China-US Trade War: America's small businesses forced to raise prices

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The China-US trade war also harms small and medium firms in the US. And some of the companies are forced to pass down the extra costs to the consumers. CGTN's Hendrik Sybrandy reports.

This building in Colorado Springs is all about bringing folks joy. Elope sells headwear, costumes and accessories for Halloween and other occasions.

KEITH JOHNSON CEO, ELOPE "We make whimsical wearables."

Keith Johnson is the owner of Elope, one of many companies caught up in the U.S.-China trade dispute.

KEITH JOHNSON CEO, ELOPE "Ah, it's not fun to be in the middle of a trade war and your products being right there in the middle of it. This is a good one for China because this is China's national animal."

We first met a bearded Keith last fall shortly after a 10 percent U.S. tariff on $200 billion worth of Chinese imports went into effect. Most of Elope's one thousand-plus products are manufactured in China.

HENDRIK SYBRANDYDENVER "Since then, that 10 percent tariff on things like headwear, these ram horns are, yes, made in China, has gone up to 25 percent. That's 40 percent of his business. He can't absorb all of that increased cost which means."

KEITH JOHNSON CEO, ELOPE "We're going to have to raise prices, there's no doubt, and that's going to fall on the consumer. There's very little I can do about it at this point. I can just keep making great products and bringing them out to the public and hoping they love our products even if they're more expensive."

And now comes the specter of a new 25 percent tariff on all of Elope's remaining products. The Trump Administration says it's considering it. Keith figures half of these items will have to be marked up.

KEITH JOHNSON CEO, ELOPE "It's huge. It's not going to shut us down, but it's going to hurt badly."

Elope stands for 'Everybody's Laughing on Planet Earth.' The company, which is doing more and more business online, sells fun in all its permutations. It prides itself on being a positive place to work. But the trade issue hangs over its 50 employees.

CAROLYE ASFAHLCHIEF OPERATION OPTIMIZER, ELOPE "It can be challenging, and it's scary for people. And it's hard when you have these outside forces against us that can really impact that morale."

Elope's Carolye Asfahl says small and medium-sized firms are bearing the brunt of the trade dispute.

CAROLYE ASFAHL CHIEF OPERATION OPTIMIZER, ELOPE "It's the companies like us that are feeling this pain the most."

Along with, Elope says, workers in its Chinese factories who worry about smaller orders and whose profit margins are thin as it is.

FRANZI FU CHIEF FUN OFFICER, ELOPE "They are very stressed out. They are afraid. To them, it's a survival issue."

President Trump says the costs of the dispute are largely shouldered by China through its tariff payments. Keith disagrees.

KEITH JOHNSON CEO, ELOPE "Yeah, that's the biggest joke of them all because none of it's borne by China."

With no resolution in sight yet, he thinks tariffs will bedevil Elope for years which means they'll simply have to grin and bear it here. At least, they've got the grinning part down. Hendrik Sybrandy, CGTN, Denver.