AYESHA RASCOE, HOST:
When President Trump levied tariffs on China during his first term in office, many companies looked for alternative places to make their products. Countries in Southeast Asia were eager for their business and opened their doors. Today, half of all Nike shoes are made in Vietnam. After Trump slapped them with 46% tariffs last week, Vietnam is no longer so appealing.
Now, Hanoi and Washington say they are in talks, and the president suggested on social media that tariffs could drop to zero. But it's hard to know what will actually happen. Patrick Soong owns the Alliance Trading Group. They help U.S. companies find manufacturers in Asia to make their products. He's based in Portland, Oregon, but he's currently in Taiwan. Welcome to the program.
PATRICK SOONG: Pleasure to be here, Ayesha.
RASCOE: Tell me about your company. Like, how many clients, and what do you do for them?
SOONG: We are a sourcing product development and quality control company. We have about 50 customers, predominantly in the United States. They're comprised of mostly smallish businesses, single entrepreneurs to companies that range to about 20 to $100 million.
RASCOE: You source products from China, Vietnam, Thailand and Indonesia, among others, and now all of those are subject to these substantial tariffs. Where are you looking in order to get the best deal for your U.S. customers?
SOONG: The number that stood out was the Philippines. They showed a 17% rate, or I believe now it's 18%, versus the 46 you see in Vietnam, the 34 out of China, the 36 out of Thailand, mid-30s for Indonesia, Myanmar.
RASCOE: And does the Philippines have the necessities that your customers would need to get their products made?
SOONG: We're going to find out. I'm actually heading to the Philippines on Monday to touch base with some factories there and look and see what their capabilities are. There is predominantly a lot of manufacturing in the Philippines for certain components in certain types of industries, but it's definitely not as robust as you would find in Vietnam or in China.
RASCOE: Are any of your customers thinking, we'll just build a factory or use factories in the U.S., and then we won't have to worry about tariffs?
SOONG: It's just not that simple. That takes years. It takes dollars. It takes time to implement. In the United States, it's just too expensive. So you could throw 100% tariffs on a product in China. You're still going to get a better deal out of it than making it in the United States. It's still going to be cheaper overall to the final consumer. It's also been decades since there's been robust supply chain in the United States, and it's just not going to be that easy to find someone who wants to make a complex premium product for us.
RASCOE: Do you think that Americans want the jobs that are being done in China and Southeast Asia, like building parts for tripods, making shoes, making bags?
SOONG: I don't think so. These jobs are minimum wage jobs, slightly above minimum wage jobs, in Vietnam, in China, everywhere - factory jobs, assembling products, working with your hands. If you bring those jobs into the United States, you're probably going to get minimum wage or above minimum wage factory workers. And I just don't really understand why that's what the goal is, is to bring in jobs that are going to make it hard for the average American to put food on their table.
RASCOE: We don't know how this is going to shake out because President Trump has put tariffs on Canada and Mexico, then pulled back. And last week, Trump, after speaking to his counterpart in Vietnam, said he might drop the tariff rate to zero. But does that solve your problems? Do you then stop looking at other places?
SOONG: That's the problem with this, which is tariffs could be implemented within a moment's notice by just saying the word - I want 10%, 34%, 50% tariffs on whatever country it is. But the actual effects and the ramifications of it is if we're trying to move manufacturing, it takes years. In my opinion, these tariffs, all it does is stymie innovation. It's going to make people more hesitant to say, hey, I'm going to do the grueling work to start my own business and create my own product because, well, I'm not going to sell as many anymore.
RASCOE: That's Patrick Soong, the founder and CEO of the Alliance Trading Group in Portland, Oregon. We reached him in Taiwan. Thank you so much for joining us.
SOONG: My pleasure, Ayesha.
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