As anticipated, President Trump’s tariffs have arrived (sort of), creating volatility on Wall Street and Main Street. Across the nation, 401Ks took a massive hit (160 million people are invested in the market, per Time) while the Trump Administration maintained that the tariff pain will be temporary and the U.S. will be in a more favorable trade position once the smoke clears. The long view, he maintains, will see retirement accounts in better shape and the U.S. in a far stronger position with regard to global exports. On Wednesday, he promptly announced a 90-day pause on all tariffs with the exception of China.
So what does it mean for the office technology dealer community, which is already seeing manufacturers increase prices? We reached out to a cross-section of dealers, big and small, from coast to coast, to find out what they’re hearing out in the field. Are clients rushing to make equipment investments in anticipation of rising costs? Or are they taking a wait-and-see approach? How are dealers responding to the situation? Here are several responses; we will publish a second article with more next week.
Dawn Abbuhl, Repeat Business Systems: We have seen a “wait and see approach” from our customers which has been slowing down our sales. We have pivoted to a proactive approach letting our customers know that it is in their best interest to purchase now to avoid high tariffs, which will absolutely lead to significant price increases.
Jim George, Donnellon McCarthy Enterprises: We have been pushing on our customers to make decisions quicker since the beginning of March because of the tariffs. All manufacturers have increased their pricing on parts, supplies and hardware. I do not believe this is a time to sit back and wait it out as a dealer. We have passed on the price increase at a lower level to our customers. With the recent retaliatory tariffs coming from China I am not sure we will get a better deal within the next month or so. Our industry has been resilient and will deal with this as well. I can tell you that speaking with several of my peers it is top of mind right now.
Erik Crane, CPI Technologies: We are not seeing a change in buying behaviors based on the tariff situation at the current time. What we have seen is manufacturer’s raising prices anywhere from 7-15% using the tariffs as a reason. Obviously that is affecting our ability to maintain margins. I feel it all will balance out over the next 6-12 months with dealers making the appropriate adjustments to their business plan.
Thomas Fimian, Levifi: This is a self-inflicted crisis of epic proportions and it appears the lessons of history have been completely ignored. I think there will be long term pain and damage that will be difficult to repair. The U.S. is seen in the world as a bully and an increasingly unreliable partner. This has great potential to weaken the U.S. and its economy in the long term.
Andrew Ritschel, Electronic Office Systems: The amount of damage to the economy caused by idiot bipartisan political chaos in Washington is staggering. Having this follow up the pandemic is catastrophic. At least a good portion of the American citizenship may start actually looking at the quality of the people we are voting into congress. Core values and guiding principles in people do matter!
Patrick Flesch, Gordon Flesch Company: We haven’t even had an entire week with the new tariffs and it’s clear that the country and world are polarized by what is taking place. Trying my best to stay apolitical on a topic like this, if you look at things from a practical view, our country is engaged in hundreds of trade agreements that are lopsided. Ultimately, the majority of these countries have a favorable trade relationship with the United States. Also, these countries are much more dependent on sending imports into the U.S. than they are on buying goods from America. In other words, almost every country that we trade with needs us more than we need them. In my opinion, this will cause a flurry of countries anxious for a seat at the table with Trump to strike a deal. Ultimately, I see this as leveling the playing field for America as it relates to trade. There is fear and panic right now, but I believe these tariffs will be short-lived.
We have certainly seen some buyer hesitation in the marketplace. On the other hand, we do anticipate some price increases in the near future, so we are trying to use that lever to close business when and where possible. We’ve also shifted our inventory strategy based on anticipated price increases, so we have loaded up our warehouses more than usual. Not the greatest thing for the company because that means we are sitting on cash for longer than we would prefer. Again, overall, I believe this will be short-lived, but we will see how other countries respond. I will close with this: if the U.S. is expected to be the trading partner to the world, provide military security to foreign nations, financial aid for countries in need or impacted by natural disaster, all while providing full access to our trading markets and most importantly our consumers, that isn’t going to be free anymore. The cost going forward for these U.S. benefits is tariffs.
Dan Strull, GoodSuite: We are in a wait-and-see mode. Living in California has made me become a stoic philosopher when it comes to things like this. With so many around us freaking out emotionally, we choose to take emotion out of it and try to be proactive when it makes sense and reactive when it makes sense. We have elected not to be proactive with anything tariff-related…thus far.
Sam Stone, Stone’s Office Equipment: While it’s a little too early to know the full impact of the tariffs, we will over-communicate with our clients and the businesses to which we have proposed new equipment. I think it’s long overdue and needed, and while not always popular, everyone will have to increase their prices (manufacturers). We’re telling businesses that if your equipment is at the end of the lease, or having mechanical issues, now is the time to replace it. Other than that, it’s all speculation.
Chris Gallagher, Green Office Partner: Dealers who have inventory will not be affected, so if it ends relatively quickly, it will not have an impact. If the tariffs are still standing in two to four weeks, I will be worried that increased pricing will be our only choice.
