Her Business Was Thriving. Then Came the Tariffs.

Summary

Podcast Summary: "Her Business Was Thriving. Then Came the Tariffs."

Podcast Information:

• Title: The Daily
• Host/Author: The New York Times, Hosted by Michael Barbaro
• Episode: Her Business Was Thriving. Then Came the Tariffs.
• Release Date: April 14, 2025
• Description: The Daily delves into the biggest stories of our time, featuring in-depth discussions with the world’s top journalists. This episode explores the profound impact of sudden tariff increases on a thriving American small business.

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1. Introduction

The episode opens with Michael Barbaro introducing the significant economic upheaval caused by President Trump’s sudden imposition of tariffs against China, escalating to an unprecedented 145%. These tariffs have radically altered the business landscape for numerous American companies, potentially threatening their very existence.

2. Entrepreneurial Journey of Beth Benneke

Guest: Beth Benneke, CEO and Founder of Busy Baby

Beth shares her inspiring journey from a military background to entrepreneurship. Growing up in Southern Minnesota as the daughter of a small business owner, she was inspired by her father's entrepreneurial spirit. After serving in the Army alongside her brother in Europe and Iraq, Beth transitioned to civilian life, starting a family and venturing into the business world.

Quote: "If you would have told us that in Iraq, we would have just laughed."
— Beth Benneke [03:31]

3. Success and Recognition

Beth details the creation of Busy Baby, a company born out of a practical need she identified as a new mother. Initially prototyping with household materials, she successfully launched her product in 2019. Her appearance on Shark Tank in 2020 was a turning point, leading to explosive growth and significant sales milestones.

Notable Achievements:

• Lifetime Sales: Over $15 million
• Retail Expansion: Launched in Walmart (November) and Target (recently)
• Recognition: Awarded Small Business Person of the Year for Minnesota by the Small Business Administration

Quote: "The first time I got an order from someone I didn't know of, and then they left me a positive review, I knew that like, everything was gonna be okay."
— Beth Benneke [08:24]

4. The Impact of Tariffs

The heart of the episode centers on the devastating impact of Trump’s tariffs on Beth’s business. Initially budgeting for a 20-30% tariff, Beth was blindsided when tariffs surged to 145%, making it financially untenable to continue importing her products from China.

Key Points:

• Tariff Increase: From a planned $30,000 to an actual $85,000 at 54%, and then to $164,000 at 104%
• Financial Strain: Market value of goods was approximately $158,000, making tariffs exceed product value
• Business Risks: Potential loss of revenue, inability to pay employees or loans, risk of losing her home

Quote: "It's devastating. I cannot bring this product into the US Now. I don't have that kind of money."
— Beth Benneke [14:26]

5. Financial and Emotional Toll

Beth candidly discusses the emotional and financial strain the tariffs have imposed. She reveals the severe personal risks, including leveraging her house for business loans and grappling with dark thoughts about the future of her family and business.

Emotional Struggles:

• Fear for the Future: Concerns about losing her home and sustaining her family
• Mental Health: Previously overcame a dark period with support and coping mechanisms; now fears for others in similar situations

Quote: "I have to take out additional loans to cover that cost. So I have SBA loans through my bank, but because I already had other debt, I had to leverage my personal property as collateral to get the loan."
— Beth Benneke [11:46]

6. Strategies and Challenges in Overcoming Tariffs

Beth explores various strategies to mitigate the impact of tariffs, including the impracticality of relocating manufacturing to the U.S. due to high costs, lack of infrastructure, and specialized manufacturing requirements. She also discusses the unethical and illegal methods some consider, such as country of origin fraud.

Challenges Highlighted:

• Manufacturing Costs: Setting up a sterile manufacturing facility in the U.S. would cost nearly $400,000, excluding tariffs
• Technical Expertise: Lack of domestic expertise in specialized compression molding required for her products
• Regulatory Hurdles: Potential legal issues with alternative repackaging strategies

Quote: "None of it makes damn sense. ... I honestly don't think that we can bring manufacturing to the US and be good at it."
— Beth Benneke [25:08]

7. Future Outlook and Resilience

Despite the overwhelming challenges, Beth remains resolute. She aspires to pivot her business towards international markets, aiming to transform Busy Baby into a global brand. Her resilience is underscored by her commitment to her family and employees, and her determination to adapt and overcome adversity.

Vision for the Future:

• Global Expansion: Exploring international distribution to maintain sales
• Business Adaptation: Learning new methods to sustain and grow the business outside the U.S.
• Personal Determination: Emphasizing the importance of not being a victim and teaching resilience to her children

Quote: "I'm going to show my kids that you just have to adapt and overcome. There's always a way."
— Beth Benneke [29:44]

8. Concluding Thoughts

The episode concludes with Beth expressing her disappointment at the Trump administration's exemptions for large tech companies from tariffs, which she perceives as unfair to small businesses. Her heartfelt plea underscores the broader implications of protectionist policies on American entrepreneurs.

Final Reflection: Quote: "It's very disheartening to see that announcement today and see that big corporations don't have to worry about the tariff. They're, they're fine. They don't have to pay it, but the rest of us do."
— Beth Benneke [31:49]

Key Takeaways:

• Economic Policies Impact Small Businesses: Sudden tariff hikes can cripple emerging enterprises.
• Resilience is Crucial: Entrepreneurs must adapt swiftly to survive in volatile markets.
• Support Systems Matter: Emotional and financial support networks are vital for small business owners facing crises.
• Policy Considerations: Fairness in economic policies is essential to ensure all business tiers thrive.

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Notable Quotes with Timestamps:

• "If you would have told us that in Iraq, we would have just laughed." — Beth Benneke [03:31]
• "The first time I got an order from someone I didn't know of, and then they left me a positive review, I knew that like, everything was gonna be okay." — Beth Benneke [08:24]
• "It's devastating. I cannot bring this product into the US Now. I don't have that kind of money." — Beth Benneke [14:26]
• "I have to take out additional loans to cover that cost. So I have SBA loans through my bank, but because I already had other debt, I had to leverage my personal property as collateral to get the loan." — Beth Benneke [11:46]
• "None of it makes damn sense. ... I honestly don't think that we can bring manufacturing to the US and be good at it." — Beth Benneke [25:08]
• "I'm going to show my kids that you just have to adapt and overcome. There's always a way." — Beth Benneke [29:44]
• "It's very disheartening to see that announcement today and see that big corporations don't have to worry about the tariff. They're, they're fine. They don't have to pay it, but the rest of us do." — Beth Benneke [31:49]

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Conclusion: This episode of The Daily provides a poignant look into the struggles of small business owners amidst abrupt economic policy changes. Through Beth Benneke’s story, listeners gain insight into the challenges of entrepreneurship, the fragility of small enterprises in the face of global economic shifts, and the profound personal and professional toll such policies can exact.

Transcript

[Beth Benneke]

This podcast is supported by Betterment.

[Michael Balboro]

Don't just imagine a better future. Start investing in one with Betterment. Whether it's saving for today or building wealth for tomorrow, we help people and small businesses put their money to work. We automate to make savings simpler. We optimize to make investing smarter. We build innovative technology backed by financial experts. For anyone who's ever said, I think I can do better, so be invested in better with Betterment. Get [e-mail] investing involves risk performance not guaranteed. From the New York Times, I'm Michael Balboro. This is the Daily. Last week, when President Trump raised tariffs against China to an astonishing 145%, he radically changed the cost of doing business for thousands of American companies. So much so, in fact, that many of those companies may not survive. Today, the story of one of those businesses. It's Monday, April 14th.

[Beth Benneke]

All right, it's recorded.

[Michael Balboro]

Okay. Well, thank you for Beth making time for us. We really appreciate it. How are you doing over there?

[Beth Benneke]

Oh, not good. Not good at all.

[Michael Balboro]

You look ever so slightly raw.

[Beth Benneke]

Yeah, well, I just talked to my best friend who from the army. We met when we were serving together, and so I filled her in, and, you know, she's feeling hopeless and helpless with me.

[Michael Balboro]

Now we're going to get to why this has been such a trying moment for you because of the terrorists. I want to start by having you tell us the story of your company. And just to begin, tell us the name of the company and then tell us the story of how you went about creating this company.

[Beth Benneke]

So my name is Beth Benneke, and I am the CEO and founder of Busy Baby. I grew up in Southern Minnesota, the daughter of an entrepreneur. My dad has a small business. He's a welder. So I grew up in his business, and I grew up wanting to have my own business as well. Why?

[Michael Balboro]

What was it about watching your dad have a business that he didn't want to?

[Beth Benneke]

It was the freedom. It was the being able to leave work and come to my softball games and choose the work he wants to do and turn away the work he doesn't want to do. Being in control of your own destiny. But what he always told me is, you know, you really gotta be passionate about what you're doing. Because when hard times hit, and they absolutely will, if you're not passionate about what you're doing, you're not gonna make it. So when I finished graduated high school, I wasn't passionate about anything other than not going to college. I tried it and wasn't A big fan and a recruiter called me out of the blue, and I ended up joining the military. So I joined the Army. I convinced my brother to join the military. So we served together in Europe, we deployed to the war in Iraq, and we started in Kuwait before the war started. And so, like, to bring that around now, now my brother runs busy Baby with me.

[Michael Balboro]

Oh, wow.

[Beth Benneke]

And we always joke about 20. What's it been like, almost 22, 23 years ago, when we were sitting in the desert, you know, throwing little rocks at a bigger rock, waiting for something to happen, did we ever imagine we'd be schlepping baby products out the back of our cars at the state fair? Like, just. If you would have told us that in Iraq, we would have just laughed.

[Michael Balboro]

Well, how did you end up getting from there to busy baby? What's the story of how you go from army to entrepreneur?

[Beth Benneke]

Yeah. So after the army, it took me a few years to readjust to civilian life. So I settled back in. In Minnesota. I found a great corporate job and I met my now husband and we started a family. So I had taken the full three months of maternity leave that my company offered and went back to work. And when I went back to work, two of my stay at home mom friends took me out for lunch. Their girls were adorable, but a complete distraction the entire meal. Just doing what babies do. You know, they reach for everything on the table, they drop things on the ground. We couldn't finish a conversation.

[Michael Balboro]

You know, I have two toddlers. I know exactly what you're referring to.

[Beth Benneke]

Exactly. So I just went online. What am I gonna buy on Amazon that's gonna make it so my kid's not this distraction when he's old enough to join us at the table? So I did the search on Amazon. My friend said, you know, you really need to make sure you have a clean surface to put baby's food on, because you never know what they're wiping these tables down with. If you put the stuff on the plate, the plates get thrown on the ground. I said, well, okay, cool. Yes, we need that. But I also want to attach their toys so that they can't throw them on the ground.

[Michael Balboro]

And nothing like that quite existed.

[Beth Benneke]

No, no. There's been a million pacifier clips where you can, like, attach stuff to their clothes. And then there's regular placemats that you can, like, they had. I think at the time it was pretty much just disposable placemats that you could, like, stick down to the table. And I wanted something that was going to be reusable. And an idea popped in my head. And that night I went home and I got, like, silicone caulk that you use to, like, caulk around your sink or your bathtub, whatever, and I squirted it into a quarter baking sheet. And then I started cobbling together something that might work. That developed into me buying some silicone dog mats off of Amazon and suction cups. And then I used another set of, like, my husband's fishing tethers to glue attachment points to the top of the placemat. So now there was a mat where you could put the food, and then also these little fishing tether things where I could just change out toys and just hook up the toys. And because it was suctioned to the table, baby didn't throw it onto the ground.

[Michael Balboro]

So how do you end up turning this prototype into an actual product?

[Beth Benneke]

Yeah, I mean, I didn't even know it was called a prototype at the time, or a minimum viable product, I now know is the term. The most important step was to find a professional who knew how to do that, because I certainly did not. So I found my product developers in Utah, and they held my hand all the way through the manufacturing process. We did look for manufacturing in the US and because we were at such a small scale, it wasn't a fit for us to be able to start in the US So we started in China.

[Michael Balboro]

Just explain that. I mean, why did it feel impractical to start developing products here in the.

[Beth Benneke]

US it comes down to costs and volume. So it is very expensive to manufacture in the U.S. obviously, the cost of labor is very high, but most of the raw material that we use in manufacturing, like for us, we use silicone, which comes from silica, which is not readily available and sourced in the US So for us to import the raw material was more expensive than importing the product in its finished packaged form.

[Michael Balboro]

Wow.

[Beth Benneke]

So that's one aspect of it. But so for the factories that do exist in the us, they typically have very high minimum order quantities. So you would have to start off with 10 or 20,000 units to make it worth their time to set up the line. I mean, there's a lot of work that goes into a manufacturing line, Setting up the machinery, how you're tying it up, so nothing else can get produced. Getting the material ready. China was willing to do a minimum order quantity, that first round of a thousand units, which is a heck of.

[Michael Balboro]

A lot different than 30,000.

[Beth Benneke]

Exactly. And unlike, you know, maybe tech startups or other small businesses, that get funding I was bootstrapping. I sold my car, I used my tax return. I borrowed $35,000 from my stepdad. I still owe him that, actually. So I ended up doing a 5,000 unit run because I wanted to do multiple colors. So when I launched the product in 2019, I blasted my entire email list. Probably like old high school boyfriends. Got an email saying I was launching a baby product and the initial orders were mostly from friends and family. But the first time I got an order from someone I didn't know of, and then they left me a positive review, I knew that was like, everything was gonna be okay.

[Michael Balboro]

Next up is a solution to a.

[Beth Benneke]

Common problem for babies. So part of my original email list that went out when I launched the product included a Shark Tank producer whose email I had gotten previously when they were looking for veterans to feature on the show. Hi, Sharks. My name is Beth Fimbo. I'm from Rochester, Minnesota, and I'm here seeking $250,000 for 5% of my business. Busy baby. Wow. That ultimately led me to being on Shark Tank. I filmed during the pandemic in 2020 and then aired in March of 2021. One shark is out, but Lori is interested in Beth's baby placemat. Busy baby. I'm going to give you an offer. It'll be a little aggressive.

[Michael Balboro]

I mean, this is incredible. So suddenly you find yourself on the premier television show for small businesses trying to break out and basically have your idea validated by these ultra rich, successful business people. As you can tell, I was a fan of the show.

[Beth Benneke]

So I'm gonna offer you the 250,000, but I'd like 20%.

[Michael Balboro]

Whoa.

[Beth Benneke]

Would you be willing to do it for 10%? 10%? No. I think 20% is good. I think 20%. It was the most amazing experience. It was surreal. I would love to do this with you for 15. I can't go past 15. Wow. I just can't. For me, the bottom line would be 18. I can't do it. I can't. I just. I know what I've done and I.

[Michael Balboro]

Know what I want.

[Beth Benneke]

When an entrepreneur sticks to their guns.

[Michael Balboro]

And what happened after you were on the show? To the business.

[Beth Benneke]

Thank you for your time. Fantastic to you. Thank you, guys. I am rooting for you. Thanks. I just. I'm very confident in myself and my plans and what I'm doing, and I really think I can do it. I just wasn't willing to give up 18%. The weekend we aired, we had about six weeks worth of sales in three days. It's unreal. We sold so many busy baby mats. It was just amazing.

[Michael Balboro]

And for those who don't have the mat, how much does this cost? What are you charging people?

[Beth Benneke]

We have a line of products that range from 10 to $30. But the hero product, the one everybody knows from Shark tank, that runs $30 retail.

[Michael Balboro]

So what does your business look like? Pretty much up until a week or so ago. Just how big has it gotten?

[Beth Benneke]

I mean, I think lifetime sales were over 15 million.

[Michael Balboro]

Wow.

[Beth Benneke]

There's my brother and I full time. And then we have three other full time employees. And then we, we just brought on two part time employees to help us. I was just named. Actually, less than a month ago, the SBA gave me a wonderful Small Business.

[Michael Balboro]

Administration, Federal Small Business Administration.

[Beth Benneke]

Small Business Administration was awarded me Small Business Person of the Year for Minnesota Molotov.

[Michael Balboro]

That's fantastic.

[Beth Benneke]

And then this past November, we launched in Walmart for the first time. And then just last month, we launched in Target. For a business our size, that's massive.

[Michael Balboro]

Huge.

[Beth Benneke]

It was years of effort to get there.

[Michael Balboro]

I mean, how are you financing all of this? Because the former retail reporter in me knows that this is expensive. And you said you, you don't have outside investors. This is a fully owned business by you. So how are you paying for all this product?

[Beth Benneke]

So I think what a lot of people don't know is you make a contract with the retailers, you agree to a certain price that they're going to pay for your product, and then it's a risk for me. Like we don't know how it's going to sell, but we know we have this contract and it lasts a year and we've made the guarantee that we're going to supply them with product for this year. And so I had to take out additional loans to cover that cost. So I have SBA loans through my bank, but because I already had other debt, I had to leverage my personal property as collateral to get the loan.

[Michael Balboro]

I just wanna make sure I understand this. So in order to finance the amount of product required to be in these major national retail chains, you take out loans that are in part personally guaranteed with your house as a form of collateral.

[Beth Benneke]

Yep, big deal. Got it. Big deal, Big risk. Big risk. And every small business that eventually ends up in one of those retailers, it's the biggest risk.

[Michael Balboro]

Okay, so now of course, I want to turn to the subject at hand, which is the tariffs. You've been experiencing all the success over the past many months. So I'm curious What do you think to yourself when Donald Trump is elected and starts to talk about what he describes as Liberation Day tariffs that he's promising are going to rebalance global trade? What are you thinking and what are you doing perhaps to prepare for them?

[Beth Benneke]

I mean, we, we expected the tariffs up until that point. We, we haven't ever paid tariffs. Our product falls into a category that hasn't had tariffs. We pay tax and duty, but we haven't had tariffs to date. So we knew that was going to be a new thing for us. And we budgeted, expecting reasonable tariffs of 20 to 30%.

[Michael Balboro]

But you budgeted for those?

[Beth Benneke]

Yeah, we knew that was coming. An overwhelming number of people voted Donald Trump into office, and he talked nonstop that that was something that was going to happen. So we expected to have tariffs. Never in a million years would I expect that tariff would be 145%. Never.

[Michael Balboro]

Which is what it is right now.

[Beth Benneke]

Yeah, that's what it is today. Now, let's just give it a couple hours. It might be something else this afternoon.

[Michael Balboro]

Well, in a word, what has it been like for you and your business for that 145% tariff to become your reality?

[Beth Benneke]

It's devastating. I cannot bring this product into the US Now. I don't have that kind of money. And what that means then is if I can't bring in that product and I run out of what's in my warehouse now, then I no longer have revenue coming into my business. And what that means is I can no longer pay my employees, I can no longer pay my loans to which my house is leveraged against. And in about six months, I could very, very possibly lose my home.

[Michael Balboro]

We'll be right back. I'm Brian Rosenthal. I'm an investigative reporter at the New York Times. My dad is a scientist. My career has been devoted to scientific teaching and research. I remember growing up, I didn't fully understand what he was doing every day. But now that I work as an investigative journalist, I do understand. So you have to start with facts. From those facts, a hypothesis appears, and then you work on trying to test that hypothesis. I do the same thing, obtaining documents, crunching the data, and I talk to as many people as possible to get to the bottom of the story. The New York Times does not publish until we can prove that something is true. The best scientists are able to do that deep work because they receive funding from their university or from the government. We as journalists, depend on funding from subscribers. You can support that type of work by subscribing to the New York Times. Beth, walk us through the logistics of what it started to look like immediately after the tariffs go into place.

[Beth Benneke]

Yeah. I currently have two to three months worth of product in my warehouse. We just finished production of another two to three months of product. It was supposed to get on a ship two days ago.

[Michael Balboro]

From China to the US From China.

[Beth Benneke]

To the US and that was the day that tariffs jumped up to 54%. I have somewhere. Give me a second. I want to pull out my numbers so I can tell you specifically the effects. All right, we're going to do a little math. So for us, that meant Instead of the $30,000 tariff we had budgeted for, it now was $85,000.

[Michael Balboro]

And how much is the product itself worth?

[Beth Benneke]

The product itself is worth 158,000.

[Michael Balboro]

So suddenly you're faced with a potential $80,000 tariff on about $158,000 worth of goods. Do I have that right?

[Beth Benneke]

Yeah, 85,000 for the 54%. And we. We don't have that. But we have good margins. We could survive that. And we thought, well, maybe we can do a GoFundMe, because maybe right now in this political climate, people would be willing to give us 20 bucks to help us get through this so that we don't have to raise our prices or go out of business. It wasn't devastating yet the next day when it went up to 104%.

[Michael Balboro]

Right.

[Beth Benneke]

That math is $164,000.

[Michael Balboro]

And at that point, the tariffs are gonna cost more than the value of the goods, right?

[Beth Benneke]

Yep. So that no longer makes business sense for me. I would have to double the price of my products. People are not going to pay double the price of my products. And especially my people. I'm selling my products to new moms and dads. They're buying diapers and formulas and other things that are about to get a whole lot more expensive for them. It's already hard enough to be a new parent and to buy all the things you need to buy that you're not used to buying. People are only going to buy what they need.

[Michael Balboro]

Okay, I shudder to ask this. What happens to the tariff costs you would bear once the tariffs go from.

[Beth Benneke]

104 to 145%, $229,000.

[Michael Balboro]

Just the tariff you would pay on $158,000 worth of product, and we would.

[Beth Benneke]

Have to come up with that in the 30 to 40 days it takes for the product to get to the U.S. wow. And I can't get any more loans. I'm fully Leveraged. I have my house on the line already. I can't get more loans.

[Michael Balboro]

Yeah, I mean, that's.

[Beth Benneke]

I can't come up with that kind of money.

[Michael Balboro]

That's an astonishing number.

[Beth Benneke]

Once it hit over $100,000, there was no way we could afford to import our products anymore. And that's when we decided to just abandon it in China until we could figure something out.

[Michael Balboro]

Right.

[Beth Benneke]

So the products are currently sitting at my factory. They've graciously offered to store them for us at no cost until we can find a new direction.

[Michael Balboro]

I mean, at this point, you have this product over there in China. You have, I think you said several months worth of inventory here in the US So you're kind of in a face off with the administration. You know, who breaks first, the tariffs or you?

[Beth Benneke]

Well, here's the thing. I'm not in a face off with the administration because I'm not a player in the game. I'm a pawn. There's literally nothing I can do. And I was coming up with strategies, but then any strategy I came up with, I'm afraid to execute it because the policy changes every 24 to 36 hours.

[Michael Balboro]

I mean, what would be one strategy that you thought about pursuing?

[Beth Benneke]

One strategy, which I have now since learned is illegal. But what a lot of people are talking about and are recommending is export your products to a different country, repackage them, and then re import them to.

[Michael Balboro]

The US Basically take your product from China, send it to Indonesia, Thailand, then import it to the US but you.

[Beth Benneke]

Still have to make a change to it. You have to make a physical change, the product, the packaging. So we were thinking, well, we have some friends, personal friends that live in Australia. We could send it to Australia. We could then have them help coordinate repackaging, and then import it from Australia. And with the 90 day pause, we'd only pay 10% tariff. But that is country of origin fraud. So instead I'm pivoting, I'm shifting gears. I'm going to try to find a way to sell it in another country. There are babies all over the planet. I unfortunately cannot sell it to Americans once I run out of what's in my warehouse right now. Unless something changes, obviously. So I'm gonna start looking for ways to sell it overseas.

[Michael Balboro]

Have you contemplated doing what these tariffs are fundamentally and explicitly designed to force you and everyone to do? And I'm guessing by your reaction that something about that isn't so practical, but what it's supposed to do is encourage you to start manufacturing in the United States?

[Beth Benneke]

Yep. That's what it's supposed to do. I have gone very deep down the research rabbit holes for my options for producing in the U.S. we did try to produce in the U.S. initially. Once we got started and had market validation, we did work with a company in Minnesota to try to produce it here. There are some nuances to our type of manufacturing. We have compression molding, which is a different kind of manufacturing machine than typical. We have the requirement to be a clean facility because our products go in baby's mouth.

[Michael Balboro]

Right.

[Beth Benneke]

So it has to be a sterile facility. It can't just be any old factory. So Now I have two options. I'm very fortunate that I have a 10,000 square foot commercial space in my building that's available for lease. I could build my own factory in there. Like I own the building. I could build my own factory. So if we just like quickly look at that route, I got pricing for the machines that I need. I need eight different machines to make my products. The total of that, if I bought the machinery from China, would be just under $400,000.

[Michael Balboro]

Wow.

[Beth Benneke]

Now do I have to pay 145% tariff on top of that to get the machinery to be manufactured?

[Michael Balboro]

Probably.

[Beth Benneke]

So now we're doubling my cost to even set up manufacturing. But let's just say I don't. Then I have to find somebody with the expertise to set up the manufacturing and to run the manufacturing. But because this type of manufacturing doesn't really exist in the US Right now, there's no expertise in the US to set this up for me. Now we have to talk about the cost of importing the raw material, the Silicon Valley and the tariff on top of that. Then we have to talk about the downtime I have. So I told you I got two to three months worth of product in my warehouse right now. It will take 12 to 18 months. If I had the money, if I had the expertise to get this set up. Now that's just one production line. I actually have eight products and with one production line, I can do 100 units per day. I sell more than that.

[Michael Balboro]

Wow.

[Beth Benneke]

So I would have to buy multiple production lines for that one product. Now I have eight other products or seven other products beyond that. So just the pure cost. Okay, let's just scratch that idea. You're saying that it's just totally impractical financially, logistically. And in the end, my product is going to probably have to be three times more expensive for the consumer. So I guess I'm better off paying the tariff because that's less. So let's scratch that idea. Let's say magically, we find a factory in the US that has the exact machinery, the clean environment, and access to the raw material, which is still imported and tariffed, and they're willing to work with me. Awesome. Let's do it. The first step is to create molds. That process takes four to six months in itself for one mold and costs me somewhere around 100,000 to $120,000.

[Michael Balboro]

Wow.

[Beth Benneke]

So you tell me how I'm supposed to do this. How am I supposed to do this? And now you're cutting off all my income.

[Michael Balboro]

I'm hearing you say that domestic manufacturing of the kind that this is intended to encourage is simply financially impractical for you.

[Beth Benneke]

When you cut my legs out from under me with no notice, and I can't even save money or seek investment or come up with any kind of plan. I can't even sell the products I've already paid to have made in the U.S. because I can't afford to bring them into the U.S. nobody can afford to this quickly move to the U.S. with manufacturing. We don't have the infrastructure. We don't have the raw materials. We don't have the expertise.

[Michael Balboro]

It feels like you have learned as a small business person some pretty valuable lessons about the nature of free trade that are very much at odds with what they are proposing here. And I wonder how you would articulate those lessons.

[Beth Benneke]

You know, it's just. None of it makes damn sense. My husband's a farmer. We grow corn and soybeans. He's out planting today. Minnesota is really good at growing crops. We have great soil. We have intelligent farmers. We have great equipment. China is really, really good at manufacturing. I love my team in China. We send each other gifts. They send me videos. They love making my products. We have a great relationship. I would love for every country to do what it is best at and be able to thrive on what they're good at. I. I honestly don't think that we can bring manufacturing to the US and be good at it. We already have enough hard enough time with the businesses that are currently here finding good workers. Who's going to work in these factories?

[Michael Balboro]

I'm going to ask you a question that I imagine might sound insensitive, but I think to do justice to what the President claims he's up to, I do need to ask it. And it's that if you listen to him carefully and those around him, what they're saying is that the system we have now is broken and that fixing it, in their estimation, so that it becomes a country where manufacturing flourishes is gonna involve some real short term pain. You obviously are that short term pain. And so how do you think about the idea that on some level the president might know that a business like yours needs to suffer to get to where he thinks. Not everyone even thinks it's possible, but where he thinks the country should go and can go.

[Beth Benneke]

It reminds me very much of basic training in the military. When you go through basic training, they break you down and then they build you back up and you're stronger because of it. In theory, that's a great difficult, but great way to do things in certain circumstances. However, this is not short term pain. This is immediate death to thousands of small businesses.

[Michael Balboro]

So let's say that the tariffs remain in place for some time. We don't know that for sure. We're talking to you on Friday. Oh, my goodness. Are you okay? I'm just looking at the screen and seeing that you're not okay.

[Beth Benneke]

I'm not okay. I'm scared for my friends. I'm scared for myself. Like, they don't understand this is certain death for us. It is certain death for so many of my friends and myself. Not in the literal sense of. Actually, no, I'm not gonna say not in the literal sense, because the very first thought that came to me when he announced the 104% tariff was, at least I have. At least I have life insurance so that there's a way my family can still have a home. And I immediately caught myself.

[Michael Balboro]

And that's why, Wait, I can't even. I can't even contemplate what I think you're just saying.

[Beth Benneke]

Yeah, no, you. It's in a dark place.

[Michael Balboro]

You're saying that the darkest possible thoughts briefly go through your head when you contemplate what it would mean to lose all this.

[Beth Benneke]

Yes. Because there's nothing more important to me than my family and my kids and them having a place to live. And even though this was not a mistake I made in my business, so two years ago, I made some business mistakes just because I'm a new business owner and entrepreneurship is hard. And so a couple years ago, I got into a dark place and I sought help, and I got help. And since I went through that two years ago, I made sure that I have developed a network of people to reach out to people I can talk to, people I can commiserate with, people I can lean on medication that I can take should I need it. I am afraid for all of the Small business owners that are doing this on their own, who don't have someone to lean on or the coping skills because this is like the biggest tsunami that just came out of nowhere and crushed our entire country. For small business owners, I am okay, but now I'm worried about everybody else who doesn't have it. Have that.

[Michael Balboro]

The question I was going to ask you before you got justifiably quite emotional was whether or not you have at all prepared yourself, not just financially, but just kind of emotionally for what it would mean to have this amazing business that you have built from scratch go away if that does happen.

[Beth Benneke]

No, I'm not prepared for that. I'm not even allowing myself to consider that. I'll find a way. Cause I refuse to be a victim. Yeah, I refuse to be a victim. I refuse to quit and I refuse to fail. And I'm not gonna teach my kids to be a victim or to give up. I'm going to show my kids that you just have to adapt and overcome. There's always a way. There's always a different thing you can do. You're never stuck. It's hard. It sucks. But it's a great lesson for them to learn as well.

[Michael Balboro]

And how do you think this is going to end?

[Beth Benneke]

I think it's going to end with us learning new things and new ways to do business. What I'm visioning is we're going to learn how to do international distribution and more babies around the world are going to get to have our products. And then eventually this is going to work out where we're going to have a global company. It's not going to just be, you know, my American small business. I'm going to have a global brand. So as much as it hurts right now, that's my goal. I'm going to figure this out. And in the end, I will have a global brand.

[Michael Balboro]

I hope you'll have a global brand, but maybe not an American one.

[Beth Benneke]

Maybe not.

[Michael Balboro]

Beth, I really appreciate you making time for us. Thank you.

[Beth Benneke]

Thanks for having me.

[Michael Balboro]

Over the weekend, at the urging of big tech companies, the Trump administration said that it would exempt smartphones, computers and other electronics from its tariffs against China.

[Beth Benneke]

Hey, team. New York Times, the Daily. This is Beth Benneke with just a follow up to our conversation from the other day.

[Michael Balboro]

Shortly after, Beth sent us a voice memoir.

[Beth Benneke]

You know, I'm spending all my time and energy right now trying to figure out how to bring manufacturing back to the U.S. but companies like Apple and Microsoft, who are in probably the best position to be able to do just that, to be able to bring manufacturing back to the US they no longer have any motivation to do so. They're exempt from the tariffs. It's not going to affect them. So what motivation do they have to bring manufacturing to the U.S. it's, it's very disheartening to see that announcement today and see that big corporations don't have, don't have to worry about the tariff. They're, they're fine. They don't have to pay it, but the rest of us do. Foreign.

[Michael Balboro]

We'Ll be right back.

[Beth Benneke]

Hey, I'm Tracy Mumford. You can join me every weekday morning for the headlines from the New York Times.

[Michael Balboro]

Now, we're about to see a spectacle.

[Beth Benneke]

That we've never seen before. It's a show that catches you up on the biggest news stories of the day. I'm here in Red Square. We'll put you on the ground where news is unfolding.

[Michael Balboro]

I just got back from a trip out to the front line and every.

[Beth Benneke]

Soldier and bring you the analysis and expertise you can only get from the Times newsroom.

[Michael Balboro]

I just can't emphasize enough how extraordinary this moment is.

[Beth Benneke]

Look for the headlines wherever you get your podcasts.

[Michael Balboro]

Here's what else you need to know today. On Sunday, Secretary of State Marco Rubio said that the United states has sent 10 more members of gangs to El Salvador, suggesting that the White House is doubling down on its controversial strategy of deporting hundreds of suspected gang members with no due process. The administration has portrayed those deportees as violent criminals or terrorists. But court papers have shown that the evidence on which the government has acted was often little more than whether they had tattoos or had worn clothing associated with the criminal organizations. And Elon Musk is drastically reducing his estimate of how much money his Department of Government efficiency will save US Taxpayers. In the past, Musk has said that his team's work could shrink the next fiscal year's federal budget by $1 trillion. Now Musk anticipates saving about 85% less than the original estimate. Today's episode was produced by Olivia Natt, Will Reed and Stella Tan. It was edited by Mark George, contains research help from Susan Lee, contains original Music by Pat McCusker and Rowan Amisto and was engineered by Chris Wood Arthur. Theme music is by Jim Brunberg and Ben Landsverk of Winterly. Special thanks to Jessica Chung and Claire tennisgetta. That's it for the Daily I'm Michael Balboro. See you tomorrow.