Why a Tariff Costs More Than Money

When the Supreme Court told President Trump that he could not use IEEPA for his tariff authority, it affected $166 billion in tariff collections for over 53 million shipments. As a result, more than 300,000 importers could submit refund claims to U.S. Customs and Border Protection.

One of those applicants is the Massachusetts chair cushion manufacturer that invented the gripper.

Let’s take a look.

Tariff Refunds

Our story begins at the Klear Vu Corporation in Fall River, Massachusetts. A 60-year-old family-run business, Klear Vu makes chair cushions. Using fabric from China, they make the cushions in Massachusetts and then sell them to customers that include Walmart and Amazon. Klear Vu’s claim to fame was the gripper, an innovation that stops cushions from sliding.

Describing their business, Klear Vu emphasized how much it depends on Chinese suppliers for their quick and efficient textiles know-how. As Klear Vu’s co-owner explained, U.S. factories could not equal his Chinese manufacturers’ competitive prices, product variety, and speedy response to their requests.

Consequently, at the beginning of the second Trump administration, the tariffs on Chinese imports hit Klear Vu hard. Commenting on the 125% tariff, Klear Vu’s co-owner, Sam Cooper, said, “That was bananas. The 125 percent was totally wild. That is effectively a trade embargo.” The alternatives though meant triple prices from Turkey and, from others, as much as 10 years to develop the fabrics they needed. So, they asked their Chinese suppliers to share the expense and domestic retail customers to accept a price hike. But none of the support sufficiently offset the tariff expense.

At that point, they told China to hold up shipments. But they never laid off workers.

Our Bottom Line: The Cost of a Tariff

Owed tariff refunds (and paying for attorneys to get them), Klear Vu can never recoup its time, dollar, and emotional costs. In addition, returning to the gripper, we can wonder if the resources diverted by the tariffs are reducing future similar innovation at Klear Vu and millions of small companies like it.

It reminds me of what we’ve repeatedly said about the British coastline. Looking closer, we see so much more.

My sources and more: A good beginning, this WSJ article had some basic stats. But actually, it all began for me with this PIIE Trade Talks podcast. I also recommend going to the Klear Vu website.