Rebecca Minkoff Co-Founder Rebecca Minkoff Talks Tariffs, Small Businesses
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Bloomberg Audio Studios. Podcasts, radio, news. With us now is Rebecca Minkoff. She is the founder and chief creative officer of Rebecca Minkoff. Rebecca, also part of a group of small business owners who wrote an open letter to President Trump and lawmakers urging tariff exemptions on small businesses. Rebecca, it's great to have you with us now. Tell us about the response. Have you heard back from any of the lawmakers?

We unfortunately have not heard back yet, but we do know that Trump is listening. As we know with the news, the most recent news, it seems like there is a willingness to listen, whether it's the noise we've made or that in general, small businesses are making across America. And we're crossing our fingers and hoping to get a meeting soon. How much would it cost to bring production here, Rebecca? I mean, what kind of upcharge would you be looking at? Is it anything compared to tariffs on China?

I think we have to first start with the infrastructure. There is no handbag infrastructure in America anymore besides a couple of small factories in New York City. So not only would we have to build a factory that could make the amount of units we're trying to make, but we'd have to bring back hardware manufacturing, bring back tanning and leather. I mean, these are all things that are purchased overseas and assembled, whether it's China or where we make in Cambodia and Vietnam. And so you're asking for...

you know, if you want this to really work, give us grants to build factories, give us several years of tariff breaks in order to make these things happen. And then we'd love to make an America. It just right now, if I were to switch everything to America, my price would double and my consumer is not here for that. You have spoken to so many other businesses in this letter. You've given some real world impacts and you've said that you guys are becoming unintended collateral damage in this escalating trade war. What do

you think are the things people really need to understand about how small businesses are faring right now, the damage that's being caused today? So the damage that's being caused today and some incredible female founded brands like Juliet Wines, Rightland, Olive Oil, State Bags is as a small business, we can't afford to absorb these costs like a bigger company can with

far larger negotiating power and we can't pass it on to our customers. So on the handbag side, we're actually choosing to take the margin hit, not pass it on to our customer because we know with the rising cost of everything else, you know, a $30 impact to her is truly meaningful. And so we are...

looking at over a billion dollars of damage that will be affected if this goes through with just 40 of the businesses that signed the petition. So we're urging Trump and lawmakers to truly listen to us and give us exemptions. Well, let's talk about what that means for you and your business, that decision to take the margin hit and to eat that cost. I mean, what does that mean for your planning? Do you have to pull back on hiring? Do you have to reduce headcount, pull back on maybe some planned expansions? What does that actually look like for you?

So ironically, the day that the tariffs were announced was the same week that we were in market selling for Q4 of this year. So our buyers came in all with very pulled back orders and conservative purchase orders, which affects our Q4 outlook.

And so once we know that business is going to be less than we thought it was, even if he changed his mind, they're not coming back and saying we're going to increase our orders because no one knows with all this uncertainty. So I can't tell you what the outlook looks like yet, but it is going to impact everything you just mentioned, unfortunately. And it's terrible because it impacts people's jobs, their livelihoods, and our ability to expand.

We just heard from Scott Besant and his comments on I think tax breaks were a little bit overshadowed by Caroline Levitt saying it was a hostile move by Amazon to show consumers the cost impact of tariffs. Amazon has now said, hey, we never planned on doing that anyway. So it looks like they've been successfully scared off of that. But I wonder,

to get back to his tax point and to underline what you were saying earlier. If they allow you to write off a factory, if they allow you to write off all of the equipment, you still need a reprieve on tariffs while you're building those things, right, Rebecca? So, I mean...

The tax carrot is great, but you've still got the tear of stick beating you from behind. Correct. And also we have to train and hire people who know the craft of making handbags. That's not something you just easily teach someone who graduates from college.

And so I think there's so many factors. We need time. You know, if this is going to happen, we need probably three to five years to build up the infrastructure to support this business again and then keep that going when the new administration comes in in four years and changes course. So it's really all about

how do we do this in a sustainable way that doesn't change the minute there's a new president. You know, you brought up some potential solutions here, including targeted grants, but I want to focus on the number one issue you brought up here, this idea of small business tariff exemptions. How likely do you think that scenario would be for there to be a threshold or by employees or revenue that could get you through the door in a way that

could help you out when the larger businesses might be disproportionately impacted in an easier way because they have the scale to deal with this? You know, I think that it's a creative idea. It gives us time. It helps ease a lot of these small businesses where the pressure and our minimums are so much lower. So we have a lot less leverage. We've seen it done with the

microchips and Apple phones. So if they're getting an exemption or they're not going to be charged, I think we feel as small businesses doing under $50 million, keep us alive. We are employing...

millions of people collectively and affecting livelihoods across the U.S. And so if you really want to make America great again, you should make sure that we don't go away because a lot of the brands I mentioned will go away. All right, Rebecca, a somber note to leave that on. Would love to stay in touch. Our thanks to Rebecca Minkoff.

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