For Eugene company Burley, U.S. trade war with China has devastating consequences

For Allison Straub, president and CEO of Burley in Eugene, every day begins with uncertainty. 

What will the Trump administration tariffs be on goods coming to the United States from China?  

During the last two weeks, Straub watched the tariffs climb:

• March 28: 20%
• April 2: 54%
• April 8: 104%
• April 10: 145%

This happened even as reciprocal tariffs for all other countries were put on a 90-day pause April 9.  

“You just can’t even keep up,” Straub said in an interview with Lookout Eugene-Springfield. “You can’t make decisions.” 

Burley, a Eugene-based company that sells popular bike trailers, manufactures its product line almost exclusively in Ningbo, China, a port city on the East China Sea. (Burley also has manufacturing operations in Portugal and Taiwan, but those locations account for less than 10% of its products.)

The escalating United States-China trade war is paralyzing for small businesses like Burley. Straub and her team hope for negotiations, or that the administration might announce a pause or reduction in rates. 

The current tariffs pose an existential threat to Burley and small businesses like it. 

“At 145%, the decision is, do we even bring in product?” Straub said. Using round numbers, she said that for every $1 million in products they order from their Chinese supplier, they need to have roughly $1.5 million available to pay tariffs to U.S. Customs and Border Protection.

“For a lot of small and medium businesses, it’s a total cash flow nightmare,” she said.  

Pricing requires precision

Burley’s bike seats and trailers —  for children, pets and cargo — are visible with bikes all over Eugene and Springfield. The single-seat Burley Bee, the company’s original kid trailer, sells for $349.95. The Cub X, which handles more rugged terrain, is $1,049.95. 

Raising retail prices is a difficult decision for Straub.  

“At a certain point, you need to be able to maintain profitability in order to stay afloat,” she said. “If the price gets too high, consumers will seek alternatives, or they won’t buy it at all. So we have to be really mindful about increasing our prices. And as we increase prices, we know that our unit demand is going to decline. It’s not something that we take lightly.” 

Burley, like many companies, sells through multiple channels: direct to consumer; to wholesalers, who sell to bike shops; to large retailers like REI and Dick’s Sporting Goods; and to international wholesalers who sell to international bike shops. 

Pricing is complicated, even before tariffs. Deciding to increase prices, she said, “is something that we still haven’t moved on even today, because it’s a moving target.” 

No good options

The choices are stark right now, for Burley and similar companies.

One possibility is to run out of product and have no sales. The second is to continue importing trailers and — depending on how much Burley executives increase retail prices — make little to no money or take a loss on the product. 

“There’s no winning solution for businesses, for our retail partners, for consumers at this point,” Straub said. 

Straub’s concerns stretch well beyond the business.

Tariffs are a morale killer for the staff of about 25 people in Eugene. She worries about her partners in China. She’s on the phone every evening with her contacts in Ningbo and the team Burley has worked with there for 18 years. They have families of their own to support. 

“They have invested so heavily in quality and technology for us,” Straub said of her Chinese counterparts.

Moving the company supply chain elsewhere isn’t something that can happen on a dime.

The Burley brand is built on child safety. As many as 300 different materials go into some of the company’s products so it’s not as if the company can easily replicate that manufacturing process. 

Burley’s leadership is projecting different scenarios and not giving up hope that the company, founded in 1978, can weather this storm. 

But Straub knows some small business owners are abandoning products in China.

“They’re just closing up shop,” she said. “It’s really sad.”