NOEL KING, HOST:
Over the next week or so, more than 300 business leaders will come to Washington, D.C. They'll be testifying in public hearings about the Trump administration's proposal to put more tariffs on Chinese imports. Gail Ross is one of those business leaders. She's the COO at Krimson Klover. The company's based in Boulder, Colo., and makes women's outdoor and ski clothing. They have eight employees.
Gail, thanks for coming in.
GAIL ROSS: Thank you for having me.
KING: So you're testifying tomorrow. What are you going to say?
ROSS: Basically, we're a very small business. And the timeline of this tariff is very short. And I want to describe a little bit about our development timeline and when these tariffs go into - we don't have a date yet of when these tariffs are going to go into place. But I just think that people aren't really understanding how they affect the small business.
KING: And in what ways do they? In what way do you rely on trade with China - your company?
ROSS: So our company - for example, we have five factories. They're all in China, two of them we've worked with for the last 10 to 15 years. And the other two are fairly new. But our production is such that we make jacquard-knitted sweaters, high-end sweaters, cashmere, merino sweaters. And it's just machinery that's not - that doesn't exist all over the world. You can't make this product in the United States. Literally, the machinery does not exist. You can make it in Vietnam, for example. You can make it in some countries in Europe. But those production runs are three to four times higher than we get out of China, so that's the kind of detail that I think is missing.
KING: The detail that you're - the details that you're saying is it's easier and cheaper to do business in China.
ROSS: You know, frankly, it's not really about being cheap. It's about where you can go to get the capacity you need...
KING: In order to get the job done.
ROSS: ...In order to get the job done.
KING: Right. Now, I know your company has been in D.C. before, testifying at these hearings because you've been hit by previous rounds of tariffs.
ROSS: No.
KING: Oh, this is your first time.
ROSS: Yup - first time.
KING: But you've been affected by the tariffs.
ROSS: Yes. So the third list dropped last September, I want to say. And at that time, two products we make - bags and totes - were on the list. And we - frankly, we put the 25% tariff in our pricing.
KING: So the customers paid it.
ROSS: So the customers paid it.
KING: Got you - I...
ROSS: And sales were down in those two areas, but the customers paid it. And we didn't lose 25% of our margin.
KING: Did you have to cut jobs, though? - because a lot of companies will say, we've just had to...
ROSS: Right. So the third tariff - the third list did not affect us that poorly. The fourth list, which is what just dropped in May - so the dilemma there is - our pricing was set last October.
KING: OK.
ROSS: So we've taken orders at a certain price that doesn't include the 25% tariff. Now, this tariff is being - you know, the list came out May 3 - 13. And every single product we make is on this list, meaning every single product we make that is on the water today could have a 25% tariff. So that leaves us in the position - well, OK. Do we pass that on to our customers who have already given us orders? Or do we absorb it?
And, you know, neither of those - you know, if you pass it on to the customer, they're going to cancel or reduce their order. We're going to have all this inventory. Or if you absorb it, 25% is a lot for a very, you know, lean, little company. So to your question, have we lost jobs? We have not lost jobs yet. But there's eight of us now. We have openings for three people. Those positions are put on hold.
KING: Three positions put on hold that you can't hire yet because of the threat of tariffs - Gail Ross, the chief operating officer of Krimson Klover in Colorado.
Gail, thanks so much for coming in.
ROSS: Thank you. Transcript provided by NPR, Copyright NPR.
