Ryan Petersen, the Chief Executive Officer of Flexport, a prominent logistics company, has sounded the alarm on the potential fallout of ongoing US tariffs on Chinese goods, predicting that these economic policies could lead to devastating consequences for small businesses across the country. On a recent episode of 'The Prof G Pod,' Petersen disclosed that a staggering 80% of small businesses that rely on importing goods from China could face closure, leading to millions of job losses.

He emphasized the severity of the situation, pointing to the current 145% duty on many Chinese products, which he believes could precipitate what he termed 'mass bankruptcies.' Petersen remarked, 'You're talking like 80% of small businesses that buy from China will just die. And millions of employees will be unemployed.'

According to Petersen, a significant portion of consumer purchases from China consists of discretionary itemsnon-essential products that consumers may choose to forgo if prices rise significantly. He illustrated this point by referencing backyard pizza ovens, a popular item among consumers. 'When the price goes up 50% or more, you might just go out and buy pizza from Dominos or something, right?' he explained, highlighting the potential for consumers to shift their spending habits in response to increased costs.

Petersen expressed a belief that these circumstances could compel the US government to reconsider its stance in the ongoing trade war with China. His comments come amid an atmosphere of uncertainty, with many businesses feeling 'paralyzed' by the current tariff situation. Petersen noted that the unpredictability surrounding tariffs has left companies struggling to find alternative countries to source their products, especially after former President Donald Trump imposed duties on Canada and Mexicotwo of the US's closest trading partners.

Flexport, founded in 2013, has rapidly grown in stature and financial backing, raising an impressive $935 million in 2022, leading to an estimated valuation of around $8 billion.

Earlier this month, former President Trump indicated that he was beginning to reconsider the imposition of further tariffs on Chinese imports. Speaking from the Oval Office on April 17, Trump acknowledged that escalating tariffs could negatively affect consumer spending in the US. 'I may not want to raise tariffs even if China goes beyond its 125% duty on US goods,' he stated, adding, 'you want people to buy, and at a certain point, people aren't going to buy.'

This nuanced stance is in direct contrast to the rhetoric from China, which has dismissed US tariff proposals as mere 'numbers games.' The Chinese Ministry of Foreign Affairs has previously derided escalating tariffs as a 'joke,' asserting that they no longer hold any real economic significance.

In 2024, the US imported a staggering $438.9 billion worth of goods from China, according to the Office of the US Trade Representative, with China accounting for more than 13% of total US imports. The implications of these tariffs are not limited to small businesses; large enterprises are also warning of widespread economic disruption. For instance, the CEO of Southwest Airlines recently stated that the US airline industry is already experiencing a recession, underscoring the broader economic ramifications of the tariff regime.

In light of these developments, five small business owners from various states and industries have launched a lawsuit in the US Court of International Trade. They are challenging Trump's authority to impose tariffs under the International Emergency Economic Powers Act, arguing that such actions infringe upon constitutional limits on executive power.