The Trump administration said it and Chinese leaders negotiated a temporary truce, bringing tariffs down to around 30%.
Author: Lauren Davis
Published: 7:38 PM EDT May 16, 2025
Updated: 7:39 PM EDT May 16, 2025
The Trump administration has struck a temporary trade truce with China. The tariffs reached as high as 145% before the pause and the tariffs now sit at 30%, but importers could still see higher taxes in the future.
Michael Kofoed, an assistant professor at the University of Tennessee, said the recent tariffs are above the “standing tariff” that has effectively been treated as the baseline import tax for a while before President Donald Trump’s second term.
“Everything that the Trump administration has proposed has just stacked on top of that,” he said.
For Scale Trains, a 30-employee small business that has been making model trains for 11 years, these tariffs are making a big impact. Its president, Shane Wilson, said products that are normally sold for around $300 faced price hikes of up to around $500. After the Trump administration and Chinese leaders announced temporarily reduced tariffs, he said the price would still rise about $20.
“We’re still absorbing quite a bit,” he said.
The company partners with Chinese manufacturers because no other countries have the capability to put in the detail it takes to make these model trains. Wilson said the it’s the “only place in the world” where the company can get detailed, ready-to-run model trains.
“There is no factory anywhere in the world ready to accept customers like ourselves here in the United States,” he said. “Here in the United States, we estimate that would cost well over $10 million. If we go somewhere — there’s a lot of suggestions about India, Thailand, places like that — you’re still looking at a startup cost of well over $5 million.”
Rising tariffs could also change more than the price of the product. He said if tariffs return to their high rates, then the company would need to lay off employees and downsize the business.
“If they go sky high again, if we see like another 145%, it’s gonna be virtually impossible to survive that,” said Wilson.
Kofoed said there’s not much the company can do to weather the trade war. He said that small businesses like Scale Trains have to face uncertainty as they try to stock shelves and plan for the future.
“Since they serve such a niche market, they need that certainty in order to be able to price and distribute their product efficiently, and they’re not going to get it right now,” said Kofoed.
For now, Wilson said Scale Trains will keep chugging on.
“Over the next couple of months, we really hope that our governments get together and come to a really well-executed trade agreement that works well both for the United States and for China,” said Wilson. “We do support the president’s agenda of reducing those trade deficits of restoring free trade, protecting our national security, and taking care of the American worker, and I think it’s important for folks to understand it is great to bring American manufacturing or jobs back to America.”
He said that he wants leaders to protect existing American jobs and pursue ways to create new employment opportunities.
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