Trade Chaos Causes Businesses to Rethink Their Relationship with the U.S.

Summary

The tea farmer in Japan, the shoe company in Montreal, the chocolatier in Mexico: Small businesses around the world have been roiled by President Trump’s constantly changing trade policies.The trade rules have upended strategies, prices, logistics and investments as businesses try to both inform and hold on to their U.S. customers. Some small companies, which operate on razor-thin margins, are questioning or pausing their U.S. expansion plans. We spoke to six businesses, from Sweden to Brazil, about how they’re communicating with customers and managing the uncertainty. Here’s what they said.For a Swedish designer, sales surged and then slumped.Asket, a Stockholm-based clothing company, emailed its U.S. customers in mid-August warning of possible price increases and the expiring de minimis exemption, which allowed the duty-free entry of merchandise valued at under $800. “It’s not super sexy communication,” said August Bard Bringeus, Asket’s co-founder and chief executive. But it prompted a spending spree, with U.S. sales more than doubling over 10 days.The company has kept prices steady, taking a hit on its margins. “It will probably need to change,” Mr. Bard Bringeus said, adding: “We’ll probably need to increase prices in the future to regain what we’re losing now.” European Union exports to the United States are now subject to a 15 percent tariff.The uncertainty has been frustrating. “It’s not like all European brands are going to start manufacturing in the U.S. all of a sudden; it’s impossible,” said Mr. Bard Bringeus.The United States is one of the Swedish retailer’s biggest markets, but U.S. sales fell in the third quarter, when de minimis ended, and are now down about 20 percent from a year ago.“I think there’s just a general aversion, probably, toward buying from European brands because you have this notion that you’re going to be hit by tariffs or that your order is going to be charged with customs and duties,” Mr. Bard Bringeus said.A Canadian shoe seller h...