Small Tech Companies Caught in Uncertainty Amid Changing Trump Tariff Policies

When President Donald Trump signaled a serious approach to imposing steep tariffs on major U.S. trading partners, Robin Liss realized her Suvie appliances were at risk.

Suvie’s innovative kitchen devices, designed to prepare meals in minutes, are produced in a facility located in one of China’s largest manufacturing centers, containing over 500 components sourced from across the country.

After crunching the numbers and evaluating the financial impact of the new tariffs, Liss traveled to Asia in March to explore an alternative business strategy. 

“I’m at risk of running out of appliances,” Liss expressed before embarking on her two-week journey to Taiwan and Vietnam. “I need a solution.”

Suvie is one of many gadget manufacturers working diligently to navigate the challenges posed by President Trump’s tariffs and the accompanying uncertainty. The fluctuating messages from the White House have caused turmoil on Wall Street, with tech stocks experiencing their poorest quarter since 2022. Small businesses, like Suvie, feel the pressure more acutely as they face rising operational costs and potential supply chain disruptions.

Earlier this year, Trump imposed additional tariffs on China, a move now escalating to unprecedented levels, potentially souring relationships with other longstanding trading partners. Scheduled for Wednesday afternoon, President Trump will likely address a “Make America Wealthy Again Event” in the Rose Garden, where he is expected to unveil new reciprocal tariffs following a series of import duties directed at China, Canada, and Mexico. Collectively, these three countries accounted for over $1.3 trillion, approximately 40%, of total imports last year, according to U.S. Census Bureau data.

“Businesses that believed they had successfully relocated their supply chains out of China are now second-guessing their decisions,” commented Peter Hanbury, a partner at consulting firm Bain. “While there are several relocation options, uncertainty regarding the final tariff implications makes it a challenging decision.”

Liss mentioned that her Cambridge, Massachusetts-based company is shouldering the additional costs — for the time being — instead of passing them onto consumers. The expenses related to Suvie are not only from the manufacturing of their appliances, which are compact like microwaves yet offer over 10 cooking functions.

She is also contending with rising food costs; an aspect of Suvie’s business includes meal kits priced starting at $11.49. Suvie provides weekly meal deliveries, but they also have options for customers who prefer deliveries every two to four weeks.

The pressing issue for Suvie and similar consumer-oriented businesses is that as their costs rise due to tariffs and inflation, Americans are seeing a decline in their purchasing power.

Federal Reserve Chair Jerome Powell noted a “moderation in consumer spending” during the central bank’s March policy meeting, mentioning that tariffs could exert upward pressure on prices. Financial markets have faced significant sell-offs recently due to prevailing uncertainties.

A recent evaluation from the Yale Budget Lab suggests that tariffs could increase costs for the average American household by an additional $1,600 to $2,000 yearly. Target CEO Brian Cornell indicated to CNBC in March that consumers should anticipate price hikes on produce items like strawberries and avocados.

Liss founded Suvie in 2015 and began product shipments in 2019, following a successful Kickstarter campaign for a “kitchen robot capable of multi-zone cooking and refrigeration.” The company employs 20 individuals in the U.S. and has thus far avoided layoffs, fueled by a remarkable 80% growth last year, which Liss states has generated annual revenues between $20 million and $30 million.

If not for the recent tariffs on goods from China, which have raised the levies from 3% to 23%, Liss believes Suvie would currently be operating at a profit.

Liss noted that irrespective of what Trump announces on Wednesday, labeled “Liberation Day,” the ongoing tariffs on Chinese goods make it essential for her to identify a new production country. The specific destination will depend on the evolving circumstances.

Regardless of where Suvie relocates, the company predicts it can scale up production within six months.

“That timeline is extraordinarily swift and almost unprecedented,” Liss stated. “However, if we fail to execute this plan, we may lack sufficient products for the holiday season, which is our busiest sales period.”

Austere founder Deena Ghazarian finds her business jeopardized due to tariffs imposed on goods from both China and Mexico.

Austere, located in Wilsonville, Oregon, manufactures cables, cleaning, and surge-protected power products. Established in 2018, the small company has previously moved approximately half of its operations from China to Taiwan and Vietnam and was in talks to shift production to Mexico, but those discussions have stalled since November.

Up to 50% of Ghazarian’s components are sourced from China, with half of her products still manufactured there while the remainder is produced in Taiwan and Vietnam. For her cleaning product solution, which relies most heavily on China, she estimates a year would be required to transition production to Thailand.

Ghazarian started accumulating inventory last year to mitigate the impacts of potential tariffs. She mentions that others have taken similar measures. This inventory investment diverts many resources that could have been utilized for hiring, marketing, and expansion.

“I’m buying time to strategize my next steps,” she remarked. “However, if I keep incurring costs to adjust around tariffs, at some juncture, the financial returns may not justify the expense.”

Ultimately, this will lead to increased prices for consumers, and Ghazarian has noted that many partners she collaborates with plan to implement price hikes later this week.

The entire electronic devices sector is experiencing significant strain.

The Consumer Technology Association (CTA) estimated in January that new tariffs could raise laptop and tablet prices by as much as 68%, and increase smartphone prices by as much as 37%. Video game console prices might surge by as much as 58%. The tariffs could reduce consumer purchasing power by an estimated $90 billion to $143 billion annually.

“This is just devastating to the U.S. economy,” remarked CTA CEO Gary Shapiro. “It’s exceedingly inflationary.”

Andrew Wilson, deputy secretary-general and global policy head at the International Chamber of Commerce, expressed that the cost implications from a 20% to 25% tariff could eradicate a company’s entire operating margin and complicate its international operations.

“There is a risk of retaliation in the global economy leading to a further deterioration of the business environment for the tech industry and American companies,” he noted.

The logistics of relocating are unfeasible for many enterprises. Over the years, cities in China such as Shenzhen, Guangzhou, and Dongguan have emerged as crucial manufacturing hubs for tech and electronics production.

These markets have consistently developed superior component supply bases, skilled labor, and cost efficiencies that are challenging to replicate elsewhere, stated Terry Arbaugh, chief commercial officer at SEACOMP, a company that designs and manufactures electronics including thermostats and video game devices for clients. The company maintains operations in both China and Mexico.

“Discussions on tariffs are leading to increased business relocating from China, but often, it’s not transitioning to the U.S.,” Arbaugh added.

While numerous larger corporations have successfully shifted production to regions like Taiwan, Thailand, and India over the years, they have largely tapped out existing supply chains in those smaller markets, according to Arbaugh. He noted that producing lower-cost consumer and medical electronics in the U.S. isn’t feasible for many businesses.

Currently, Suvie has no plans to relocate its production domestically and is focused on discovering alternative locations in Asia.

Liss has already scheduled a return flight to Taiwan in the coming weeks and will subsequently explore other countries in the region for solutions.

“I might book the next available flight in the air,” she said from Detroit airport after her initial trip to Asia.

WATCH: Economists estimate how much revenue tariffs could generate.