Business owner pays tariffs using credit card points amidst rising costs
- Keeley Electronics is struggling with increased import costs due to tariffs on Chinese components.
- Robert Keeley used his credit card points to cover $11,000 in tariff-related expenses.
- The company's future pricing strategy may be affected if high tariffs remain in place.
In Oklahoma City, Oklahoma, Keeley Electronics, a small guitar pedal manufacturer with around 33 employees, is navigating increased costs due to higher tariffs on imported goods. The owner, Robert Keeley, stated that the company has been adversely affected by substantial tariff charges on key components, specifically potentiometers, which can only be sourced from China. His recent credit card bill, which included the shipping and tariff fees, amounted to nearly $11,000, compelling him to find unconventional ways to manage these costs. To alleviate these financial burdens, Keeley decided to utilize 1.8 million credit card points, accrued from previous purchases, in lieu of cash to cover tariffs. This decision demonstrates not only the escalating pressures on small businesses from international trade policies but also highlights the innovative strategies these enterprises must adopt to survive amid such economic challenges. Additionally, Keeley expressed that despite not having raised consumer prices yet, the ongoing high tariff rates on Chinese imports could force the company to reconsider pricing strategies in the near future, as maintaining profitability remains essential in his retail sector. He communicated a desire to keep manufacturing domestically in Oklahoma and continue providing local jobs despite these financial adversities. Overall, the situation underscores the precarious balance small businesses face between maintaining operational costs and meeting customer demands while navigating the complexities of international trade tariffs.