FOR GROWTH COMPANIES, A MESSY TRADE WAR THREATENS PROFITS

There’s a new normal in what it takes to lead and grow a business. And Inc. 5000 CEOs have been learning to adapt on the fly.

- BY JAMES SUROWIECKI

QUIET PORTS China's exports to the U.S. dropped 35 percent in May compared with the previous year, according to Customs data.

ON APRIL 23 OF THIS year, a full-page ad appeared in The Washington Post, featuring a letter signed by the CEOs of a host of baby-product companies, including UPPAbaby, Ergobaby, Lalo, and Mockingbird.

The ad was paid for by founder and CEO Natalie Gordon’s company, Babylist, an Emeryville, California-based online retailer and baby registry that is No. 3,370 on this year’s Inc. 5000 list. Though the ad came out a couple of weeks before Mother's Day, it wasn’t a tribute to new moms or part of a campaign selling strollers and car seats. Instead, it was something more unusual: a request to the U.S. government for a “reprieve” from the tariffs President Donald Trump had put in place, which the ad called a “baby tax.”

Almost all the car seats and strollers Americans buy are made in China. And at the time the ad came out, Trump had raised tariffs on Chinese imports to a staggering 145 percent, which effectively froze trade with the country. As a result, manufacturers were looking at the prospect of having to shut down production lines, while baby retailers were looking at potential product shortages. The ad, then, was a cry for help, and an expression of the dire straits into which Trump’s tariffs were putting many businesses.

“We had kind of decided we were not going to get political about tariffs,” says Gordon. “And it’s a very nonpolitical ad. It was drawing attention to the fact that this was actually a very specific tax for new parents. The thing we were asking for was a reprieve. We were saying, ‘Give us a beat.’”