Both large and small businesses are telling CNBC that the latest Donald Trump tariffs targeting countries around the world and targeting trade collection in the century could cause freight to be abandoned at ports as cash-bound owners and CEOs reject in-stock items that could be wiped out financially.
Rick Muscat, president of Deer Staggs, a family-run shoe retailer, imports around 2 million shoes a year. It is about 98% of boys and boys’ shoes made in China are sold on Macy’s, Coles, JCPenney and Amazon.
His one $50 men’s shoes and a $35 little boy’s shoes have risen from $80 to $65 each after the recent US trade war, with deer stags being set to pay new tariffs of more than 104% on Chinese goods stacked on top of previous tariffs.
Before the tariffs increased in 2025, his company paid a 6% liability for shoes.
“The tariffs then raised 10% twice, bringing up to 26%. Then last week, Trump scored another 34%. Currently, 50% has been imposed today. All of these tariffs make my total of 110%. Do leather shoes now have a 120% tariff?” Muscat said.
He estimates that the costs of freight orders subject to the new tariffs will rise between $60,000 and $600,000 and $1 million.
“Cash flow burdens are a problem for the time being,” he said. “We don’t have the capital to tackle this. We only have one pile of money, but I pay for this, which means I’m not paying for anything else.
Muskat forces suppliers to retrieve cargo as they don’t refuse containers at the port, but told one factory to pause one or two weeks of shipment and see how things unfold. A conversation with the retailer is underway.
Other US importers are expected to abandon their goods at ports. At the port, you can either return to the manufacturer or auction or destroy it in the US.
On Wednesday, Trump made another change to the fluid situation, saying that while some countries other than China will receive a 90-day suspension on tariff implementation, China’s new tariffs will rise to 125%. According to one estimate, more than half of the daily import duties charged by the US is charged to Chinese goods, with tariffs reaching more than $1 billion per day on those goods.
MSC Livorno shipping containers are waiting to be dropped off at the port of Long Beach, California, on March 5, 2025, a day after President Donald Trump.
Frederick J. Brown | AFP | Getty Images
“The main trend we see is shippers who don’t seem to accept cargo,” said Joseph Estevez, CEO of Global Supply Chain Consultant Main Point. “Many of these companies are financially levered. They don’t have working capital requirements, they don’t have cash. So they simply can’t take on this and can’t want to see what happens. They don’t have the liquidity to do that,” he said. Balance sheets and cash levels were sensitive to major changes in costs as consumer demand slowed “before this all nonsense.” “Every CEO we’re talking about seems to be just waiting. They’re not accepting it at this point.”
Today, many companies are saying they delay shipments to manufacturing facilities and not load cargo onto the ship. If the item arrives at the port and is unable to pay import duties, the item is sitting at the port and the company will be charged a costly detention fee.
For many importers, “there are no factories in the US.”
Bruce Cumminstein, an angel investor with the New York Angels and former CEO of Casa Bela, a cleaning product company, knows the challenges of manufacturing in China. Kaminstein was able to navigate tariffs in the first trade war with China, but he warns that the startups do not have the financial resources of large corporations that can withstand capital crunches.
“The product is left in the container because the retailer won’t take it,” Cumminstein said.
For now, water freight will not face new tariffs. In the updated guidance on China tariffs released Tuesday by U.S. Customs, the “water clause” explained that cargo enters the port today or in the coming weeks will not be affected by the tariffs.
But Kaminstein says it takes years to manufacture the supply chain.
“For example, an average sized household goods company is $20 million. They don’t have the capital to open a factory. “That’s the real point here. If you have great ideas, where do you make your products? There are no factories in the US that make products for other brands.”
Mary Rollman, an organizational strategist and partnership executive in KPMG US, said companies have more refined and better analysis to value the costs of moving today’s supply chain, but added that it takes years to find and qualify for suppliers.
“Companies need to assess the costs of recovering their supply chain,” Rohlman said. “They review hard data on fixed costs, look at the labor pool and see if there are enough workers to meet the demand. They also need to see if it’s still cost-effective to continue moving to other countries, as they are cheaper than continuing to manufacture outside the US or customs return.”
Another option, she said, would be to stay in a country where production is currently in place, banking the new administration for four years, and could withdraw tariffs.
“We use all the components,” says Kaminstein. “It’s very rare that products are made in one place. We’re used to the global supply chain. At Casa Bela, we bring products from all over the world and manufacture products in the US.”
Small business managers told CNBC via email that Trump’s trade plans will ultimately support American business owners.
A spokesman for the SBA wrote in an email: “The SBA fully supports President Trump’s efforts to revive American jobs, stimulate American industry and strengthen a level playing field to bring competition and victory to entrepreneurs.
Deer Staggs’ “thin razor margin” bans front-load products and consumers may have to pay in the end. Muskat says difficult price consultations with retailers are ongoing.
“We had one conversation with retailers who agreed to split the increase, but they didn’t think they could raise prices. Most of the retail community is still trying to understand what to do,” he said. “It’s very fluid. How are you planning? Hope isn’t a strategy, but most people want Trump and XI to talk.
“The tariffs have more than tripled on products that consumers buy every day, like clothing, or products that cannot be grown here, like coffee or bananas,” said Josh Teitelbaum, senior adviser at Akin. “We should expect it to ripple out the economy.”
“It’s important to remember that new tariffs will be paid by US importers,” said John Gold, vice president of supply chain and customs policy for the National Federation of Retail. “Retailers will ease as much as possible, but unfortunately they cannot absorb all the increases in costs. Some tariff charges are close to 50%, over 100%, and many retailers are forced to raise prices.
