President Donald Trump’s tariffs couldn’t come at a worse time for Aaron Emigh and his start-up technology company.
The firm, Brilliant, created a new smart controller for home devices that replaces a light switch and is set to launch in two weeks -- right about the time the next round of duties on Chinese imports could take effect.
The company has been developing the product for three years with a plan for pricing and profit margin that was upended when the administration proposed tariffs, which would affect Brilliant’s controller designed in the U.S. and made in China, said Emigh, the chief executive officer. The firm has already raised the price higher than it wanted but not enough to cover the increase in costs, he said.
“As a start-up company, you’re overcoming a lot of barriers already,” Emigh said. “You don’t need the government stacking the deck against you as well.”
Emigh is among those who testified Tuesday in Washington on the second of six days of hearings on U.S. duties of as much as 25 percent proposed for $200 billion in Chinese imports. Tariffs have already been imposed on $34 billion of goods and another $16 billion takes effect on Thursday, prompting in-kind retaliation from China.
Almost 350 individuals from companies, trade associations and other entities are testifying, most to oppose tariffs in response to allegations of Chinese theft of intellectual property and other unfair trade practices.
While the administration had said it wanted to avoid consumer products and target industries critical to China’s economic future, companies are lining up to complain that their bicycles, handbags, sports equipment and a swath of additional products across multiple industries are being targeted.
Element Electronics was forced to move some television assembly work outside the U.S. in response to the tariffs, and it will have no choice but shut down its South Carolina facility if proposed duties on imported components are implemented, said David Baer, general counsel.
“This has to be a mistake or unintended result,” Baer testified Tuesday.
Start-up companies are especially disadvantaged by the proposed duties because larger firms often have the resources to absorb higher costs and losses and more flexibility with their supply chain than start-ups, Emigh said.