SEPTEMBER 10, 2024
Former President Donald Trump and Mark Cuban. Kamil Krzaczynski/AFP via Getty Images; Megan Briggs via Getty Images
- Mark Cuban warned that Trump’s planned tariffs would burden even the smallest business.
- Sweeping duties on imports would mean costly, time-consuming compliance, the “Shark Tank” star said.
- Cuban has argued tariffs would raise consumer prices, fuel wider inflation, and invite retaliation.
Mark Cuban has warned that Trump’s plan to impose sweeping tariffs on US imports would burden even tiny businesses with expensive, arduous compliance.
“I think one major point the discussion of tariffs is missing is the time and cost to businesses, even the smallest single person company,” the tech billionaire said in an X post on Monday.
“It’s a lot of work. It’s a lot of bureaucracy. It almost always required hiring a broker to deal with all of it. And of course there is the ongoing record keeping that each business is responsible for,” he added.
Cuban then listed the many steps involved in importing tariffed products according to Grok, the chatbot built by Elon Musk’s xAI company.
A typical business has to classify the product it’s importing and figure out the correct tariff rate, calculate what it owes, file a customs entry, pay the required duty, follow other regulations, and keep detailed records, Grok told Cuban. It might have to consult with a customs broker or trade specialist to ensure it’s compliant, it added.
Business owners might also spend time rejigging their products and operations to pay lower rates, adjusting prices to offset the tariffs, assessing how the tariffs affect their company’s competitiveness, and following trade news to prepare for any more changes, the chatbot said.
Threatening tariffs
Trump, the Republican nominee in November’s presidential election, has proposed slapping tariffs of 10% on virtually all US imports, and duties as high as 60% on products brought in from rival powers like China.
At a rally in Wisconsin on Saturday, he floated the idea of imposing 100% tariffs on countries that dump the dollar for other currencies as punishment for not doing business with the US.
Trump has championed his contentious tariffs as a tool to strengthen America’s position in global trade, and as a source of government revenue that could allow him to cut income taxes.
Cuban, a “Shark Tank” investor and a minority owner of the Dallas Mavericks, became a billionaire by founding an internet-radio startup named Broadcast.com in 1995 then selling it four years later to Yahoo for nearly $6 billion.
He was critical of Trump’s tariffs on China during his time in the White House and has slammed the Republican candidate’s threat of more of the same. He’s been a vocal defender of the Democratic candidate, Kamala Harris, and has taken aim at Trump several times.
In an X post on Sunday, he warned that “across the board tariffs are inflationary,” and “pretty damn stupid” as they might invite economic retaliation from other countries, and should have an economic rationale instead of a “personal vendetta” behind them.
Cuban also cautioned on X in mid-August that tariff-fueled inflation could push interest rates up, “exploding the national debt further.”
A couple of weeks later, he acknowledged that tariffs could spur companies to shift manufacturing to the US, potentially creating jobs and pushing down prices. However, he emphasized that this is a costly, yearslong process, and some of the materials and components that manufacturers need may only be available overseas.
“Tariffs are the worst possible incentive for all but a few products,” he said, adding that they “almost always” cost consumers more money.
Tariff pain and small business woe
Paul Krugman has been vocally against plans for fresh tariffs if Trump wins in November. STR/NurPhoto via Getty Images
Nobel laureate Paul Krugman has also panned Trump’s plans. In a July column, the economist cited research showing that tariffs only benefit the wealthiest Americans, and 80% of US consumers lose from them on a net basis.
He explained that lower-income households spend a bigger chunk of their income than the rich, so they’re hit harder by what’s effectively a sales tax.
“Everything says that the burden would fall on Americans, mainly the working class and the poor,” he said.
Cuban’s concerns about the impact of tariffs on small businesses come at a difficult time for many of them. His “Shark Tank” costar, Kevin O’Leary, warned last year they were struggling to borrow the money needed to pay their workers and bills after interest rates jumped from almost zero to over 5% in under 18 months. “The cost of capital has gone through the roof,” he said.
Courtesy/Source:Business Insider
