- Flexport's CEO warned that US tariffs on China could cause mass small business bankruptcies.
- A lot of what Americans buy from China is non-essential goods, Ryan Petersen said.
- Trump said he might not impose higher tariffs on China because it could deter US consumption.
The CEO of logistics company Flexport has a grim forecast for what could happen if the US sticks to its tariffs on China.
The US's 145% duty on Chinese products could lead to "mass bankruptcies," Flexport's CEO, Ryan Petersen, said on an episode of '"The Prof G Pod," which aired on Friday.
"You're talking like 80% of small business that buys from China will just die," he said. "And millions of employees will be unemployed."
The logistics CEO added that a lot of what Americans buy from China is "discretionary spend" — optional items that can be replaced if they become expensive.
"We have customers that buy pizza ovens in China, like for your backyard. They're really cool products," he said. "When the price goes up 50% or more, you might just go out and buy pizza from Domino's or something, right?"
He said this is why he thinks the US could "back down" in the trade war with China.
The White House did not respond to a request for comment.
Last month, Petersen said customers feel "paralyzed" around tariffs, especially because of the manner they are being carried out. He said no country feels like a safe bet for supply chains, especially after President Donald Trump placed duties on Canada and Mexico, two of the US's closest trading partners.
Petersen founded the logistics company in 2013 and raised $935 million in 2022 at an $8 billion valuation.
'People aren't going to buy'
Earlier this month, Trump said he might be nearing a point where he wouldn't want to impose higher tariffs on China because it could deter consumption in the US.
Speaking to reporters in the Oval Office on April 17, Trump said he may not raise tariffs even if China goes beyond its 125% duty on US goods.
"I may not want to go higher, or I may not want to even go up to that level — I may want to go to less, because you want people to buy, and at a certain point, people aren't going to buy," he added.
Earlier on the same day, China's Ministry of Foreign Affairs said it wouldn't pay attention to Trump's "tariff numbers game" after the White House said Chinese exports face a levy of up to 245%. Beijing previously called escalating US tariffs a "joke" and said they no longer hold "any economic significance."
The US imported $438.9 billion worth of goods from China in 2024, according to the Office of the US Trade Representative. China makes up over 13% of its total imports.
Earlier this month, five owner-operated businesses from different states and industries filed a lawsuit in the US Court of International Trade challenging Trump's authority to impose tariffs by invoking the International Emergency Economic Powers Act. They argue that the tariffs violate constitutional limits on executive power.
Large businesses are also warning of widespread economic disruption. Southwest Airlines' CEO said last week that the US airline industry is already in a recession.
