American businesses are coping with President Trump’s extended tariff war with China by swallowing smaller profits, implementing selective price increases and shifting their Chinese orders to factories in countries such as Vietnam or Mexico.

Those strategies have helped blunt the domestic fallout from Trump’s favored trade tool. But tariff burdens that once appeared bearable — either because the financial cost was modest or they were considered a temporary negotiating tool — now are testing businesses’ ability to adjust.

“If some of your competitors are not in the U.S. and they’re not subject to this tariff, you’re at an obvious disadvantage in the marketplace and many of your competitors can attempt to take advantage of that,” Paul Manning, chairman and chief executive of Sensient Technologies, told investors July 19. He added: “There are a lot of complications that are associated with tariffs.”

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Trump says tariffs give him leverage to compel China to abandon elements of its state-directed economic model that disadvantage U.S. companies. He also insists — contrary to most evidence — that the Chinese are paying the import taxes.

The president more than doubled levies on $200 billion in Chinese goods in May, raising costs for scores of American manufacturers, and has repeatedly threatened to hit an additional $300 billion in imports.

Leading business organizations that support Trump’s goals, including the U.S. Chamber of Commerce, say tariffs are a costly and disruptive tool that should be shelved as soon as possible.

“Companies stop working on their next-generation innovations and focus instead on retooling their supply chains,” said Christine McDaniel, an economist at George Mason University’s Mercatus Center.

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Dozens of companies have begun shifting their supply chains from China to other locations, although most stay outside the United States, disappointing Trump’s hopes of a large-scale reshoring of lost factory jobs.

Fastenal, a maker of industrial and construction supplies based in Winona, Minn., moved “a chunk of our product out of China,” mostly to Taiwan, Daniel Florness, the company’s chief executive, said earlier this month.

Tailored Brands, owner of Men’s Wearhouse and Jos. A. Bank, told investors last month it was cutting its reliance on Chinese suppliers to less than 20 percent this year from 30 percent in 2017.

With the trade talks at an impasse, tariffs appear likely to linger, confronting companies with decisions that carry more far-reaching consequences.

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Gentex of Zeeland, Mich., which makes self-dimming rearview mirrors for automobiles, may shift the final assembly of its products for the Chinese market to Shanghai from the United States, chief executive Steve Downing told investors on Friday. That would involve capital investment to convert a distribution facility into an assembly plant, he said.

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The company now pays both U.S. tariffs on components it imports from China and Chinese retaliatory tariffs when it ships its products to customers there.

“We continue to hope that there’s a trade deal that would happen that would, you know, help us keep most of our business close to home. But, again, if it goes too long, then we recognize that there’s embedded costs we need to address,” he said.

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The president first hit China last summer with 25 percent tariffs, but on only $50 billion in imports, barely noticeable in a $21 trillion economy. Robert E. Lighthizer, the president’s chief trade negotiator, has said that the initial China tariffs were designed to minimize the effect on consumers by targeting intermediate goods, which companies buy to use in the production of final products.

The Chinese currency also lost about 10 percent of its value against the dollar last year, easing the tariff pain.

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In September, Trump imposed a modest 10 percent tariff on a much larger $200 billion tranche, which most manufacturers said they could absorb. When trade talks with China broke down in early May, he raised that tariff to 25 percent.

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That increase took effect in mid-June.

Annual tariff revenue has soared under Trump from about $37 billion at the end of the Obama administration to an estimated $70 billion expected in the current fiscal year. Tariffs are paid by American companies that import goods from other countries.

As the president’s tariff threats escalated, some companies began accelerating orders to beat a potential cost increase. KushCo Holdings, a maker of packaging materials for cannabis products, had $53 million worth of products on hand at the beginning of May, up from $12 million at the end of August 2018.

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“As a 10 percent tariff, it was livable. And then with the tariff jump we were able to move to a full, complete pass-through and it was understood by the marketplace because obviously moving to [a] 25 percent tariff is not sustainable for a company like ours,” chief executive Nick Kovacevich, who says KushCo is passing on the cost increase to customers, told investors earlier this month.

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Some companies, including Tailored Brands, have leaned on Chinese suppliers to share the pain. “For production that remains in China, we have successfully completed negotiations with those vendors and they have agreed to absorb the majority of any impact,” said Jack Calandra, Tailored Brands’ chief financial officer.

The president last week repeated his contested claim that Americans “aren’t paying for” the tariffs. The most comprehensive analyses to date — a pair of studies by economists from institutions such as the Federal Reserve Bank of New York, Princeton University, the World Bank and Yale University — concluded that Americans are paying the entire bill.

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American Outdoor Brands, a firearms maker in Springfield, Mass., told investors last month that it is preparing its response in the event that the president proceeds with additional China tariffs, which could cost the company $3 million more in expenses each quarter.

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“You work with suppliers to get additional price concessions. You raise prices. You find other areas to offshore. And we think we can do all those things,” Jeffrey Buchanan, the company’s chief financial officer, said last month. “I’m not sure whether we can mitigate the full impact of additional tariffs, but we’re thinking about it right now and as to whether those are going to be imposed. It seems the story changes every day.”

Yet for all the talk about tariffs, the aggregate economic effect has been modest. Inflation remains below the Federal Reserve’s 2 percent target. And although some businesses have postponed planned investments, consumer spending in the factory and farm communities most exposed to the trade war has been unaffected, economists at Bank of America Merrill Lynch reported earlier this month.

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That could change if the president proceeds with his threat to extend tariffs to an additional $300 billion or so in Chinese imports, effectively taxing American businesses and consumers who buy from China.

“So far, companies have been able to increase prices to pass through tariffs as they are dealing with [business-to-business] relations where a rational conversation can be had about costs,” said Chris Rogers, a supply-chain specialist at Panjiva. “Putting up prices on consumer electronics, apparel, toys, etcetera, will be a lot more complex.”

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