope this has been helpful. Really appreciate you all joining us. Again, Richard and Angela, thank you so much. Thank you, Ashley. Sure. Absolutely. Thank you. And We hope to continue the conversation with us. You can follow along with Softbox at join Softbox on Instagram. You can subscribe to our newsletter, via the links up at the top pinned to the top of the chat, and and we'd love to continue this conversation with you all. Thanks. Have a great one.