The Trump administration put a 90-day pause on most tariffs as countries try to negotiate new trade deals with the United States, but the tariffs Donald Trump imposed on goods from China have remained in effect.
Small business owners in the United States who rely on China for materials and manufacturing have begun to speak out about the impact on their bottom lines, including a former Shark Tank contestant, Beth Benike, who has been in the headlines for her criticism of the policy.
Kevin O’Leary (a.k.a. Mr. Wonderful) did not invest in Benike’s Busy Baby business when she pitched him and his fellow sharks in 2020, but, on Monday’s show, he told Megyn he has been sent her recent interview with The New York Times’ The Daily podcast some 2,000 times and explained why he supports the crackdown on China.
Tariff Trouble
Last week, Benike was on The Daily to discuss the impact the tariffs were having on Busy Baby, which makes silicone placemats for highchairs and strollers to prevent toys and utensils from falling on the floor. The company uses materials that are sourced in Asia, and the products are manufactured in China.
Benike was asked what will happen to her costs when the tariff rate on China rises from 104 to 145 percent. She said she would be forced to pay $229,000 in tariffs on $158,000 worth of product. “We would have to come up with that in the 30 to 40 days it takes for the product to get to the U.S.,” she explained. “And I can’t get any more loans. I’m fully leveraged. I have my house on the line already. I can’t get more loans. I can’t come up with that kind of money.”
“I’m not okay. I’m scared for my friends. I’m scared for myself,” she added. “Like, they don’t understand this is certain death for us.”
O’Leary has been a vocal supporter of Trump’s tariff plan as it relates to China. And while he acknowledged tariffs will result in stories like Benike’s, he said there are also scores of companies that have been dealing with a different – though no less destructive – problem.
“We also have stories of hundreds of companies that have been on Shark Tank that also manufactured their product in China and as soon as it gets to $5 million in sales domestically, the same factories that are making it there knock it off and sell it at a 40 percent discount because they never have to recoup the R&D that the company put into making the product in the first place,” he explained. “They get wiped out in a different way. They get wiped out by China… [and] Chinese companies use the American legal system to sue American companies after they have knocked them off. Why is that okay?”
‘Squeeze the Pimple’
He believes many are finally waking up to what those who have long tried to do business in and/or with the country have long known. “They want to become the supreme economy… by stealing [intellectual property] from everybody, including American IP,” O’Leary explained. “They don’t play by the rules of the World Trade Organization (WTO)… they just don’t give a sh-t… and the only way to change their behavior is to show consequence.”
The U.S. has “not ever done that,” he said, but Trump is trying. “This administration has decided there are consequences to stealing IP… and not giving access to the markets, and using our capital markets but not playing by the rules of GAAP, and all of these things are coming to a head,” O’Leary said. “I do business in China, I’ve been royally screwed… and I speak for millions of entrepreneurs that have been screwed in China for 20 years. We’re done. Fix it.”
“I want to do business in China. I’m willing to compete with the Chinese on a level playing field… I have nothing against the Chinese people. I don’t like their government. I don’t like their policy,” he continued. “It’s time to clean this mess up once and for all… And yes, there are going to be stories of that poor woman’s situation, but these tariffs are not going to be forever.”
He likened the situation to popping a pimple. “They are going to keep squeezing until the acne is gone and it’s going to get ugly, but it’s going to get resolved because China can’t afford not to have access to the world’s largest economy… Otherwise, everybody is unemployed there,” O’Leary concluded. “I’m okay with this volatility. I’d like to get it fixed. I want the other tariffs to get worked out… but China? Squeeze the pimple there.”
You can check out Megyn’s full interview with O’Leary by tuning in to episode 1,053 on YouTube, Apple Podcasts, or wherever you like to listen. And don’t forget that you can catch The Megyn Kelly Show live on SiriusXM’s Triumph (channel 111) weekdays from 12pm to 2pm ET.