During Wednesday’s Senate Small Business & Entrepreneurship Committee hearing, Julie Robbins, CEO of EarthQuaker Devices, spoke about the impact of President Trump’s tariffs.
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00:00With that, I will recognize Senator Cantwell for questions.
00:04Thank you, Madam Chair.
00:05So good to see our witnesses.
00:06Ms. Robbins, thank you for being here.
00:09Specifically, we love music in the Pacific Northwest, and we like to get our grunge on
00:15and do many other things.
00:17But, you know, we had a music stand company in Yakima, Washington, that continued to be
00:23a big exporter, and I kept thinking, I'm so proud of you guys.
00:28How do you, they're big supporters of the Ex-Im Bank, you know?
00:31And I kept saying, how are you so successful?
00:33I would think somebody would knock this off.
00:35And they were like, no, no, you're a symphony.
00:38You need performance out of a music stand.
00:41You can't have a big concert with lots of people coming and have a bad music stand.
00:45So you're a similar company that makes electronic parts and turns those into something that musicians
00:55can create with.
00:56So how are you thinking about this tariff situation, and what do we need to do to help
01:02more businesses like you grow?
01:05Thank you so much for your question, Senator.
01:10I was really fortunate that a lot of the investing that I did in our business happened before the
01:14tariffs were increased.
01:16So in 2022, we invested in a state-of-the-art PCB assembly line, and under the current tariffs,
01:25that would be maybe triple in price.
01:28The tariffs have really made it more challenging for us to recoup our existing investment in our
01:35business, and are putting us at risk of bankruptcy if these conditions continue.
01:42We have perfect credit, and we've never missed a payment, but like I said, we're running out
01:47of liquidity.
01:48And our home is collateral on our loans.
01:50So if we miss payments, and we default, we will lose everything that we work for, including
01:56our home, just as our two daughters are in college.
02:00And I don't see taking on additional debt as the answer.
02:03I also don't know why somebody would invest in a company that is currently losing money
02:08without a clear path to success.
02:11I also find the suggestion that I borrow money and pay interest to finance taxes and fees abruptly
02:18imposed on me by the government with no notice and no consideration, I find that suggestion
02:26offensive.
02:27And I believe the tariffs need to be reversed immediately, or at the very least, small businesses
02:34need to be exempted.
02:39Businesses definitely have a lot less flexibility.
02:41Do you have a big export market for your devices?
02:46We do.
02:47We've worked very hard to increase our exports.
02:50They're approximately 30 to 40 percent of our sales.
02:54Although just in the last few months, we have seen that number drop drastically due to anti-American
03:00sentiment and the chaos that the global financial markets have experienced due to this chaotic
03:09trade policy.
03:10You know, I find it takes a lot to become an exporter.
03:15We have, in the Northwest, we had programs in the 80s where we just encouraged everybody
03:20to do it.
03:21I don't know if it was our geography or just an ethos, but we encouraged people to do it.
03:27And it's hard because you're taking a risk anyway as a business person, but you're taking
03:31more risk because now you have less control over it.
03:33That's why we support the Export-Import Bank so much because it lessens that risk.
03:38But we find that ends up being 25, 30, and you're saying in your case, 40 percent of sales
03:44opportunities.
03:45It makes sense.
03:46So what are some of your best markets for exports?
03:52Europe, Australia, Canada, Japan, anywhere that guitar music is popular, guitar-based music,
04:01and where incomes are high enough to afford some discretionary spending.
04:06Okay.
04:07So, friendly countries to us.
04:09Anyway, we should have good relationships with them, and this shouldn't really be the
04:14barrier that it is at this moment.
04:16That's right, but we've offended a lot of our allies.
04:20Thank you so much.
04:21Thank you, Madam Chair.