Hello Q2, Hello Tariffs

The First Wave of Tariffs Just Hit

We’re all fucked if they hold.

But not likely for the reasons you think we are.

So this caught my eye the other day, it was released about a month ago on March 6, 2025.

If you sell non-essential goods this should have also caught your eye as well.

What it translates to is that the largest market for goods being bought is being propped up by a greater wealth gap than in recent memory.

So let’s give you a primer on Tariffs and how they actually work.

We, the US, say hey countries, we’re going to charge your a percentage for importing stuff into our country, not just stuff we can make here mind you, pretty much anything that we currently are getting from you.

The administrations claim is that the country pays the tariff, but the country isn’t the one that is importing things in most cases.

You see we became really reliant on outsourced manufacturing over the years and decided it was in our best interest to save costs by exporting our products of goods outside of the USA where the labor laws and costs were a bit more lax, you know in search of making the most amount of profit.

Then something funny happened, those countries embraced their role in the global trade and decided to heavily invest in manufacturing and technology as well as sourcing the raw materials needed for creation of goods.

If you can’t beat them, then you out efficiency them.

The irony here is, large corporations now have complex supply chains that require cooperation all over the world for parts.

Very few things can be made of 100% USA materials.

And these increased costs, they aren’t going to be absorbed by the companies, they are passed on to the end consumers by raising prices.

Now remember these are forced price raises, since the pandemic, businesses have been strategically taking advantages of shortages to raise prices more than they have in past years and the end consumer has been the one shouldering the burden through inflation.

This is a scary chart. During the pandemic spending shrunk and people were able to save a lot of money, then people raised prices and as you can see from the chart, we’re going down.

The cost of goods though has far outpaced inflation and wage increases leading to rising credit card debt and expenses.

So 50% of people that were cash strapped are getting more cash strapped and about to pass on goods if their prices increase that are non-essentials as essentials are going to go up in cost too.

Interest rates, yeah not coming down.

The only way out of this is going to be to print more money which will lead to hyper-inflation.

This is the dumbest political and economic move possible.

It serves only to move more wealth to the top who won’t be as impacted by the tariffs.

For small businesses, this is going to destroy them.

For the large marketplaces, say hello to private label and undercutting because their business isn’t based on selling goods it’s built off other services they offer.

You thought things were getting bad a few years back, this is a wholesale gutting of small businesses.

Plea: What you do next actually matters.

1. Get rid of waste

2. Cut overhead

3. Be smart about your margins

4. Be patient, a lot of businesses will die if these hold, just hang in there

5. Rely on your brand to move you past, you’re not competing on price anymore, you’ll lose to the big guys

Good luck out there!

Also, I revamped jonivanco.com and gave away my entire strategy for those that didn’t see it on linkedin.

Best,

Jon