The Trump administration not only expanded taxation on China but also plans to impose equivalent tariffs on other countries globally on April 2nd. US companies are currently exploring ways to minimize tariffs in order to maintain a competitive edge. The Small Business Administration (SBA) recently informed this newspaper that if 51% of your product is processed in the US, even if it is not entirely made in the US, you can save on taxes. Moreover, eligible products that are exported may also enjoy benefits such as loan subsidies.
Kelly Loeffler, a female entrepreneur from Georgia and former US Senator, confirmed as the head of the SBA, designated “Made in America” as one of SBA’s top priorities on her first day in office. She emphasized a commitment to supporting the “America First” agenda by strengthening the economy and national security through rebuilding supply chains and investing in manufacturing.
Apart from dismantling diversity (DEI) programs, suspending grants that do not comply with Trump’s executive orders, and halting green new deal projects, Loeffler announced restructuring SBA’s “International Trade Office” into the “Manufacturing and Trade Office.” She plans to collaborate with other institutions to expand the scale of innovative manufacturing and tech startups to boost the American blue-collar manufacturing sector.
With tariffs causing increased costs, Man-li Lin, the economic development commissioner for SBA’s New York district and an international trade official, encourages Chinese individuals to seize the opportunity by entering the American manufacturing industry to expand their business horizons.
Lin stated, “It is essential to start working towards this now. By establishing factories in the US, sales can be expanded globally, potentially reversing the trade deficit.” She added that by selling locally, one can benefit from tax incentives and also export to other countries, especially those in Africa with high demand. Lin emphasized that this trend is becoming increasingly popular among companies.
Recent inquiries from Chinese individuals prompted discussions on how to transform imported parts from mainland China into “Made in America” products through assembly in the US. Lin mentioned that as long as over 50% of the manufacturing process takes place in the US, the product can be labeled as American-made, a fact that many might not be aware of.
Guidelines on establishing a company, importing raw materials from low-cost countries, completing processing, packaging processes, and proving that over 50% of the product is American-made are being finalized through calculations and discussions with the Department of Commerce.
Lin also gave an example where importing healthy ingredients, processing them in the US into popular healthy snacks could potentially be lucrative, as many American snacks are overly sweet, leaving a gap in the market for healthier options. She concluded by stating, “By adapting to policy changes and seizing opportunities, individuals already in the US can leverage the advantages of local ‘Made in America’ production to expand and grow their new businesses.”
To support small business development, the SBA’s New York district will organize an “International B2B & Small Business Resource Forum” during “International Trade Month” in May. The event will facilitate one-on-one exchange between small businesses and governmental agencies and organizations at the city, state, and federal levels for assistance. Additionally, three expert-led seminars will cover topics on expanding business globally, securing government contracts for startups, and starting a business in New York. The event will take place at the Federal Plaza Conference Center (26 Federal Plaza, 6th Floor, New York, NY 10278) on May 9th from 9:00 AM to 1:00 PM. Registration email: man-li.lin@sba.gov.