Trump's policy halts technological advancement of companies

NEW YORK —Educational robots, athletic shoes, and eco-friendly utensils are among a growing list of products that have been blocked from reaching market by President Donald Trump's trade policies . Small business owners say the tariffs have hindered their ability to innovate and compete.

Founders of companies such as Learning Resources, Made Plus, and Dorai Home said that import taxes, coupled with their changing nature, have shifted the focus of development toward administrative procedures and budget adjustments. Uncertainty limits their decisions.

Kelsey O'Callaghan , founder of Dorai Home, noted that the company suspended new launches after tariffs on Chinese products rose to as high as 145%. The subsequent reduction to 30% for 90 days proved insufficient to resume its plans.

The company laid off its CEO and head of development, leading O'Callaghan to take on multiple roles. "I haven't really put any time or emphasis on innovation," he admitted, following the pause in shipments from China and the subsequent partial resumption.

For example, while Trump boasts of progress in trade negotiations with China, business leaders like O'Callaghan say the tariff "roller coaster" continues to threaten their businesses. The lack of certainty impedes strategic investments.

Analysts at the Peterson Institute and the Technology Policy Institute warn that the emphasis on regulatory compliance over innovation could have long-lasting effects. “Companies end up optimizing for the political landscape, not the technological one,” they wrote.

The president's argument is that tariffs will protect domestic manufacturing. However, various experts and trade groups warn that the fragmentation of supply chains could reduce R&D , especially in technology and healthcare firms.

At Schylling Inc., a maker of nostalgic toys, the cuts came in the form of unpaid furloughs and, later, permanent layoffs. Its former marketing director, Beth Muehlenkamp , ​​said no new products are planned.

Made Plus, which makes footwear from recycled materials in Maryland, canceled a golf line due to its reliance on inputs manufactured in China. Although it plans to source parts from Vietnam, investment in new machinery is still on hold.

Its founder, Alan Guyan , said trade frictions are preventing him from evaluating advanced equipment. "We're closing ranks a bit," he said, awaiting a solution that will revive his commitment to American manufacturing.

In addition to stifling new ideas, uncertainty has also changed the way small businesses operate.

Managers who were previously focused on strategy and innovation now spend much of their time renegotiating orders and restructuring costs.

The constant fluctuation in tariffs—which change in a matter of weeks—is forcing many entrepreneurs to rework plans they had in place. This has led to the cancellation of projects in advanced stages, even affecting the morale of work teams.

The impact has also been felt in the relationship with consumers. Some companies must decide how much of the cost increase they will pass on to the final price, which could affect their competitiveness against larger companies with larger margins.

In contrast, large companies like Alphabet are moving forward with their plans . The tech giant announced $75 billion in investments this year , primarily earmarked for artificial intelligence.

Sonia Lapinsky of the consulting firm AlixPartners recommends her clients continue product development despite the obstacles. But she acknowledges that it's harder for small businesses to separate operational decisions from the impact of tariffs.

Rick Woldenberg , director of Learning Resources , said that up to 30% of the staff is partially focused on tariff issues. The company has halted the development of educational robots and is engaged in a legal battle against the Trump administration.

Although a federal judge ruled in their favor, the government appealed the decision. “Until we win in the Supreme Court, there will be no certainty,” said Woldenberg, who predicts that even with a victory, uncertainty could continue if the White House so decides.