S.Hrg.119-97

1[Senate Hearing 119-97]2[From the U.S. Government Publishing Office]34                                                       S. Hrg. 119-9756               BEYOND THE TRAILHEAD: SUPPORTING OUTDOOR7                RECREATION IN AN UNCERTAIN ECONOMY8=======================================================================910                                HEARING1112                               BEFORE THE1314                      COMMITTEE ON SMALL BUSINESS15                          AND ENTREPRENEURSHIP1617                                 OF THE1819                          UNITED STATES SENATE2021                    ONE HUNDRED NINETEENTH CONGRESS2223                             FIRST SESSION2425                               __________2627                              MAY 30, 20252829                               __________3031      Printed for the use of the Committee on Small Business and32                            Entrepreneurship3334[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3536        Available via the World Wide Web: http://www.govinfo.gov3738                               __________3940                   U.S. GOVERNMENT PUBLISHING OFFICE4160-615                     WASHINGTON : 202642=======================================================================4344            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP45                    ONE HUNDRED NINETEENTH CONGRESS4647                              ----------4849                        JONI ERNST, Iowa, Chair50            EDWARD J. MARKEY, Massachusetts, Ranking Member51JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington52RAND PAUL, Kentucky                  JEANNE SHAHEEN, New Hampshire53TIM SCOTT, South Carolina            CORY A. BOOKER, New Jersey54TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware55JOSH HAWLEY, Missouri                MAZIE K. HIRONO, Hawaii56TED BUDD, North Carolina             JACKY ROSEN, Nevada57JOHN R. CURTIS, Utah                 JOHN W. HICKENLOOPER, Colorado58JAMES C. JUSTICE, West Virginia      ADAM B. SCHIFF, California59JON HUSTED, Ohio60                Meredith West, Republican Staff Director61                 Sean Moore, Democratic Staff Director6263                           C O N T E N T S6465                              ----------6667                              MAY 30, 202568                           Opening Statements6970                                                                   Page71John W. Hickenlooper, U.S. Senator from Colorado.................     17273                               Witnesses7475Mr. Travis Campbell, CEO, Eagle Creek, Steamboat Springs, CO.....     476    Prepared statement...........................................     777Mr. Mike Mojica, Founder, Outdoor Element, Englewood, CO.........     978    Prepared statement...........................................    1179Mr. Trent Bush, Founder and CEO, ARTILECT Studio, Boulder, CO....    1380    Prepared statement...........................................    158182                    BEYOND THE TRAILHEAD: SUPPORTING83                        OUTDOOR RECREATION IN AN84                           UNCERTAIN ECONOMY8586                              ----------8788                          FRIDAY, MAY 30, 20258990                      United States Senate,91                        Committee on Small Business92                                      and Entrepreneurship,93                                                    Washington, DC.94    The committee met, pursuant to notice, at 1:11 p.m., in95Lanny and Sharon Martin Family Foundation Room, History96Colorado Center, Hon. John Hickenlooper, presiding.97    Present: Senator Hickenlooper [presiding].9899           OPENING STATEMENT OF SENATOR HICKENLOOPER100101    Senator Hickenlooper. We've now officially gaveled in.102Welcome, all of you. I appreciate you to come and join us for103this field hearing for the Committee on Small Business and104Entrepreneurship, basically, about the challenges and105opportunities that are facing entrepreneurs and small106businesses in the outdoor recreation industry.107    Before we get started, I want to thank History Colorado for108this amazing space, this amazing building, and all that they do109to make sure we understand where we're coming from. And110actually, each of these entrepreneurs has origin stories, and111I'm sure we'll hear a lot of that today. Understanding how we112got to where we are, and how we should take facts and use113evidence to make sure our future is better, is a key part of114what these hearings are all about.115    I'd like to also give thanks to Chair Joni Ernst, Senator116Ernst from Iowa, and Ranking Member Markey. Neither of them117could be here, but they signed off on this, and are supportive118of making sure that we take the Small Business and119Entrepreneurship Committee out into the country, and get all120the information we can.121    Also want to talk to committee staff for the Small Business122Entrepreneurship Subcommittee, because they do the real work123and my own staff as well, who you guys have met, and spent124countless hours putting all this together. So, the committee125staff, our staff, it's a great partnership.126    I've always been proud to represent small businesses in127Colorado. Up and down Main Street, we've had a wonderful--this128process of creating ecosystem that welcomes and celebrates129entrepreneurship, is something that we were very intentional130about, starting 20 years ago. And there are literally thousands131of people that own that, that have put time and effort and132created businesses, that prove that this not just the backbone133of our country, but it is the heart, it is the lungs, it is the134digestive system--I'll cut it off. [Laughter.]135    Anyway, I came of age in small business. I started the136first brew pub in Colorado, my gosh, 1986. I don't even want to137say how old that is, that's almost 40 years ago. I guess it was13888 we finally got it open, it took me two years to open the139thing.140    I understand a lot of the challenges that these guys are141facing. We were just in there talking about some of the142challenges that we're going to go over today. I lived a lot of143that; the anxiety that envelops real challenges when you're in144small business. And you know that each decision is not the last145decision, it's a decision that's going to either make things a146little better or maybe a little worse, if you don't get the147right decision, and you don't have time to sit and think about148it. You've got to keep making the decision, keep moving your149business forward.150    Our small businesses are economic boosters to our rural151communities, to our urban communities, our suburban152communities. They improve healthcare, they drive innovation,153they create jobs, they improve our education system.154    Here in Colorado, if you just look at the outdoor155recreation industry, we're talking in excess of $17 billion of156the state's, GDP. And there are some people that think that's157conservative. We're in a time now with this notion of tariffs,158where I think those policies threaten many of our small159businesses, not all, but many, many of our small businesses.160    And I think the more we can hear those stories, and161recognize you know--I've talked to people in the trade office162and I've talked to other Republican Senators, I'm not sure I've163ever seen a place where the types of tariffs that have been164discussed, were effective. These large mass scale tariffs that165have been contemplated, not just for China, but even for NATO--166our allies. This is the kind of tariff environment that we saw167when I was a kid in the '60s and '70s. South American168countries, other developing countries, used similar tariffs to169try and protect--they wanted to limit their imports, and they170wanted to push forward and hope to stimulate their own171indigenous industry, and it never worked.172    They ended up with spiraling inflation and interest rates.173Basically, there was a freezing that took place in their entire174economy. So as their economy stagnated, the value of their175currency, whatever it was, would diminish. And I think we face176the same things here. We're going to look at weakening the177dollar. And at the same time, all the uncertainty is, this178making people hesitate and, in many cases, put off any179significant decision. They won't commit to a purchase or a new180project because of all the uncertainty.181    I think these guys, all small businesses, want to focus on182serving their customers. But having to navigate the chaos we183see right now is a real challenge. And I think the tariffs are184a blunt instrument. I understand where they're coming from, but185I think there are better ways we can deal with this. Certainly,186the people that are going to elegant dinners in Mar-a-Lago or187anywhere, this isn't as much an issue for them. But many small188businesses are really caught up in this storm and struggling to189survive.190    Along with my Senate colleagues, we introduced the Small191Business Liberation Act, which would exempt small businesses192like these from these reckless tariffs. Again, we've been193pushed back on that and on and so many things.194    Last week, we had Kelly Loeffler, who's the Administrator195for the Small Business Administration. She was talking about196how the tariffs really were good news for small businesses. But197I think I've been going around the state this whole week, and198I've talked to a dozen small businesses and haven't heard199anyone say that yet, that they look at this as any kind of a200benefit.201    The recent CNBC survey, only 30 percent of our small202business owners believe our economy's heading in the right203direction. 70 percent felt that our economy is heading towards204a recession. They think the country is going the wrong205direction. We haven't seen pessimism like this since COVID,206which was a global pandemic, obviously. But I think that we are207on the precipice of a recession, and it could be a serious208recession. And the losses we will all endure will be209structural, in other words, they will have a long tail.210    Obviously, tariffs aren't the only challenges these guys211face. Many of the components of this bill that was passed in212the house, the budget bill, are also going to be structurally213challenging. There's a plan in there, it was pulled out, but214once they put something in, they pulled it out of this budget215bill, but it'll probably find its way back into something else.216But they had a plan to sell hundreds of thousands of acres of217public land. And once you start that, it's hard to say where218it's going to go, but it's certainly not going to go in a good219direction.220    In that budget, it's hard not to see labor shortages.221They're reducing or eliminating a lot of the money used to222address climate change. It is a challenging time. Anyway, I'm223excited to be joined by these guys, if I'm any good, which is224debatable, but any good at this senate business, I'm going to225hopefully leave this today on an upbeat.226    Because it took me two years to raise the money when I227first started Wynkoop, I couldn't get my own mother to invest.228[Laughter.]229    But I always said, sometimes I'd have to get out of bed and230paint a smile on my face. I'd have to look in the mirror and231say, all right, let's go get them, because I've never succeeded232at anything that mattered, if it was really challenging, by233thinking I couldn't do it, or by thinking it would look like,234you know, it wasn't going to happen.235    I loved talking to these guys for 20 minutes before we236started this. This panel of witnesses embodies that237determination and commitment that it takes for small businesses238to succeed.239    Our first witness is Travis Campbell. He's the owner and240CEO of Eagle Creek, an adventure travel gear company that's241based in Steamboat Springs. It's a little unfair that he gets242to live in Steamboat Springs, and most of us don't. Prior to243his time at Eagle Creek, Mr. Campbell spent time at VF, working244at North Face and Smart Wall.245    He's got a Bachelor's of Science in Civil Engineering from246Duke University, MBA from Northwestern. Which is where my wife247also went, to Duke. She did not study engineering, but she also248got an MBA from Northwestern.249    Mr. Campbell. Fantastic.250    Senator Hickenlooper. What a scary world. [Laughter.]251    Next up, we have Mr. Mike Mojica, founder of Outdoor252Element, an adventure survival gear business based in253Englewood. Mr. Mojica spent the bulk of his career as a254mechanical engineer in aerospace, real engineer, I'm just255kidding, this is still real engineering. But he was a256mechanical engineer, before turning his small business dream257into a reality. And he had older degree, an engineering degree258from the University of Texas at Arlington.259    And then, rounding out the group is Trent Bush, founder and260co-CEO of ARTILECT Studios, based here in Boulder. Mr. Bush261comes from a family of outdoor recreation entrepreneurs, and262has served in previous roles at Mountain Hardware, Black263Diamond Equipment, and Burton Snowboards. He has a degree from264the University of Colorado Boulder and started his first265business while a student in Boulder High School. I mean, is it266possible that boulder's always been a hotbed of267entrepreneurship? I think it is.268    So, we'll start, with each one just about five minutes to269make your opening statement. We'll start with Mr. Campbell, and270I'll turn it over for five minutes for your opening remarks.271272 STATEMENT OF MR. TRAVIS CAMPBELL, CEO, EAGLE CREEK STEAMBOAT273                       SPRINGS, COLORADO.274275    Mr. Campbell. Thank you, Senator Hickenlooper. Appreciate276the opportunity to be here to testify today about the impacts277of the current trade and tariff policy on the outdoor278recreation economy.279    As you said, my name's Travis Campbell. I'm the owner and280CEO of Eagle Creek, a small business. I'm based in Steamboat281Springs. This is our 50th anniversary as a business. My wife282and I, and a few others have been the owner of this business283for about four years now. As mentioned, we design and sell284adventure travel gear. We make most of our product primarily in285Indonesia, and then we sell it all over the world.286    We're the kind of small business that America should be287proud of; we pay our taxes, we comply fully with our duties and288regulations, we strive to be a responsible employer, a289committed partner to our customers, and a steward of the290planet.291    Yet in the wake of the newly announced tariffs or recently292announced tariffs, it feels as though our country is293systematically working against businesses like ours, raising294our cost dramatically while fueling consumer anxiety that295suppresses demand. And I'll make note that that demand is296global demand, not just demand in the U.S.297    Eagle Creek in the vast majority of the $1.2 trillion298outdoor industry, which is responsible for 5 million American299jobs, depends on a complex global supply chain to manufacture300the highly technical products that we sell. These goods require301years of skill and specialization to produce and those302capabilities do not exist in the U.S., at any level of scale303required to make the goods that we produce. Building that304capacity would take domestically years, if it were even305possible to do.306    When the reciprocal tariffs were announced on April 2nd, we307had as a business, we had about $1.8 million of purchase orders308outstanding, due to ship into the U.S. in the next four months.309Under our normal processes, we would pay about $260,000 in310traditional duties and tariffs on that. And that cost is built311into our business model that's existed for a while.312    When we did the math on the incremental tariffs, the new313bill would be an additional $580,000. And so, if for a business314our size, we don't have $580,000 sitting in our bank account315just waiting to pay that extra. And so that's a kind of shock316that is simply unsustainable for a business like us. What we317say is, in our 50th year of operations, we could be possibly318put out of business through these kind of ill-conceived tariff319plans.320    Eagle Creek immediately took dramatic steps to stay afloat.321We froze salary increases that we had just implemented to our322teams. We halted the hiring of two really exceptional new323people that we planned to bring on board. We cut spending324across the board--so on vendors, on travel, on investments that325we were making in growing our business this year. We've revised326our sales forecast significantly lower for the year. So back to327that global consumer decline in demand that we see going on.328And so, when you add that all up; lower wages, fewer jobs, and329less spending in the economy, I don't think that's what we're330aiming for.331    So, the current pause in tariff implementation does give us332some breathing room. But I would say only barely. And I'll go a333little off script here and say, this week there was a court334injunction, I'll say around the tariffs that have changed the335scenario again since I submitted my testimony three days ago.336And so, I find it remarkable that today I actually have no idea337what the tariffs are on my goods. And so, as a small business,338to have no idea what primary input costs look like in your339business, is terrifying and chaotic.340    So, the uncertainty and instability continue to wreak havoc341on our business. I think it's important to note it's wreaking342havoc on our people. Like our teams are tired. You know, this343is a stressful environment. We're asking a lot out of people to344essentially plan and replan our business, what feels like345almost daily. And so, it's a constant struggle to not have a346view on what's going to happen and either tomorrow or let's347call it July 9th.348    So, it's important to understand that our outdoor products349are not interchangeable with general consumer goods. These are350technical complex items built to withstand extreme conditions.351There's very little of U.S. manufacturing to support that. Yet352technical goods are among the most heavily taxed imports we353bring into the U.S. So, the trade weighted duty average for354outdoor gear is over 14 percent, compared to just 2.7 percent355for other consumer goods. Products like waterproof backpacks356and footwear are especially hard hit.357    Historically, the outdoor industry has had bipartisan,358congressionally-approved tools like the Generalized System of359Preferences, GSP, and the Miscellaneous Tariff Bills, MTB, to360provide relief for products that aren't made in the U.S. But361both programs expired at the end of 2020.362    Since then, the outdoor industry has paid over $2 billion363in duties that were not accounted for when sourcing decisions364were made years ago. Eagle Creek alone has paid over $4 million365in additional tariffs since 2020. If we had that $4 million366back, we would be in a much better position to weather this367current trade storm.368    This is not just a matter of cost--it's about369predictability in our businesses. Our production cycles last370summer between 12 and 24 months, and so right now we're in the371process of planning our spring 27 season. So, if you think372about that, it takes a long time to change suppliers, to shift373operations. You need a lot of capital to make that happen, and374you need certainty to make that happen. We can't adapt375overnight to rapidly changing policy.376    So let me be clear, U.S. importers pay the taxes on377tariffs. Those taxes are not paid by foreign countries. They're378paid by small businesses like ours. And with many businesses379still recovering from COVID-era disruptions, we simply did not380have the financial cushion to absorb these shocks.381    So, what are our options? We can go to our supply chain382partners and ask for discounts, which we've done. Generally, if383you could get a 10 percent discount out of a factory, you'd be384feeling really great about that. At the end of the day, that385makes a very small dent in the incremental tariff bills that386we're dealing with.387    Our other option is to increase prices to our consumers,388which if anybody's studied economics, when you raise prices,389demand goes down traditionally. And so, it becomes this vicious390cycle and it's not ultimately a sustainable path forward for391anyone in this industry.392    So, I'm here today to ask for leadership. Small businesses393like mine cannot fix this alone. We need long-term stable trade394policies that recognize the realities of modern supply chains,395not punitive tariffs, and uncertainties. We need programs like396GSP and MTB restored, to give businesses like ours the tools to397survive and grow.398    The outdoor industry stands ready to work with the399committee, with the Senate, Congress. Our company is prepared400to be part of the solution. But let me be very clear, what's401happening right now is not working. And thank you for your402time. Appreciate the time and happy to answer any questions403when the time comes.404    [The prepared statement of Mr. Campbell follows.]405    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]406407    Senator Hickenlooper. Great. I appreciate that, and thank408you. You summed it up pretty nicely. Now we'll hear from Mike409Mojica. Your five minutes begins.410411    STATEMENT OF MR. MIKE MOJICA, FOUNDER, OUTDOOR ELEMENT,412                      ENGLEWOOD, COLORADO413414    Mr. Mojica. Senator Hickenlooper and distinguished guest415and friends and family, thank you for this opportunity to speak416with you today.417    Again, my name's Mike Mojica. I was born on an Army base in418Nurnberg, Germany where I saw my father salute, all shades of419skin and all shades of skin salute him back. And that imagery420has always stuck with me my entire life. It taught me what this421great country is all about unity, opportunity, and the422confidence to chase dreams with grit and courage. This country,423while not perfect, has long inspired dreamers and doers, and I424consider myself one of them.425    By education, I'm a mechanical engineer, as you mentioned.426For years, I had the honor of designing for the U.S. Army and427the Air Force. In 2012, I had the opportunity of moving to428Colorado, where I rediscovered the outdoors, and I started429something on the side; Outdoor Element. My native name is430Bodaway, which means fire maker. And that sparked turned into a431mission-creating rugged, innovative gear that helps people432explore with confidence themed around fire.433    About seven and a half years ago I left my stable job in434aerospace to go all in with Outdoor Element. I've gone through435accelerator programs with Moosejaw and REI. I've secured 10436patents, I have a few pending, and we just came off our best437year ever. And then a couple of months ago happened. Overnight438tariffs on our core products jumped to 145 percent. That's not439a misstatement. What felt like a mood swing for my commander-440in-chief now feels like a knife in the back.441    What I thought was an approachable path to the American442dream has suddenly turned into quicksand. We are now down to 30443percent additional tariffs, 10 for reciprocal and 20 for444fentanyl--fentanyl, I'm paying the price for a crime I did not445commit. I'm just here in my quicksand drowning a little slower.446    We had to pause production, tell our factories to simply447hold the goods and not ship them. And what I am shipping is to448fulfill wholesale pre-orders. I'm doing little or no profit.449I'm doing it to keep relationships alive. I've lost a wholesale450account, a key wholesale account right now, because we had451slightly increased our prices.452    I had to lay off some team members. I've asked others to453work less hours. My wife now works for free, indefinitely. My454kids who are here today, they help me pack out orders. And I455don't mean this to be a pity party or pity story. I'm here not456to scream or yell. In fact, my spiritual mentor said, ``Anger,457never persuades. Hostility builds no one and contention never458leads to inspired solutions.'' So, I'm here for a plea of459conversation of clarity. Let's come together. Let's be460inspired.461    I understand that we operate in a global economy. It's462complex, but small businesses like mine cannot plan for success463when the rules change overnight, again and again without464warning, without clear strategy or line of communication.465    This country's supposed to build and promote small466businesses and not crush them. I'm not asking for a handout;467I'm asking for a plan. I'm asking for transparency that468inspires confidence. Chairman Mike Crapo recently said, ``Trade469is supposed to provide businesses with the certainty we need to470make long-term investments to drive growth.'' And I couldn't471agree more. Today, that certainty it's missing. I'm no longer472thriving. I'm working on surviving.473    In the past, I've tried to reach out to leadership at USTR474doing the 301 punitive tariffs, and it just fell in deaf ears.475I'd welcome a conversation from Ambassador Jamieson Greer.476Let's forge a path that's smarter together. One that doesn't477treat small businesses as collateral damage, but rather invites478the small businesses as an important part of the economic479equation, part of the economic solution.480    Ambassador Greer also said recently that he wants what's481best for America. My question is, what part of America? Do I482need to be building microchips or being in the auto industry to483matter? The acts of my government indicate that I currently484don't matter.485    Right now, my food, my fuel, shelter, cost a little bit486more. Profit margin has gone down and that's just not487sustainable. Not for me, not for hundreds of other outdoor488small brands facing the same uncertainty.489    Now, I've begun to shift production outside of China, and490where we can we proudly build here in the U.S., like our newest491fire-starting product, Fiber Light. But that's a journey, not a492switch, that anyone can just flip on.493    And I also believe this, that international commerce494promotes peace. It's not a new idea. In the 18 hundreds French495economist Frederic Bastiat, he said this, ``If goods don't496cross borders, soldiers will.'' Phil Knight echoed this same497idea in his memoir saying that Nike would rather build boots in498Vietnam than see combat boots there. And I agree. So, for every499international purchase order that we place, that's my vote for500peace and partnership, not conflict. Collaboration over501conflict is where I stand. So, let's use our forum policy to502foster a bridge that we've spent decades building.503    Outdoor Element was born from a spark--literally. We504designed survival and adventure gear themed around fire that505helps people explore the great outdoors with confidence. But506behind every piece of gear are real people, families, teams,507communities, friends.508    If you are a believer in our gear, thank you. If you light509fires on cold nights with our firebiners or a scout feather510knife or simply believe in small business, you are part of my511equation, you are part of my story. So, thank you for that.512    To this committee, please don't forget or undermine small513scrappy companies who form the backbone of America. Let's build514our futures one spark at a time and keep the fire going. Thank515you.516    [The prepared statement of Mr. Mojica follows.]517    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]518519    Senator Hickenlooper. Well said, well said. Mr. Bush,520you're up.521522   STATEMENT OF MR. TRENT BUSH, FOUNDER AND CO-CEO, ARTILECT523                   STUDIO, BOULDER, COLORADO524525    Mr. Bush. Great. Thank you, Senator Hickenlooper. My name526is Trent Bush, and my life has revolved around Colorado outdoor527industry since my childhood. Growing up, my dad was one of the528first employees at Boulder-based Frostline Kids, which was an529innovative outdoor brand that started in the '60s and lasted530through the '70s and early '80s.531    Frostline enabled countless American families, from diverse532economic backgrounds, to enjoy the outdoors affordably, making533their jackets, sleeping bags, tents, and packs at home, since534back then most American households actually had sewing machines535and knew how to use them.536    Unfortunately, market conditions dramatically shifted in537the early '80s and Frostline, along with other Boulder-based538innovators like Holubar, Gerry, and Altra, became obsolete as539competitors leveraged overseas manufacturing to deliver540finished products, that significantly lower costs with no541sewing necessary.542    In the mid-80s, I started my own career at Wave Rave, which543was a really small snowboard shop in Boulder where I'm from.544Although we initially produced our own jackets and pants545locally, our limitations started to become apparent when546competing brands began to source their products overseas,547bringing a new level of quality and performance that we548couldn't achieve ourselves.549    At Boulder High in 1989, my brother, a friend, and I550decided to launch our own brand called Twist. We were551determined to produce domestically at that time because even552though it was harder, that's what we believed in, and that's553what we knew from my prior generation. We soon outgrew554Colorado's limited capabilities and moved to the Bay Area555aiming to utilize factories abandoned by large American outdoor556brands that were already offshoring at that time.557    At just a few million dollars in sales, Twist lacked the558scale to sustain these factories, and they quickly shuttered,559forcing us to try to move our goods to Los Angeles factories,560which were more accustomed to producing Halloween costumes and561denim jeans, rather than technical outerwear.562    Without the necessary specialized equipment or solar sewers563available, our products faced severe quality issues. The564waterproof coating failed on our U.S. sourced fabrics, snaps565fell off, the seams leaked, and even back then, the know-how566had already moved on. Ultimately, survival forced us to move567our manufacturing overseas, but it was too little, too late,568and we ended up pretty much losing everything at that point.569And that was way back in the nineties. US-Based performance570apparel manufacturing capabilities have only really decreased571since that time. Definitely not increased.572    I know this is true because after Twist, the past 30 years573of my career have evolved around senior roles and design and574development, for global performance brands, as mentioned, like575Burton Spyder, Oakley, Outdoor Research, Mountain Hardware,576Black Diamond Equipment, and my most recent startup, ARTILECT.577    At each of these brands, we actually did make sincere578efforts and attempts to reshore partial production, but most of579those have actually ended in costly failures with only basic580products like t-shirts, socks, those kinds of things being581successful.582    Today at ARTILECT, we create innovative high performance583merino wool apparel in Vietnam, because domestic production584remains impossible due to the lack of merino sheep, specialized585yarns equipment and infrastructure.586    And because of those reasons, and even with the interest of587U.S. military, we can't comply with the Berry Amendment because588the necessary domestic supply chain simply doesn't exist, and589it leaves our brand without a valuable business opportunity,590and it actually leaves our military with substandard equipment.591    While the post COVID outdoor market has already been harder592than any that I've ever faced in my entire career, our entire593industry faces new unprecedented crisis, amplified by recent594U.S. tariff policies. For a small wholesale-focused business595like ours, these tariffs dramatically inflate landed product596costs, forcing us to either to raise retail prices or accept597significantly diminished margins, or most likely both.598    Our retail partners can't absorb these price increases599without reducing their orders significantly, and their600customers are unable to pay more, endangering both their own601businesses and ours at the same time.602    Additionally, these tariffs severely undermine ongoing603industry efforts towards greater equity and inclusion, making604outdoor participation much more expensive and illusive.605    Even if Tuesday's ruling against the tariff stands, the606uncertainty of U.S. trade policies have also sparked anti-607American sentiment in our foreign markets, causing outright608rejection of American brands, and severely damaging our global609competitiveness.610    This is all super hard for me personally. I held onto611producing in the U.S. as long as I possibly could, and I feel612I've done everything I was asked to do since, including moving613production out of China six years ago. Now, even those614staggeringly high tariffs outside China may force my business615to close. This just isn't the American dream I believed in, and616I've tried so hard over all those years to achieve. The rules617keep changing and we just can't keep up.618    So, I respectfully urge Congress to reconsider these619policies that cripple small outdoor businesses like mine,620recognizing the unintended damage they're causing. Thank you621sincerely for your time, consideration, and thoughtful622understanding. Thank you.623    [The prepared statement of Mr. Bush follows.]624    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]625626    Senator Hickenlooper. Thank you, all three of you. I think627those are so distinct and yet compelling and some of the628calculus you have to use, and no matter how good you are at629your business, if you have to raise your prices three or 4630percent, that doesn't mean you're going to lose three or 4631percent of sales. You don't know what you're going to lose, at632what point that people feel they can't afford what you're633selling. And you can raise your prices 3 percent and lose 10634percent of your sales. And I think I heard variations of that635through each of you.636    I'm going to go back up and forth and ask a bunch of637questions. I'll start with you Trent, just because you spoke638last. You've obviously had quite a career across a number of639apparel brands. You've obviously been diligently working640towards American Made in every way you could. And I think as641you said, we share that desire to get all America, but there's642no switch that you can flip. It really is a journey, as one of643you said.644    You said there's a lack of merino wool supply, is one thing645in terms of necessary machinery available. Maybe go a little646further in detail, the infrastructure, labor, technology, if647you want to bring all of your manufacturing state side. I mean,648you can summarize it. You don't go through too much of the649details. If you ask a true entrepreneur a question like this,650you could be here for an hour. But what would that do? Just651kind of run through that. What would that do to the cost for652your consumer?653    Mr. Bush. Well, first of all, it wouldn't be possible even654if I wanted to. Okay. The Merino sheep in meaningful quantities655only grow in the Merino band, which is Australia, New Zealand,656South Africa, Argentina. There's a certain latitude where657Merino can be raised in meaningful numbers.658    Machinery wise, and we were actually joking, sort of in the659green room before, that there's only one in Denver as far as I660know. There's only one Ralph sewing machine. I don't know if661they're still even here, but there's one place you can actually662buy sewing machines, industrial sewing machines.663    Senator Hickenlooper. That's for the whole region?664    Mr. Bush. That's for the whole region, kind of for the665mountain west. And they're the only people that can actually666even service them. And it's not just about, you know, having667people who know what they're doing, people who know how to sew,668and people who know how to sew at a very high level. To be669efficient, it means having the machinery, it means having the670trajectory of innovation in the machinery side. That again, all671that left the U.S. decades ago.672    And so, you know, not to go into every little detail, it673actually isn't possible. And that's kind of what I mentioned674with the military thing. We were working with the U.S. 10675special forces and they really liked our product and that kind676of thing, but we can't be very compliant. And our technology,677especially with the yarns that we use, a process called New678Yarn, those machines do not exist in the U.S. to even make the679yarns. So even if we had the rest of them, the machines don't680exist here. So, it's a losing equation.681    I think the last thing I would say is, we can do a much682better job as a business, when you talk two or 3 percent raise,683we're talking 20 or 30 percent raise in most cases, from a cost684perspective. And that's all money that we'd literally pay to685nobody, right? Or to our government, right?686    I would rather spend every one of those dollars on a high687paying job here in the U.S., because all of those dollars will688go to marketing, they'll go to sales, they'll go to689distribution, all the things that we need to support, instead690of paying a low wage, so sewing job, I think that's a much691better way to spend those dollars, right?692    Senator Hickenlooper. And that 10 or 20 percent largely at693least in this situation, is going to go--some chunk of it will694go to tax breaks for very, very wealthy people, many of whom695don't want the tax breaks. That's the one thing that never696really comes out. I've talked to a dozen, or maybe not quite a697dozen, but very wealthy people in Colorado and asked them about698these budgets in the tax cut. Most of them go, you know, you're699really wealthy, a couple hundred thousand dollars, which sounds700enormous to the rest of us. They're like, no, not if that's701going to hurt people like yourselves.702    Mr. Mojica, I understand exactly what, as you were703describing that small business anxiety and challenge to juggle704all the problems. And one thing I remember vividly was when you705have something inserted into your world that demands a certain706amount of your attention, everything else gets diminished. In707other words, you're not doing everything else that you are708accustomed to doing in order to grow and thrive.709    So as is, tariffs have rendered your business uncertain in710the short term. How have you found, or have you been able to711find enough time, to do the growth and to thrive as you want?712How much of your time, I guess as a percentage is what I'm713asking, are you having put towards navigating this intrusion714that the tariffs are creating for your business?715    Mr. Mojica. Great question. I don't know if I can give you716exact percentage, but I know that there's been lots of717sleepless nights and just staying in the office wondering like,718how am I going to make the ends meet? Gratefully, I have an719awesome support family that comes in and starts packing720packages and learning different parts of the business. I didn't721know I needed to be a tariff expert when I started this722business. [Laughter.]723    But it's definitely something we learned to navigate. I'll724say that all of us here, I think we, the beauty of America is725we get to choose our own hard, right? And it's like working an726eight to five is hard. But I chose this hard, and I'm willing727to accept the obstacles that comes with it. Now, I feel like728this is kind of a curve ball that I didn't expect to see, and729so I'm trying to learn how to navigate.730    I'm a part of a couple of entrepreneurial support731networking groups, and I found that it's like reaching out and732sometimes we share each other's pity party just to get it off733our chest. Like, okay, it's time to move on. But it's been a734struggle, the struggles are real. If I had to guess, probably73530 percent of my time is just trying to understand, reading736articles about like, what could happen next, what's the737ramification?738    I was reaching out to a broker yesterday, trying to figure739out what the taxes or the tariffs are. I have something coming740in right now and I'm like, hey, what am I paying? I don't know.741You know, like, what does this mean? And so, it's the742uncertainty. It's hard to create a business plan around when743you have a big ball of uncertainty. And that's what's driving744me crazy. That's why I want a plan that, just inspires like, we745have something stable, let's move forward. And what I don't see746is anything stable. It's a disaster.747    Senator Hickenlooper. Yes. Well, and that's, so much of748small business is based on assumptions. And you've got to have749a fairly good set of assumptions to make sure that the things750you don't know, like, what are my sales going to be, is there751going to be some weather event or something that's going to752come out of the blue? But when almost everything is up in the753air, that I think you all three of you talked to that that754point.755    Mr. Campbell, I want to switch gears for just a minute.756Obviously, there's so many threats that are facing the outdoor757recreation industry right now. We're seeing drastic cuts to758pretty much every federal enterprise that manages our public759lands. And these are large unsustainable cuts. I don't think760you can argue that.761    And whether you're talking about national parks or national762forests and all those recreational opportunities, this763transition away from responsibility that the federal government764has historically always exhibited around our public lands, I765see as a genuine threat.766    They're even talking about taking some of our smaller767national parks and turning them over to states, without a plan,768without any guidelines or accountability. Obviously, they've769fired or forced out thousands of employees from, not just the770National Park Service in our parks, and they're all going to be771down 10, 20 percent. Who knows what the bathroom conditions772will be. Although I think everyone should still go to our773National Parks. You need that time and a beautiful place to get774restored these days.775    But U.S. Forest Service, the campgrounds, the fish, and776wildlife, I mean, how we take care of our habitats in the777original budget bill that was taken out, but there was a part778of that bill that was going to sell off over 500,000 acres of779public lands mostly in Nevada but also in Utah.780    And that should be sobering, because once you begin that781process, you've taken an absolutely in violent line that we've782never crossed, of selling off, letting the executive branch783sell off public lands. And suddenly that line no longer exists784and is blurred.785    So, I want to--because your business really does directly786bear on this, but also your business and the industry as a787whole. How dependent are you on safe, accessible, protected788public lands?789    Mr. Campbell. Yeah, I mean, I would say wholly dependent.790You know, as the outdoor industry, I can't speak for everyone,791but we think of public lands as the core infrastructure of our792business, in the same way that like, machines might be the793infrastructure of a steel manufacturer, public lands are the794infrastructure of the outdoor industry.795    And so, you know, from my lens, outdoor industry has been796growing, thriving for years. The demands on our public lands797have been increasing. We actually have way more demand than we798have supply today of public lands. So, to me, it's actually799sort of antithetical, right? We should be buying more public800lands because there's the demand to justify that as a country.801And frankly, more public lands or better maintained public802lands, either of those would be an investment in the health of803this industry.804    And I already said in my testimony, $1.2 trillion of805economic activity for the country, 500 million U.S. jobs, like806you know, I'm a business person. If I see that kind of growth807and opportunity in energy, I want to invest behind that, not808tear it down and sell it off.809    And so, there's no question that even the conversation810about diminished staffing in the parks or BLM campgrounds being811closed, are going to decrease demand. You know, a big part of812our international tourism, bringing it back to my business813which is dependent on travel, and global travel, like lots of814people come from outside the U.S. specifically to visit our815national parks and our public spaces.816    And the quality of the experience they have in doing that817directly relates to whether people are going to come the next818time and how much money they're going to spend while they're819here. And so, from my lens again, very much shooting ourselves820in the foot in terms of economic activity.821    Senator Hickenlooper. Yeah, I'm sure each would've a822version of that same response. Mr. Bush, I'll come back to you,823Trent. I call him Mr. Bush or Trent. I go back and forth, Trent824Mike, you go whatever. Trent, everyone in this room knows that825the benefits in outdoor recreation go far beyond just the826immediate activity that you're engaged in and beyond just the827economic measure--of economic impact.828    You know, when I first did my first summer field work, when829I was getting my master's in geology, studied volcanic rocks830north of Yellowstone Park. So, I went out for a whole summer,831two years in a row. And that first summer I would go out for 10832days at a time and then come back in and go to a place called833Chico Hot Springs and have a great meal. And then I would go834and take a shower, meal first.835    When I came back to where I was in school in Connecticut, a836little small school there and my father had died when I had837just turned eight. And it was my mother's second husband who838passed away, so no one really talked about my dad. But the one839thing that was good about all that, it was a dark period, but840we didn't have to go to Sunday school. We didn't have to go to841church.842    And it's funny, I came back from that first summer in the843high of--in the Beartooth wilderness. And without even844thinking, I started going to church. And I think that's845something that we don't often, or don't always consider, is846that the other benefits of being outside and into wilderness847are profound.848    And it improves public health, obviously hiking, the849exercise, climbing, but also combats loneliness. It diminishes850anxiety, reduces stress. Many parts of Europe now, doctors851prescribe an hour, you know, three times a week, taking a walk852in the woods. In many cases though, the cost of the gear even853for basic access is a barrier.854    And so, you brought up Travis, Trent, sorry, the TRs, those855who were dyslexic did not set up this line. [Laughter.]856    Trent, you brought this, the tariffs are causing economic857uncertainty, but it's also rising costs, I think undermine our858efforts to create more access. And again, there's a price point859for everything. And if we really believe this is a public860health situation, that becomes a valuable equation.861    So, Trent, can you speak a little bit about the benefits of862getting more folks outside from the industry perspective, and863how these costs could affect more people getting access to the864outdoors?865    Mr. Bush. Yeah, I mean, there's a lot there. You know, I866think just to pull it all the way back to the most important867benefits of being outside, there's probably no real--it's hard868to look at a graph maybe of the rise of our mental health869crisis in the U.S. and things like phones, right? The more870people have been on social media doing whatever, the less that871they're out in the outdoors. And I think that that is872something--I think those are totally hand in hand.873    Being in the outdoors resets you, it resets everybody I've874ever met. We have in my family alone, we have struggles with875anxiety and depression and things like that. And the times that876those are not as apparent as maybe they would be otherwise, are877when we're outside. I mean, anybody that tries to go skiing or878snowboarding, something like that in Colorado, it's already879prohibitively expensive for a huge part of the population.880    These policies have not made that less expensive or made881access easier. You talked about selling off public lands,882that's less of a place for us to be, to reset our clocks and883reset ourselves and, you know, maybe not go to church, but that884could be a church for a lot of us. So, you know, you can't even885put a measure on how important that access is to the health and886welfare of people and all of these, everything that we're doing887right now is totally antithesis of that happening.888    Senator Hickenlooper. Right. I agree.889    Mr. Mojica. May I add to that?890    Senator Hickenlooper. Sure.891    Mr. Mojica. This is part of my origin story here.892[Laughter.]893    Me discovering the outdoors again. So, I'm a Texas defect,894you know, hopefully you're okay with that, guys. God bless895Texas. But I discovered Colorado and just amazing things896happened. So, the year I started Outdoor Element, I had moved897up to Aurora area and my neighbor's like, hey, Mike, you want898to go hike a fourteener? And I was like, yes, let's do it. And899then I said, what's a fourteener? Right? I had no idea what900that meant. And he explained the altitude thing. And we did901Mount Yale.902    And we did hike mount Yale and two things happened to me on903that hike. One, I met a young lady, she was hiking down. She904went up for a Sunrise summit and she was coming down, I was905coming up, we just passed tree line, and she was like, all906hobbling. And I was the weird guy that got right in front of907her room, like, hey, what's wrong with you? What's wrong with908you? And she's like, I rolled my ankle, obviously, you know,909get out of my way. And I know. So, I sat her down and I had910first aid kit and took off her boot, and I wrapped her up and911sent her on her way.912    And then when I got to the top, I was with like three other913guys. And I'm small, but I feel like I'm a strong dude. I'm a914man, right? I got to the top and I'm like, why do I want to cry915right now? And like, I had my little Moses moment, if you will.916And I'm just like, I'm going to look over here guys because I917can't hold my emotions together. And it was just like, it was918this beautiful, peaceful, revelatory moment in my life.919    And I came down with two lessons. It was like, hey, let's920be prepared. I feel like fire is a lifesaver, so I built it921around my native name Bodaway. And then let's get outdoors922more. Let's get in touch with these beautiful moments in life923that we just have the landscape for here in Colorado, but this924can happen anywhere.925    In addition, one of my kids suffered from anxiety as well,926and we went through therapy, and then we discovered the Tetons.927We went camping for nine days and just throwing rocks in a lake928like cured my daughter. It was just like this beautiful thing.929So, you're right, it's unmeasurable. Like we need the outdoors.930Like, don't take this away from us.931    Senator Hickenlooper. Right? Well put, well put. Mr.932Campbell, you, or Travis. You mentioned having to freeze salary933increases and pull them back. You were going to hire two934people, cut spending every way you could to try and make up for935the tariff expenditures. I thought the part also, when you're936doing that, at the same time, you're revising your forecast937down. You know, when your numbers are down across the board,938that's the hardest, I think.939    Are there other long-term implications, let's just940specifically talk about staffing. Are you losing or potentially941going to lose long-term employees that in many ways become942irreplaceable?943    Mr. Campbell. Yes. My hope is that we don't lose any more944employees fundamentally, that we find a way to navigate our way945through this in a way that doesn't cost more roles for us.946    You know, you had mentioned long tail consequences from947this disruption, somewhere along the way. And I think there's948lots of long tail consequences to this, like lots of the949damage, even if we like, snap our fingers and tariffs go back950to their normal levels you know, at some level we've scared the951global consumer. We've already at some level damaged our952businesses through just like this level of disruption.953    Like a good example is we've paused some of the product954introductions that we were planning to do over the next six to95512 months, because just for a variety of reasons that didn't956make sense to bring in the inventory and have the risk. And so,957you know, again, if we snapped our fingers in this resolve958today, our business will actually deal with the implications of959this for probably 18 more months at a minimum.960    And our industry is built on innovation. People like Mike961who have these amazing ideas for the next great product. And962same with Trent, right? Like, building this incredible product963that we want to be bringing to market. And these are complex,964long timeline things, like I said earlier. And so, there's965going to be an implication to that innovation pipeline because966people have frozen those investment choices.967    And so, whether it ends up costing our businesses more968people, it probably will. We're sort of, I think in our969business, destined to have a bad sales year, there's not much970that we can do to change that at this point. It's really about971how do we plan for the next year and the next year and try and972make sure that we get out of this cycle as quickly as we can.973    But I think it gets lost in a lot of this, right? Because974we're so focused on right in front of our faces right now975because the tariffs are so immediate. I think that long tail976impact for it's going to ripple out for a long period of time.977So, the faster that we can resolve this, the better we can move978through.979    Senator Hickenlooper. Yes. Mike, let me come back to you980and then I'll have a question for all of you. We'll work981towards this. Mike, you've talked a lot about, you've been part982of trying to be the solution. You reached out to officials;983you're trying to collaborate, which will get you into trouble,984that's how I first got into the government. [Laughter.]985    And I think your willingness to share your experiences and986to collaborate is really important. Phasing out manufacturing987in China, manufacturing domestically wherever as much as988possible. But again, you've had to shift from thriving to989surviving.990    What would you suggest to Congress? And you actually all991can chime in on this. What would you suggest that Congress and992the Administration could do to ensure the small businesses993aren't left behind in these discussions? Small businesses of994all stripes? Right now, we're just talking about outdoor995recreation, but I think we're probably at that point where we996need to start thinking about a structural process or solution997that we can say, all right, this isn't going to solve it998tomorrow, but this is something down the road. What's your999response to that?1000    Mr. Mojica. I think we're doing it right now, by you1001inviting us to the table and having an open conversation is, I1002think, critical to find a good solution. To feel like I have a1003voice, to feel like I'm heard, is for me it's volumes.1004    Now love for--see some policy change. And I know it's a1005complex system, you know, I'm hoping, why couldn't there be a1006threshold for exclusions for either top line or number of1007employees, or if you're doing something for the environment.1008Like we work with a lot of recycled materials and we're trying1009to single use plastics from our packaging. There's like all1010these little things that are like, hey, this could be a viable1011solution. I have these ideas; I want to share them with1012someone. And just, you know, Katherine Tai never answered her1013messages and, you know, and so I'm just like, who can I speak1014to?1015    So, I was more than excited to get a phone call. I think1016Connor Hall's the one who texted me and said, hey, let's have a1017conversation and then got me on this panel. So, thank you, sir.1018But I think the biggest thing is like, let's, make it real,1019let's turn this, not companies, as like a dollar sign, but as1020people, like who hire employees who often use family as1021employees. And if we're going to be the collateral damage1022because of that, I think it changes the equation when you see1023us as people and not just as a transaction, right? Well, this1024needs to be a relationship.1025    I feel like Stephen, I think is--``It's like everything1026happens at the speed of relationships.'' Like have a1027relationship with small business, call us up. Like we want to1028be heard. I don't know who to call. I'll email, text, and tweet1029or whatever. And it's like, it just falls on deaf ears. But1030having this moment, I feel like is a sign of progress, in my1031opinion.1032    Senator Hickenlooper. Right?1033    Mr. Bush. Yes. I mean, I would just say maybe this is a--do1034your research before you act. Because if the goal, or one of1035the goals that I've heard of sort of all this tariff thing was1036to bring manufacturing back to the U.S. Make sure that it can1037happen before you make it impossible for anything to happen for1038us.1039    I could have told you, obviously if somebody would've1040called, told them that there is nowhere to make those products.1041You were talking about, trying to make a dog leash, your1042daughter. Locally, you can't even make something that simple1043here right now. So do the research before you kind of turn off1044our lifelines, I would say.1045    Senator Hickenlooper. Yes.1046    Mr. Campbell. Those are great answers. I mean, I think I1047would say something similar to what Mike said. Small businesses1048are by their nature small and fragmented. And so, it's hard for1049us to speak as a collective voice. So, scenarios like this are1050what allow us to somewhat speak with a collective voice. And1051your committee allows that at some level. And so, you know,1052we'll never be able to hire lobbyists to be able to get access1053that the larger companies can pay for. And so, any1054opportunities like this where we can come together and use our1055voices and humanize our businesses is just super valuable.1056    Senator Hickenlooper. I'll never take any campaign1057donations from those large corporations either. Last question.1058We were in the green room, a couple of you touched on this, but1059I do think it's interesting that within the tariff conversation1060there is other international negotiation and drama. And I1061wanted to ask each of you, because you all have international1062customers as we talked about.1063    Have you seen people, and you can say both retail and1064wholesale customers who are saying, we can't do business with1065the United States anymore because of whatever. There's I'm sure1066multiple, you don't have to go into details, but is that1067something that's also part of the challenge and is it one or 21068percent or is it for your business, you know, five to 101069percent or just kind of again, run down on that?1070    Mr. Campbell. I mean, I can give a quick answer. I couldn't1071put a percentage on it. We always think from a customer service1072standpoint, when we hear from one person, there's at least 101073others, right? Like there's a heuristic idea of if somebody1074takes the time to call or send an email, then there's probably1075at least 10 more people who feel the same way.1076    And so, I've gotten a number of emails from our friends up1077in Canada, who've sent through and basically a note saying, I1078love your product, I've used it for years and years and years,1079I'm never buying another one. Sorry. And those are not the1080emails you like to get. Right.1081    And so, I don't know how large of a scale that is. I know1082Canadians in particular have been speaking with their wallet1083and not traveling to the U.S. and so you know, that in a very1084small way has a significant impact on our business.1085    Mr. Mojica. In my case, I feel like what's happened is I am1086no longer fostering my international accounts where I should1087be, because I'm trying to juggle, trying to learn how to deal1088with the tariffs here. I got an email last week from our1089Japanese distributor that says, hey, we never got this, your1090new pricing structure. How does it look for international? I'm1091like, whoa, that's a great question. So, I admittedly have not1092done the analysis to update pricing for my international1093accounts.1094    Some things will slip through the cracks when you're in1095survival mode. And I feel like that's where I am, where I need1096to take a step back and reanalyze and possibly like, get some1097hired help, some part-time help. Like, hey, let's look at this.1098I need someone smarter than me to come to the table and be1099like, how do we orchestrate this, what's the step forward?1100    So yes, I feel like international accounts right now,--they1101weren't the bulk of my business. We're talking like 5-81102percent. And because of that, where I wanted the plan was to1103foster them this year, next year, it's on hold. And so, my1104growths on hold and so is my R&D deck. Like I've been waiting1105to like bring more things to the market and I had a few1106customers say, hey, you showed me this R&D deck, like, when's1107that coming out? I'm like, well, I put that on pause for a1108while. So, I don't know yet. So, it's a lot of things are on1109hold right now.1110    Mr. Bush. And we are different than a lot of brands,1111especially kind of startup and small brands where we take a1112little bit more of a wholesale approach. I've always really1113believed retailers have done a great job building their1114communities, and our job is to support their work with the end1115consumer. That now has sort of ended up in a situation where1116we're actually bigger in Europe, in Scandinavia than we are in1117the U.S.1118    Mainly European marketplace typically is a little more1119forward on buying on performance, sustainability, quality,1120longevity, things like that. U.S. consumers or retailers, hype1121and price are usually a big driver of a lot of things. because1122it makes their job much easier to sell the product.1123    So, we're in a position right now where there's major anti-1124American sentiment across the European Union, of course. And1125there are Reddit pages. You can Google all this stuff and1126really the boycotts on American outdoor brands in particular1127from a consumer perspective. So, if those really take hold with1128those bigger retailers we work with because we are focused on1129retail relationships, then that'll be the end for us because we1130are so heavily weighted in Europe right now.1131    Senator Hickenlooper. That sucks. Yes, it does. And I'll1132finish. Just to the quick question. Because as a small business1133person, we were always looking over our shoulder at the really1134big companies and whether they were going to come into our1135market and whether that direct competition--how we would1136respond, were we ready? And obviously the restaurant business,1137you always had some big box competition. But you guys all have1138big competition as well, large companies.1139    And you know, it's similar, when Congress tried to regulate1140the large banks after the fiasco, the financial crisis of 2009,11412010, who really got hurt were small banks. Because the really1142large companies can tolerate these ups and downs and swings of1143more regulation, they're large enough so they can more easily1144spend or can accommodate the cost of five or 10 staff members1145to deal with all this red tape.1146    I think in the same way, I haven't seen this written1147around, thought about, but I think it is giving an undue1148advantage to your large competitors because they've got more1149space in their budget to deal with a tariff for six months or a1150year and try and get through this while the process gets sorted1151out. Am I thinking about that right? Why don't we go down the1152line?1153    Mr. Campbell. Yes, you are. And sorry, I was getting ready1154to--I was so excited to answer. [Laughter.]1155    I was in DC a couple weeks ago lobbying and speaking with1156members of Congress. And one of the things that I heard from a1157few offices was, just wait. This needs a few more months to1158resolve.1159    And to get to your point, like most small businesses1160actually don't have a few months to wait. Because again, we1161don't have the balance sheet to absorb the losses over that1162span of time. Whereas the big companies do, to your point.1163    If I'm a large company and it takes six months for this to1164resolve, that's fine. You know, the bank will float them1165through that window or they already have the assets on their1166balance sheet to get through that window. But most small1167businesses aren't structured with that level of reserves to1168hang on, and so it does.1169    I talk a lot about the second order and third order effects1170of these choices that we're dealing with, right? The first1171order effects are pretty obvious, costs go up. But the second1172and third order effects are exactly what you say, which is like1173the competitive landscape changes based on capital structure1174that you may have had or the scale of your business. And so,1175this does in a strange way, put an advantage on the bigger1176companies and the smaller companies are disadvantaged.1177    Mr. Mojica. I was slightly jealous when I read that, I1178think it was Apple, shipped six tons of iPhones over, you know?1179because I was like, wow, what kind of bank account do they1180have? And it doesn't look like mine. [Laughter.]1181    And I think the irony too, is like having a conversation1182about tariffs and international commerce is a good thing. And I1183think in the end we may end up in a better spot, but how we're1184getting there is crippling to small business. It is treating us1185like collateral damage and I feel like a pawn in this game.1186    And for me I feel like we weren't considered in the1187conference, like you're saying, like the research isn't there.1188Like you were mentioning like my kids own a dog business,1189selling leashes and we were trying to make it stateside and1190essentially get ghosted by three companies. And so, we were1191forced to go overseas, and then now I feel like we're penalized1192for being overseas. And it's just like the game doesn't make1193sense to me right now. And again, just to your point, I do feel1194like there's an unfair advantage to the larger companies,1195right?1196    Mr. Bush. Yes. We actually have a joke inside, that the big1197brands have more daytime janitors than we have employees.1198[Laughter.]1199    And it's because it's true. You know? And you see it in the1200marketplace right now, if you look at some of the big brand1201moves that have to happen because of these, whether they're1202using an excuse or whether it's actually true, it's easy to1203pull levers at scale. You can fire 400 people or lay off 4001204people to make up for some of these issues. I can't do that.1205We're bare bones as it is. So, we just can't do that. You know?1206    The other thing that from a brand perspective, competing1207against much bigger brands, we can't just, especially with our1208sort of wholesale strategy, we can't just shift more resources1209to sort of the direct to consumer side, where there's a much1210bigger margin, where much bigger brands could actually use this1211as a pivot point to even sort of abandon those retailers1212further and really take that attention towards building their1213own consumer base and competing directly against the brands1214that they sell to them right now.1215    So, there's a lot of things that are going to happen and1216I'm interested actually to see where it ends up.1217    Senator Hickenlooper. Well, I think in a funny way, and I1218know a number, I have a good relationship with a number of1219Republican senators. This is not their intention. They do not1220intend, to not only put pressure and in many cases, going to1221drive out of business, small enterprises. And if that business1222will get swooped up by the big companies, they won't have to1223spend any money. It'll be, low hanging fruit.1224    And the injustice of that, I don't think was intended by1225any Republican senator that I know. And hopefully we can begin1226moving now that the tariffs have been put on hold and kind of1227pushed aside. Maybe that becomes the default, that's what's1228going to be, that 10 percent, no fun. But at least if you knew1229it was going to be 10 percent going forward, it would be a1230better world, right? And I think that would give every small1231business person at least a fighting chance of holding their own1232against the larger competition and against the international1233markets as well, which you guys are all competing on.1234    So, anyway, I'll give to you a last comment if you want.1235You don't have to just----1236    Mr. Bush. I just really appreciate this, thank you very1237much. These are the types of things that we don't have access1238to, typically, as just little business owners with a dream. And1239it's really refreshing to have somebody actually sit across1240from me and listen and absorb and ask great questions. And I1241really appreciate it. So, thank you and thank you to the staff1242for having me and us.1243    Senator Hickenlooper. You bet.1244    Mr. Mojica. I echo what Trent said. Thank you so much for1245this opportunity to hear our voice. For a small business, I1246never thought I'd be in a Senate hearing. [Laughter.]1247    So, for me, it's incredible to be heard.1248    Mr. Campbell. Yes. Just to thank you, also appreciate1249putting a light on this.1250    Senator Hickenlooper. I appreciate all of your efforts. I,1251again, there's parts of me that listen to this and make me want1252to leap into it, back into it. Parts of it are, you know, in1253the back of my head saying, we got to do something. And thank1254God I don't have to deal with the challenges that you guys are1255all facing, just because I've been there and I know what it's1256like.1257    And you know, sometimes you realize all the different1258attributes that you as individuals have to have. You know, how1259did you know when you first started your business, that good1260parenting was going to help allow your business to get through1261the tough times? Having kids, being able to step up you know,1262all of those things, and they always are, but these are1263unpredictable, I mean, completely unpredictable times and do1264force us into situations that are oftentimes impossible. And1265yet we deal with it as small business people.1266    But let me make the commitment to you that I will go back,1267this is all the congressional record. I'm not sure how much1268good that does, but it does lay it down and the public can get1269access to it and hear the stories, because I think only through1270those stories can we convince Congress and the administration1271to wake up and recognize that we're sustaining losses here.1272They're needless and they're going to be long lasting, and they1273affect every aspect of our country.1274    So, thank you all. I have to do my closing or who knows1275what legal problems I'll be in. [Laughter.]1276    Thank you to our panel of witnesses for your experience,1277your suggestions and certainly the most precious thing for any1278small business person, your time, to come here. Again, I want1279to thank chair Ernst, Ranking Member Markey, the truly1280dedicated committee staff for making this hearing possible.1281It's obviously they have to schlep out and put all this1282together on a one-off basis.1283    I'll reemphasize that this is not the end of the1284discussion. This is a beginning to our effort to raise the1285alarm about how these tariffs are hurting our country. I think1286our sleeves are rolled up; your sleeves are all rolled up. We1287will dedicate ourselves to creating real practical solutions to1288some of these issues you're facing, and do a better job of1289working with the Administration if they'll let us, to create a1290tariff system that's maybe a little more nuanced, but actually1291protects one of our most valuable assets, our small businesses.1292    If other people have questions or if you guys have other1293things you want to put in the record, we'll keep the record1294open for a couple weeks. I don't know what that exact date is1295but it's in there. I should know it off the top of my head. You1296go over the end of the month or always mix the math hard. Thank1297you all, really appreciate.1298    We'll gavel off.1299    [Whereupon, at 2:22 p.m., the hearing was adjourned.]13001301                           [all]