‘I don’t have the cash to pay for these tariffs’: US small biz suffers

After working in the outdoor industry for three years at Smith, which makes helmets and goggles, Cassie Abel realised there were not many brands built exclusively with women in mind. In 2016, she founded Wild Rye, a rural Idaho-based outdoor apparel brand for women.

Building her business was a labour of passion and included big risks, such as leveraging her house for capital. It was not until 2021 that she became profitable. Now, her business faces yet another existential threat: High tariffs will drive up her costs, and she’s unsure how long she can keep her business alive.

Abel is expecting $700,000 worth of purchase orders arriving in July, which encompasses the brand’s full fall lineup, which she ordered in December from suppliers in China. She says Wild Rye, which imports twice a year, will now be subject to $1.2m in tariffs for its upcoming shipment.

“I don’t have the cash to pay for these tariffs. These tariffs are due upon entering the country. I won’t have time to sell this product before the tariffs are done. We could be out of business in the next four months,” Abel said.

Since taking office, United States President Donald Trump has imposed a 145-percent tariff on China and 10 percent on all other countries. The president has claimed the tariffs incentivise businesses to bring manufacturing back stateside. But that has left hundreds of small businesses like Abel’s scrambling to find ways to manage the hefty fee.

US Treasury Secretary Scott Bessent told a group of reporters at a White House briefing last week, “The goal here is to bring back the high-quality industrial jobs to the US. President Trump is interested in the jobs of the future, not the jobs of the past. You know, we don’t need to necessarily have a booming textile industry like where I grew up again, but we do want to have precision manufacturing and bring that back.”

His comments put additional pressure on employers like Wild Rye. To weather the storm caused by the Trump administration’s tariffs, Abel has frozen hiring, paused salary increases for her 11 full-time employees, and stalled new product development. She said she will need to raise prices on her products for the fall, ranging from 10 to 20 percent.

On April 29, she and hundreds of members of the outdoor apparel community met leaders in Washington to push for assistance. Abel said Democrats were unsure what they could do amid Republican control of the House of Representatives and Senate, while Republican leadership feared retribution if they went against the president.

“I was hearing it [concern] from both sides of the aisle. There’s frustration, it’s like it’s hard to find a path forward. Everyone understands that small businesses are going to crumble, and everyone feels like there’s no playbook for this,” Abel told Al Jazeera.

The US Chamber of Commerce has also pushed the White House to carve out exceptions for small businesses like Wild Rye, which the Trump administration quickly dismissed.

No comparable US alternative

Abel says she started as a made-in-USA brand, but that was not financially sustainable.

“That almost tanked the business before we launched because the US simply doesn’t have the capability or capacity to produce technical apparel,” Abel said.

Most textile products like clothes and shoes that Americans buy are not made in the US. The US imports about 97 percent of clothes, mostly from Asian countries including China, which has been hit hard by the 145-percent tariffs, but also from Vietnam and Bangladesh.

But it’s not just the apparel industry facing this challenge. It’s the entire small business community – defined as a business with 500 employees or less – a portion of the economy that employs roughly 61.7 million Americans, representing 45.9 percent of the US workforce and accounts for 43.5 percent of the US gross domestic product (GDP).

The broader economy has also already felt shockwaves from the tariffs that will impact small businesses. The US GDP fell in the first quarter, per the US Commerce Department, by 0.3 percent after a 2.4 percent increase in the fourth quarter of 2024. According to ADP, job growth stumbled to 62,000—a more immediate metric than the US Labor Department’s jobs report, which lags by a month and shows 177,000 jobs added.

Consumer confidence hit a 13-year low, and consumers are pulling back spending amid fears of further rising costs — which, in turn, means fewer people could buy products ranging from outdoor apparel to single-origin teas and spices.

‘In a tough place’

In 2014, Chitra Agrawal founded Brooklyn Delhi, an Indian cuisine-inspired food brand in Brooklyn, New York, with her husband Ben Garthus.

Over the last decade, they have created a range of products, including 14 different condiments and simmer sauces, that started as handmade and have since grown into a large-scale business distributing to major retailers like Whole Foods and Kroger, as well as meal kit services like HelloFresh and Blue Apron.

Brooklyn Delhi cofounders Chitra Agrawal & Ben Garthus brace for a rise in expenses as the business imports nearly 70 percent of its ingredients from outside the United States [Brooklyn Delhi]

Because hers is a specialty brand, sourcing certain ingredients from other parts of the world is not just part of the brand’s allure, it is also a necessity.

“We are making these authentic Indian products that require ingredients that are just not grown or available at scale in the US. It kind of puts us in a tough place,” Agrawal told Al Jazeera.

Agrawal said 65 percent to 70 percent of the ingredients she uses come from outside of the US, primarily from India, and a handful from Mexico and Sri Lanka, as well as glass from China.

AnjalisCup_FounderPortrait_photobyJustinHackworth_1731 copy-1746724710
Anjali’s Cup owner Anjali Bhargava says she will have to discontinue some of the brand’s products to stay afloat [Justin Hackworth/Anjali’s Cup]

Like Agrawal, Anjali Bhargava faces a similar challenge. The founder of Anjali’s Cup, a brand that makes single-origin spices and teas from around the world, sources ginger from Vietnam, turmeric from Thailand, and tea from India, ingredients that, in her view, make the brand so special.

In 2024, the United States was the largest importer of both ginger and several different varieties of tea, including black and green, according to Tridge, a global food sourcing data analytics firm.

“I am going to have to pay the tariffs on those things if it comes down to it, if I want to continue making those products. [Not being able to make these products] is not negotiable for me,” Bhargava said.

She says that in order to cut costs, she is trying to find domestic alternatives for aspects of her production, like packaging, a big expense. Pre-tariffs, she imported tins from China. Once her stock runs out, she may have to discontinue four to six of the 11 products she offers because she cannot afford the extra cost for imports.

“Basically, to keep the business moving, I’m being forced to undertake a complete overhaul of my retail packaging [which can be produced stateside], which means redesigning, re-photographing, and that comes with a cost,” Bhargava added.

She says she will need to move away from tins, which she imports from China and explore other kinds of packaging options like pouches. The unexpected one-time costs of $10,000 to $20,000 will eat into her already slim margins, Bhargava says. She is the only full-time employee, but hires freelancers and outsources to other businesses for tasks ranging from packaging to delivery.

Prices go up

Unlike larger companies, it’s much harder for small businesses to absorb the tariffs.

“We’ve seen that it’s hard for small businesses to balance those costs as they have very small margins. They are the ones who are going to get hit hardest,” said Alexis D’Amato, director of government affairs for Small Business Majority, an advocacy group for small businesses.

“They’re bracing for impact on how they’re going to either eat these costs or pass them on to the consumer, which nobody wants to do,” D’Amato added.

Raising prices in response to market pressures does not guarantee they will fall when costs decline. At the start of the COVID-19 pandemic, supply chain disruptions forced producers to increase prices. But even after costs eased, grocers kept prices high because consumers continued paying them — and no policy or market force compelled reductions.

That burden weighs on Agrawal.

“Once you make that change and say at one point, I want to roll back those price increases, there’s no guarantee that on the shelf, the prices will decrease. It’s very difficult when you’re working with grocery stores to get your prices to be lowered again. We have to really be very careful about this move. We’re still contemplating it,” said Brooklyn Delhi’s Agrawal.

But these looming concerns have led consumers and businesses to import goods before tariffs kick in, to stock up on key items that may help them avoid raising prices, at least for some time.

In the first quarter, US imports surged by 41.3 percent, including by entrepreneurs like Sean Mackowski, owner of Tallon Electric, a company that makes guitar pedals in Columbus, Ohio.

“We did stock up a lot. I think everybody did their best to scramble, hoping that that will bridge the gap to this going away. But if we get to the end of that bridge, we’ll either need to find a different way or we’re going to start running out of stuff,” Mackowski told Al Jazeera.

Israel intercepts missile launched by Yemen’s Houthis

Air raid sirens were heard in Israel as a missile was launched towards the territory by Yemen’s Houthis, who say they are retaliating against Israeli sites in solidarity with Palestinians in Gaza.

Israel’s military said it intercepted the projectile on Friday using its air defence systems.

There were no reports of injuries or damage from the missile attack, according to a military statement.

The incident came days after Oman said it mediated a ceasefire deal between the United States and the Houthis, with the Yemeni group saying the agreement did not include Israel.

Houthi rebels fired a “hypersonic ballistic missile” towards Ben Gurion airport near Tel Aviv, while also claiming a drone attack “targeting a vital Israeli enemy target” in the same area, according to the group’s military spokesperson, Yahya Saree.

Israeli media reported that air raid sirens were sounded in several areas across central Israel, with people receiving early warning mobile messages about the missile attack.

Israeli Defence Minister Israel Katz said that Israel would respond forcefully in Yemen and “wherever necessary”, describing the Houthi missiles as “Iranian”.

‘Going to strike back’

“The Israeli defence minister has released some comments saying that Israel is going to strike back with full force,” said Al Jazeera’s Hamdah Salhut, reporting from Amman, Jordan. “But these comments aren’t really surprising because we’ve heard them from Israel Katz previously when the Houthis had launched any sort of ballistic missile towards Israel.”

However, “this time it’s a little bit different because earlier in the week one of those missiles actually made impact … at quite a strategic location at the main airport inside of central Israel,” Salhut said.

Friday’s missile sent thousands of people “running towards shelters and safe rooms”, she added.

US President Donald Trump announced on Tuesday that his country would stop bombing Yemen as the Houthis had agreed to stop their attacks on US ships in the Red Sea.

But the Houthis have continued to fire missiles and drones towards Israel, most of which the Israeli military says it has intercepted, without casualties or serious damage occurring.

The Houthis have attacked numerous vessels in the Red Sea linked to Israel and its allies in what they state is an act of solidarity with Palestine.

According to Israeli media, the Houthi group has launched 28 ballistic missiles and dozens of drones at Israel since March 18, when Israel resumed its genocidal war on Gaza.

Israel has been waging a devastating war on the enclave since October 2023, killing more than 50,000 Palestinians, after a Hamas-led attack into southern Israel that month.

Pope Leo XIV holds first Mass

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Pope Leo XIV, the first US pontiff, called his surprise election a “cross” and a blessing as he celebrated his first Mass as pope in the Sistine Chapel. The Chicago-born missionary vowed to be a “faithful administrator” and said the Church must shine through “the dark nights of this world.”

‘I will run right over you’: New FEMA head issues warning to Trump critics

The new head of the Federal Emergency Management Agency (FEMA) in the United States has warned his staff that he will not tolerate any resistance to President Donald Trump’s agenda for the organisation.

Friday was the first full day of David Richardson’s leadership at FEMA, after the agency saw a shake-up at its helm earlier this week. But he began his tenure as head with a stark warning for the agency.

“I — and I alone in FEMA — speak for FEMA. I’m here to carry out the president’s intent for FEMA,” he reportedly told staff in an agency-wide call.

He predicted that 20 percent of the staff would oppose Trump’s vision for the FEMA, which he has pledged to dismantle.

“Obfuscation, delay, undermining. If you’re one of those 20 percent of people and you think those tactics and techniques are going to help you, they will not, because I will run right over you,” Richardson said.

“Don’t get in my way,” he added. “I know all the tricks.”

FEMA is the agency charged with coordinating and carrying out the federal government’s response to natural disasters and other emergencies, ranging from hurricanes and flooding to domestic attacks.

But it has long been criticised for lagging response times, inadequate resources and disorganisation, particularly during major disasters like 2005’s Hurricane Katrina, which displaced tens of thousands of residents in Louisiana and killed more than 1,300 people.

Trump has responded to such criticisms by pledging to do away with FEMA altogether and redistributing its functions to individual states.

“ When there’s a problem with the state, I think that that problem should be taken care of by the state,” Trump said in January. “That’s what we have states for. They take care of problems. And a governor can handle something very quickly, you know?”

During his campaign for re-election in 2024, he also spread falsehoods about the agency, including that it had refused to offer relief to Republican residents in North Carolina, which had recently suffered widespread flooding from Hurricane Helene.

Since taking office in January, Trump has followed through with his plans to restructure the federal government, reducing the funding and staff to independent entities like the United States Agency for International Development (USAID) and the Consumer Financial Protection Bureau (CFPB).

Trump and his allies have framed the cuts as necessary to combat “fraud” and “waste” across the government, though he has not offered definitive proof of wrongdoing.

At FEMA, an estimated 2,000 employees were terminated or accepted buyout offers to resign. A 2023 Government Accountability Office report indicated that FEMA only had 5,000 full-time staff members, as well as a group of reservists and emergency-response workers who could be called up to address a crisis.

To become the administrator of FEMA requires undergoing a Senate confirmation hearing and a vote.

But while those Senate hearings continue for high-level government positions, Trump has named interim leaders to govern the organisation in the meantime.

Cameron Hamilton was removed as acting administrator of FEMA after testifying at a House subcommittee hearing on May 7 [Jose Luis Magana/AP Photo]

Cameron Hamilton, a former Navy SEAL, served in that role since Trump started his second term.

He had been a prominent critic of FEMA during the administration of former President Joe Biden. But his time as FEMA chief came to an abrupt halt earlier this week, in the wake of an appearance before an appropriations subcommittee in the House of Representatives.

At Wednesday’s hearing, a Democratic Representative, Rosa DeLauro of Connecticut, asked Hamilton about the idea that FEMA could be shuttered.

Hamilton responded with measured opposition. “I do not believe it is in the best interest of the American people to eliminate the Federal Emergency Management Agency,” he said.

He added that it was ultimately not his decision to make and criticised FEMA as part of an “overextended federal bureaucracy”.

“I’m not in a position to make decisions and impact outcomes on whether or not a determination such as consequential as that should be made. That is a conversation that should be had between the president of the United States and this governing body,” Hamilton told the committee.

But the very next day, Hamilton was removed from his role as FEMA’s interim head and replaced by Richardson, a Marine veteran.

On Friday, White House Press Secretary Karoline Leavitt confirmed that Hamilton’s removal was related to his testimony at the subcommittee hearing.

“My understanding is that this individual testified saying something that was contrary to what the President believes and the goals of this administration in regards to FEMA policy,” Leavitt said. “And so, of course, we want to make sure that people in every position are advancing the administration’s goals.”

Critics, including Representative DeLauro, blasted the switch-up as indicative of a White House that will not tolerate dissent, even when necessary.

“The Trump administration must explain why [Hamilton] has been removed from this position,” DeLauro said in a statement. “Integrity and morality should not cost you your job.”

Richardson, meanwhile, has proceeded to set a stricter tone for his tenure, with his fiery Friday phone call. He warned FEMA staff that any actions not “within our missions” would be considered a waste of taxpayer funds.

“We’re going to find out how to do things better. We’re going to find out how to push things down to the states that should be done at state level. Also we’re going to find out how we can do more cost-sharing with the states,” he said.

Trump has been criticised for denying requests for assistance, including from Republican-led states like Arkansas, which suffered tornadoes during the week of March 14, destroying neighbourhoods. Multiple deaths were reported.

Arkansas Governor Sarah Huckabee Sanders — who worked as Trump’s press secretary during his first term — has written to the president to appeal his denial of aid.

“Since 2023, Arkansas has experienced an unprecedented frequency of disasters, with four federally declared disasters and ten state-declared disasters. These overlapping events have severely strained the capacity of state and local agencies to respond and recover effectively,” Huckabee Sanders wrote.