By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian small business adviser yesterday warned “everybody is scared as hell right now” given the “chaos and mass confusion” caused by Donald Trump’s daily-changing trade and tariff policies.

Mark A. Turnquest, founder of the 242 Small Business Association and Resource Centre, told Tribune Business some of his small and medium-sized (SME) business clients had informed him “this is the first time the immediate impact of a price hike has been felt so soon” even though the US president again reversed course yesterday by postponing tariffs on Canadian and Mexican imports for another month.

However, the uncertainty caused by the constant shifts in White House policy is disrupting US-based supply chains that Bahamian businesses of all sizes have come to rely upon. Mr Turnquest said clients, as well as his Association’s members, have told him that product shipments already paid for have suddenly increased in price after being caught by the tariff imposition earlier this week.

He told this newspaper that Mr Trump’s threatened trade war with the largest US trading partners has coincided with when many Bahamian companies typically place orders for fresh inventory after selling out of Christmas and New Year stock. And, warning that the “Easter special ain’t special no more”, he added that very few SMEs will “have no choice but to raise prices” as they have no short-term “Plan B” alternative.

“Everybody is scared as hell right now,” Mr Turnquest said of the ever-changing US trade and tariff policy. “I deal mainly with electronics and clothing retailers. Unfortunately, speaking with one of our members, he told me some of his product shipments had to be held up because of what happened. When he ordered them from vendors they had no tariffs on them.

“The price they gave him did not include the tariffs, but when he went back to get out the shipment - it was not his fault - he said they could not ship it at that price because of the 25 percent tariff because the clothing came from Mexico. He’s now dismayed. He’s thinking: ‘How could it happen so soon?’

“The vendor withheld the shipment for a couple of days because of the uncertainty. There is serious uncertainty in the US with reference to shipping anything from Canada or Mexico. A lot of vendors and clients of mine are saying some of the shipments are being held up because they don’t want the burden of buying or selling something and then find out they have to absorb a tariff cost at the back end.”

Mr Turnquest said many of his Bahamian SME clients are already “feeling the pinch” from the inconsistent US tariff policy, which has presently made it impossible to plan and budget accordingly. Tariffs are taxes levied by countries on imported goods coming across their borders, with the Trump administration justifying its stance by arguing Canada and Mexico are not doing enough to curb migrant and illegal narcotics flows.

The Bahamas, as a small, import-dependent economy that relies on external goods for most of its consumption, is especially vulnerable to tariffs and a potential ‘trade war’. Besides feeding into local inflation and further raising the cost of goods consumed in The Bahamas, the Trump policies also threaten to reduce American consumer confidence and disposable income.

Should that outcome occur, The Bahamas may see a slowdown in visitor numbers in its major industry, tourism. The worst possible outcome for this nation would be stagflation - inflation and a global recession occurring at the same time, which would likely result in job losses in The Bahamas.

Mr Turnquest, warning that no Bahamian will likely be spared if Mr Trump reinstates 25 percent tariffs on all Mexican and Canadian imports in a month’s time, warned of his clients: “They don’t have ‘Plan B’ right now. It’s very chaotic. They said the only thing they can do, all they have in common, is they have no choice but to raise prices to stay in business. When they re-order they will have to pay more.

“Right now, a lot of them said they don’t have a ‘Plan B’ for the next three months other than to pass on the price increase to their customers. They said this is the first time such an immediate impact of a price hike has been felt so soon. They got what I call blindsided in such a way that they have no alternative strategy in the short-term.”

With US-based freight companies and vendors also grappling with Mr Trump’s constantly-evolving tariff strategy, Mr Turnquest added: “It’s having a tremendously negative effect on my clients and they don’t have a ‘Plan B’. The uncertainty about these tariffs; is he going to add, not going to add? It’s causing chaos and mass confusion. We’re feeling it right now.

“I can tell you one thing. Prices are going up immediately when tariff-hit shipments come in. For wholesale and retail customers, prices will increase. There’s no spin to that. These tariffs will be a huge burden on small and medium-sized entrepreneurs in this country. We are in trouble in the short-term. We don’t know what’s going on in Trump’s head. We don’t like to operate with this type of uncertainty.”

Mr Trump yesterday appeared to pull back yet again from the brink of a trade war with his country’s major trading partners by delaying the imposition of tariffs on Mexico and Canada for another month.  Two days after imposing sweeping 25 percent tariffs on all imports both countries, the US president announced that duties on a wide range of products would be shelved until April.

Tariffs on Chinese goods imported into the US, though, remain doubled at 20 percent. Mr Trump had pledged to target Canada and Mexico with tariffs on his first day back in the White House but, upon his return,  said he was considering imposing the levies at the start of February. Last month, he offered Canada and Mexico a one-month delay at the 11th hour.

The Trump administration appears to be using tariffs as a tool to wrest economic and other concessions from other countries. But businesses, both inside the US and worldwide, have warned of significant damage to companies and consumers if it pushes ahead with this strategy.