In a shocking twist of economic fate, Robert Keeley, owner of Keeley Electronics in Oklahoma City, reveals that his business is grappling with an eye-watering 100% increase in tariffs on vital components for his guitar effects pedals. This small business, which employs over 30 people and generates roughly $5 million in annual sales, now faces the grim reality of 55% tariffs that threaten not just his bottom line but the very existence of his company.
Oklahoma Business Suffers Under Crushing Tariffs
Keeley’s predicament stems from a critical component in his pedal production: the potentiometer. As reported by KFOR, the recent spike in tariffs has escalated costs from a manageable 25% to a staggering 55%. This increase has forced Keeley to explore creative solutions, including redeeming millions of credit card reward points to offset the financial strain. However, this is not a sustainable business model.
Impact on Workers and Local Economy
The repercussions of these tariffs extend beyond Keeley himself. With a labor force of 33 employees, any financial turbulence directly impacts the livelihoods of those workers. Keeley mentions that he has been absorbing costs rather than passing them on to consumers, which could soon change if the tariff situation does not improve. As the owner of a small business, he is acutely aware of the precariousness of his situation. "Any of these things are kind of a tax on my bottom line," Keeley laments.
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Tariffs as a Tax on Small Business Growth
The implications of Keeley's struggles are emblematic of a larger issue facing small businesses across the country. With the Biden administration's tariffs and trade policies often touted as measures to protect American industries, the unintended consequences for local businesses like Keeley Electronics reveal a stark contradiction. According to Oklahoma.gov, the state offers a relatively reasonable labor rate, but the recent tariff spikes are making it increasingly difficult for businesses to thrive.
Small Business Survival in a Hostile Economic Environment
As Keeley navigates these financial hurdles, he expresses a desire to maintain his pricing for as long as possible. However, he acknowledges that the prolonged uncertainty surrounding tariffs means tough decisions lie ahead. "I’m spending about $8,000 to $10,000 a month on tariffs," he states, highlighting the burden placed on businesses that are already operating on thin margins.
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Political Ramifications and Future Outlook
With a looming deadline set by President Donald Trump for a 90-day freeze on tariffs, Keeley’s hopes for relief hang in the balance. The political machinations surrounding trade agreements can often seem distant from the realities faced by small business owners. Yet, as Keeley’s story illustrates, these decisions have real-world consequences that can jeopardize jobs, livelihoods, and the very fabric of local economies.
The situation encapsulates a broader narrative of economic justice, where the struggles of small business owners must be placed in the context of systemic inequality and the fiscal policies that govern them. The struggle for survival amid soaring tariffs reveals the urgent need for policies that prioritize small businesses and hold large corporations accountable.
