MORE GOVERNMENT SUPPORT NEEDED
With less than half of the 90-day pause in US tariffs to go, the ASME said firms need to consider what happens after, including the likely reconfiguration of the global trading system.
The association also called for more government support to help SMEs enter new markets and integrate into a bigger supply chain network.
Skincare product company Theo10, for instance, has postponed its business growth plans and moved funds into purchasing more supplies.
The firm – which makes skincare products such as eczema creams and body washes – sources its materials from around the world, including Australia, the US and China.
When the US announced sweeping tariffs in April, the prices of such material shot up by as much as 30 per cent overnight, said the company’s director Theodore Khng.
He said the firm increased its bulk purchases when suppliers warned of a possible price hike after US President Trump secured a return to the White House.
“We had lesser cash flow for us to expand regionally, even though it was in the works,” Mr Khng added.
“We felt that securing our supply chain and the logistics issue was more pressing, rather than expansion, especially considering how unpredictable the issue may be.”
As tariff fears mounted and consumers tightened their spending, the company’s sales also fell by 15 per cent. This is despite efforts to entice customers with discounts.
Mr Khng said the situation has pushed its cash flow levels down to a “super thin line”.
“We do have reserves, but even our reserves are quite badly affected by the tariff news and all the uncertain economic moves,” he added.
“If we stretch a little bit more, it’s a very dangerous game for us to play.”
