My Company Is Getting Hit Hard By The Tariffs

Summary

Podcast Summary: The Ramsey Show Highlights – "My Company Is Getting Hit Hard By The Tariffs"

Release Date: April 19, 2025

In this insightful episode of The Ramsey Show Highlights, hosted by the Ramsey Network, listeners are delved into the real-world challenges businesses face amid fluctuating economic policies, specifically focusing on the impact of tariffs. The episode features a compelling discussion between Dave Ramsey and George Kamel, addressing a caller's predicament and extrapolating broader financial advice applicable to both personal and business finances.

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1. Caller’s Dilemma: Navigating Tariffs and Job Security

Timestamp: [00:06] – [05:43]

Isaiah, a caller working for a medical supply company, shares his concerns about recent tariffs affecting his employer. Having shifted their import operations from China to Mexico a few years prior, the company is now experiencing significant losses—losing approximately 17-18% of their business—due to increased costs from these tariffs. Isaiah is currently on Baby Step Two of Dave Ramsey's financial course, actively paying off debts and following structured financial advice. However, the uncertainty brought about by tariffs has him questioning whether to continue making extra debt payments or to prioritize saving due to potential job insecurity.

Notable Quote:

Isaiah [05:43]: "For probably two, three years."

Isaiah provides a clear picture of his financial landscape: $15-16K in consumer debt and $36K in student loans, with an annual household income of $120K. Over the past five years, the family has managed to pay off 70-80% of their debt, but the current economic strain is putting additional pressure on their financial stability.

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2. Assessing the Impact of Tariffs on Business Operations

Timestamp: [01:02] – [04:18]

Dave Ramsey probes deeper into Isaiah's situation to understand the extent of the tariff impact. The dialogue reveals that a significant portion of the company's inventory is sourced from Mexico, and the tariffs are effectively reducing profit margins without a corresponding loss in overall business volume. Ramsey emphasizes the broader economic implications of tariffs, likening them to "taxes" and expressing his dislike for such measures.

Notable Quote:

Dave Ramsey [02:00]: "Tariffs become taxes. It’s just that simple."

This section underscores the challenges businesses face when fixed contracts prevent them from passing increased costs onto customers, thereby eroding profitability. The fixed price agreements, such as locking in the cost at $1 per needle, now result in losses due to the increased tariff-induced costs.

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3. Strategic Financial Decisions: To Pay or Save?

Timestamp: [05:26] – [07:04]

The conversation shifts to strategic financial planning amidst economic uncertainty. George Kamel suggests that Isaiah should continue paying off debt aggressively while simultaneously preparing a fallback plan in case of layoffs. The consensus between Ramsey and Kamel is clear: do not halt debt payments, but also prepare for potential financial downturns by maintaining liquidity and exploring alternative job opportunities.

Notable Quote:

George Kamel [06:35]: "We're gonna push pause on life and just stack up cash."

This balanced approach advocates for maintaining financial discipline through Ramsey's Baby Steps while also staying adaptable to unforeseen circumstances, ensuring financial resilience.

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4. Guidelines Over Headlines: Building Financial Resilience

Timestamp: [07:12] – [09:34]

Ramsey introduces the concept of "guidelines versus headlines," emphasizing the importance of adhering to proven financial principles rather than reacting impulsively to alarming news headlines. With the economy teetering between stagflation and potential recession, Ramsey advises listeners to focus on building an emergency fund, eliminating debt, and creating a robust financial plan that can withstand economic turbulence.

Notable Quote:

Dave Ramsey [07:39]: "We got to be focusing on the guidelines. The stuff that we teach makes you recession proof."

George Kamel reinforces this by highlighting the necessity of not owing money and having an emergency fund, ensuring that personal finances remain stable regardless of external economic pressures.

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5. Business Diversification and Backup Planning

Timestamp: [08:30] – [09:54]

The dialogue expands to discuss business diversification and the importance of having backup suppliers to mitigate risks associated with relying on a single source. Using Isaiah's situation as a case study, Ramsey points out that businesses must diversify their supply chains to avoid catastrophic losses if one supplier is compromised by geopolitical events or other disruptions.

Notable Quote:

Dave Ramsey [09:34]: "Make products in America, American made products. I'm all for that."

This segment serves as a valuable lesson for business owners, emphasizing the need for strategic planning and flexibility in operations to safeguard against unforeseen economic shifts.

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6. Concluding Takeaways: Financial Discipline and Preparedness

Timestamp: [09:59] – End**

As the episode draws to a close, Ramsey and Kamel reiterate the importance of maintaining financial discipline as outlined in Ramsey's Baby Steps while also preparing for economic uncertainties through prudent financial planning and diversification. The key takeaway is that by following established financial guidelines, individuals and businesses can navigate through economic storms with greater confidence and stability.

Notable Quote:

Dave Ramsey [09:59]: "There's your lesson from the headlines. Follow our guidelines, you'll be okay."

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Final Thoughts

This episode of The Ramsey Show Highlights offers a comprehensive exploration of how external economic factors like tariffs can affect both personal and business finances. Through real-world scenarios and expert advice, Ramsey and Kamel provide listeners with actionable strategies to maintain financial health amidst uncertainty. Whether you're grappling with debt, considering career moves, or managing a business, the episode underscores the value of financial resilience, strategic planning, and sticking to proven financial principles to achieve long-term stability and success.

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Notable Quotes Recap:

• Isaiah [05:43]: "For probably two, three years."
• Dave Ramsey [02:00]: "Tariffs become taxes. It’s just that simple."
• George Kamel [06:35]: "We're gonna push pause on life and just stack up cash."
• Dave Ramsey [07:39]: "We got to be focusing on the guidelines. The stuff that we teach makes you recession proof."
• Dave Ramsey [09:34]: "Make products in America, American made products. I'm all for that."
• Dave Ramsey [09:59]: "There's your lesson from the headlines. Follow our guidelines, you'll be okay."

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Resources Mentioned:

• EveryDollar App: Start budgeting for free today
• Knockbox: Organize your financial accounts

Note: Ads, introductions, and non-content segments have been excluded from this summary to focus on the episode's core discussions and insights.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Isaiah]

I just started a new job about nine months ago. I work for a medical supply company. And, you know, obviously everyone's paying attention to the news. These tariffs are kind of scaring us as a business and a company. And so my question to you guys today is, you know, we're on baby step two. We're taking the course right now. So we're like, on our seventh or eighth week in the course, and we've been paying off debts, and it's been feeling great. But with these tariffs, there's, you know, there's communications and stuff from our uppers or CEOs, and they've been very good with us. But at the same time, there's. There's no guarantee that our jobs are safe. So my question to you today is, do we continue to make these extra payments with a high concern in job security, or do we hold off on making those payments to kind of see how things go and just save that money? Or should we.

[Dave Ramsey]

Tell me what's going on. Where are you guys getting your parts from? These medical supply parts, I'm assuming, is what you're talking about.

[Isaiah]

Yeah, yeah. So we.

[Dave Ramsey]

A little.

[Isaiah]

A few years ago, they moved everything from China to Mexico. So obviously that has a big impact on our business to the, to the point of significant, significant losses.

[Dave Ramsey]

So. So hold on a second. Hold on, hold on. I just got to ask a few questions. So you got. Your company is importing medical supplies from Mexico, correct?

[Isaiah]

Exactly.

[Dave Ramsey]

Okay.

[Isaiah]

And.

[Dave Ramsey]

And all of them, or some of them of your inventory that you're offering. How much of the business is affected by imports from Mexico?

[Isaiah]

Yeah, it's. It's a complicated structure, but I would say probably, you know, we're set to lose, you know, 17, 18 of our business.

[Dave Ramsey]

Why are you losing it? You guys are just going to stop. Stop buying and selling those?

[Isaiah]

No. Yeah, exactly. We're just. We'll lose most of our profits. And that's. That's kind of my concern is. Okay, gotcha.

[Dave Ramsey]

That helps. That's why I'm digging in. So you're talking about your profit margin is definitely going to get hit, but you're not necessarily losing business.

[Isaiah]

No.

[Dave Ramsey]

Okay. And what is your leadership? Because here's the other part of this equation. It's how much of that cost are you guys going to pass along to your customers? You understand? That's why. That's why guys like me, free traders, I don't like tariffs. Never going to like tariffs. So don't don't at me or send me hate email. I'm not going to read it and I'm right, so we'll just leave it at that. Tariffs become taxes. It's, it's just that simple. So are your leadership, are they talking about, hey, we think we're going to actually lose accounts because we would have to offset our increased cost by importing these parts from Mexico. And now they're more expensive due to the tariffs and we can't offset that by passing along to our customers. So therefore we feel like we're going to get really hit hard. What are they communicating? Because that will help George and I in answering your question. What's been communicated to you? Or are you just looking at the headlines?

[George]

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[Dave Ramsey]

What's been communicated to you? Or are you just looking at the headlines?

[Isaiah]

No, they've been communicating and, you know, everything's on a table. We'll try to eat some of it, obviously, but we also, it's a medical field, so there's, there's set contracts and fees.

[Dave Ramsey]

Right.

[Isaiah]

That are already, okay, you know, locked in.

[Dave Ramsey]

So you can't raise the price.

[George]

So they locked in the price at, you know, a dollar a needle, and now you guys are getting charged A$10. And so you're losing money on the contracts, essentially.

[Isaiah]

Essentially.

[Dave Ramsey]

Okay. By the way, while I'm here, I'm just going to leave this here for all of you who want to be educated on things beyond just you, your personal money. This is why I don't like tariffs. You got fixed contracts and this creates a problem. So.

[George]

And there's the retaliation tariffs from Mexico that now affect U.S. businesses.

[Dave Ramsey]

I know trade wars are never fun. Okay, I'll leave it at that. There's your geopolitics lesson for today. Okay, so, George, does this con, does this constitute a storm where we would.

[George]

Say leadership is actually saying, here's what's going to happen. And hey, phase one, here's what happens. Phase two. Blocks layoffs here's who goes. And you know, even Ramsey did this. During COVID our team communicated leadership said, here's how. What's going to go down if things take a shift? And then you kind of know the game plan. And so I think there's not enough information right now to go. I'm going to pause because this could be a year long, this could be three years. We don't really know how short term this is. And if it was a short term storm, I'd say let's pause and save up. But if this is going to be four years of who will they or.

[Dave Ramsey]

Won'T they don't think it's going to be. I do think that. I do. I can't predict this, but I do think that the tariff situation is going to be settled at some point in the near future.

[George]

And can you guys, you guys, you know, change suppliers next month and then this will be solved in 90 days?

[Dave Ramsey]

Yeah, I would keep my ear to the ground. I'd keep my ear to the ground, Isaiah, on this, but how much debt.

[George]

Do you guys have?

[Isaiah]

Yeah, so we have about 15 to 16,000 in consumer debt and then another 36 in student loans. And over the past five years, we paid off probably 70, 80 with no real intensity. But now that we're taking the course, we're trying to stick to the course and do what we're told. Yeah.

[George]

What's the 15, 16K outside of the student loans?

[Isaiah]

One of them is a private student loan, one's medical, and then one is a refinance that my lovely self did a long time ago.

[George]

Okay, so how quickly would you get out of debt? If you just stayed on the Ramsey plan, how quickly would you get out of debt? At this point, you know, we're shooting.

[Isaiah]

For probably two, three years.

[George]

Three more years to pay the rest of this debt off.

[Isaiah]

Something like that. It's kind of where we're.

[George]

That feels like a long time based on, I mean, what's your household income right now?

[Isaiah]

I think it's like 120.

[George]

So 120 grand and you have another, what, 40, 50. You have 51 grand left in debt.

[Isaiah]

Yep.

[George]

So why can't out of that 120, you take 25 and be done in two years or less? I feel like that's, that's even two, three years.

[Isaiah]

Yeah.

[George]

So I'm thinking we get really intense about this and try to knock this out very quickly. And if you do get win that, hey, layoffs are imminent. They are happening. I would then pause and save up. But right now, I don't know that there's enough ammo to go. We're gonna push pause on life and just stack up cash. Yeah, I wait for a little more communication.

[Dave Ramsey]

I concur.

[George]

I just feel like everyone's on edge and so leadership is preemptively communicating. Now, his is legit, where their business is affected directly and instantly.

[Dave Ramsey]

You know what? I feel like we need to take a couple of minutes here and talk about guidelines versus headlines. Oh, can we do that?

[George]

I like where this is going.

[Dave Ramsey]

So here's what you're going to see in the headlines. You're going to see the stock market drops yesterday, almost 900 points. I haven't looked at it. Today you're seeing the tariff news, Right. Trump's not backing down. Canada's bowing up, Mexico's bowing up. Are they going to negotiate what's going on? China's getting involved. You know, you're going to watch all these headlines now. I'm seeing stuff. And I look at all the different news sites. By the way, I'm apolitical in my news gathering because I want to know what people are seeing. You're going to see headlines about is a recession going to happen? You got realities right now of stagflation is kind of hanging out for those of you who didn't pay attention in the sixth grade. Stagflation is where inflation goes up and the economy goes down into a recessionary state. That is real. So you got all these things. So what if we're not careful, George? We get so focused on the headlines and we feel like, oh, boy, I gotta be nimble. What am I gonna do? I gotta get in front of this storm when it's not actually a storm. And then I want to say we got to be focusing on the guidelines. The stuff that we teach makes you recession proof.

[George]

Yeah.

[Dave Ramsey]

You know, thoughts on that?

[George]

Not owing people money, having emergency fund. That's the goal, is getting to that financial piece, to where no matter what's going on in the headlines, your family's going to be okay.

[Dave Ramsey]

Yeah.

[George]

And so in this case, would you tell our friend Isaiah, hey, I might be looking for a different job.

[Dave Ramsey]

I would be doing that in a.

[George]

Similar field, maybe have something lined up in case you got to.

[Dave Ramsey]

That's what I was thinking. I wouldn't pause the baby steps, but I would say, all right, let me look at what if worst case scenario happens, which, by the way, based on what I could pull out of that situation, again, this is the negative side of tariffs that Nobody wants to talk about if you're in love with one side of the aisle, you just. Well, he said we're going to do it, let's all do it. Woohoo. It's like, whoa, hold on a second. This has real economic impact and this is an example. So in that situation, you cannot control what the White House does. So we say you control what you do in your house. And so don't stop knocking out debt, but start looking for a fallback plan if for some reason you got laid off.

[George]

And it's a good lesson in diversification for business owners out there.

[Dave Ramsey]

Yeah.

[George]

You can't just rely on one supplier because if something happens to that supplier, prices, they shut down. Whatever it is, Covid, now you're, you're stuck. Your whole business relies on.

[Dave Ramsey]

Exactly.

[George]

So it's important to have backup plans.

[Dave Ramsey]

And to tie a bow on all this because I trying to inform you folks, this is why if you're going to do tariffs, you've got to deregulate, you got to cut taxes for businesses. Because the whole goal of this is to not be reliant on foreign countries for imports. Let's make products in America, American made products. I'm all for that.

[George]

And you heard small businesses. That's the backbone of the economy right there. So good.

[Dave Ramsey]

There's your lesson from the headlines. Follow our guidelines, you'll be okay. Create your free every dollar budget today. The simplest way to budget for your life.