Lauren Greenwood started YouCopia with her father Mark in 2009. The Ravenswood company makes kitchen and organizational products and has built its business over the years, now offering more than 100 items sold by retailers including Target and Walmart.
Over the last six months, though, the company’s staff has dwindled, costs have gone up, Greenwood is concerned about the future.
Tariffs imposed on goods from China are a big reason. They’e having an impact on YouCopia.
“We started the year with 21 employees and now have 11,” Greenwood said. “We started the year poised to grow, but everything has changed. I hope we can hang on.”
Other Chicago-area housewares companies, whose goods are mostly manufactured in China, also say tariffs are costing them more and shrinking their already-narrow profit margin. If the higher tariffs continue, they said, the survival of their companies are in jeopardy.
A survey in May by the International Housewares Association reported that 87% of its responding members said they have been affected significantly by tariffs, and 90% have delayed or canceled shipments. It also found 62% of those surveyed said they’ve increased prices charged to consumers. And 27% reported cutting the number of workers they employ.
The survey also found that 8% of its members have shifted manufacturing to the United States.
The association is behind the Inspired Home Show, a Chicago trade show held every March that involves more than 2,000 brands.
“Our members are telling us the current landscape is extremely challenging and making it very difficult for their businesses to succeed,” according to Derek Miller, the group’s president and chie executive officer.
YouCopia imports its products from China — about 100 shipping containers of goods a year. It has three months of inventory, but tariffs have prompted the company to slow its orders from Chinese vendors.
“We had a production stop when the tariffs were at 145%, and then, with the announcement of the pause, our rate came down to 34%, and we restarted shipments, but the pace is slower,” Greenwood said.
The company was paying a 6% tariff before President Donald Trump increased taxes on imports from China earlier this year.
In May, the United States and China agreed to roll back most of the tariffs the countries imposed on each other and declared a 90-day truce. The White House said it would reduce its 145% tariffs to 30%, while China said it would slash U.S. tariffs from 125% to 10%.
Widgeteer, a household goods company in Crystal Lake, slowed its imports because of high tariffs. Founder Bill McHenry said it’s down to one shipping container from China from two to three containers a month.
“Right now, our rate is 60.5% of the value of the goods, so it’s still huge,” McHenry said. “A container we’re bringing in next week is valued at $80,000. So I have to come up with $49,000 in duties and taxes, and I can’t absorb all that.”
He said the company’s glassware is manufactured in China and accounts for 40% of Widgeteer’s business.
“We have very unique glassware that cannot be produced in the United States,” McHenry said. “Really, China is the only place we can find it. The quality of the factories in China for some products is really second to none.”
Before Trump’s tariff increases, McHenry said, the company paid tariffs of 3% to10%. To offset some of the recent increased costs, he reduced the work week to four days for Widgeteer’s 12 employees.
Tracey McGhee, founder of Ms. Jetsetter, said her Bronzeville travel accessories company will not be able to absorb increased tariff costs. If the tariffs on China are not significantly lowered in the next eight to 10 months, she said her business might not survive.
“We don’t have deep pockets,” McGhee said. “We need every little margin we can get.”
Greenwood said moving production away from China would be difficult.
“The stuff we produce is not feasible to manufacture in the U.S. at a price that consumers would be willing to pay,” Greenwood said. “I know because we’ve tried. We had multiple conversations with factories in the Midwest, and the math just doesn’t work.
“The problem is the uncertainty,” she said. “We can’t plan our business investing when we don’t know what the cost of production in each country is going to be.”
McGhee said the uncertainty already has cost her some business.
“I was recently at the Inspired Home Show and engaged with a couple of people,” she said. “There was an opportunity that would have helped my business scale with a reputable retailer and another with a distributor, who would have helped get my products into new markets.
“But then the tariff discussion caused us to put a pause on those conversations.”