I’m sure that by now, you know that the White House put a 90 day pause on most of the reciprocal tariffs. But given my conversations with a few of my clients, it should not be assumed that everything stopped.
The other tariffs are still in place. That list includes…
1 – The 10% base global tariff
2 – The reciprocal tariff on Chinese Goods of 125%
3 – The 25% tariff on Steel and Aluminum
4 – The 25% tariff on Autos and Auto Parts
It should be noted that the rest of the reciprocal tariffs were only paused. Many of those nations are currently in negotiations trying to avoid having them put into place.
But this is only temporary. All or a portion of those reciprocal tariffs may be again instituted.
There are two points to be made…
1 – Even if no other tariffs are put into place, what remains is still extremely inflationary.
2 – This thing isn’t over by a long shot.
Let me leave you with this…
Let’s continue our discussion of an Entrepreneurial Response to these tariffs with a Construction Business.
Joanne B. Owner does kitchen and bath remodeling where she supplies labor, parts, and material. She grosses $1M annually and takes home $100K between her salary and distributions.
She quotes jobs based on a formula of marking up labor 300%. Parts and material are marked up another 250%. In other words, for every $1 in labor she charges $3 and for every $1 in products, she charges $2.50.
As discussed in the prior two examples from Monday and Wednesday, it’s the same process. She needs to do whatever is necessary to maintain her margins.
She’ll feel pricing pressures from just about everything. Her products will probably go up first, she’ll certainly see increases in general overhead, and sooner or later she’ll need to give her people a raise if she’s going to keep them.
Joanne needs to watch her monthly financial statement like a hawk to stay ahead of the curve. She only has a ten percent margin to work with.
We find ourselves in a dynamic environment where things are changing almost daily. If you don’t keep up with it, you could find yourself out of business.
If you have questions, you know my number.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
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