More Taxes on Imports, Job Lock for Health Insurance, ChatGPT Training for SMBs

Hey everybody, it's Gene Marks, and welcome to this week's episode of the Paychex Thrive Week in Review. This is where we take a few items out of the news, and we talk about them because they impact your small business and mind.

The first big news item of the week is tariffs. They are back, and there are a number of news reports out there, obviously, that have been covering this news. Not only these stories I'm about to tell you come from Newser or the Wall Street Journal, in particular. And here's the story: The president has rebuilt much of his tariff program after the Supreme Court rejected his use of emergency powers for broad import duties.

The administration imposed tariffs of approximately 10 to 12.5 percent on goods from more than 80 countries, arguing that foreign governments have failed to prevent products made with forced labor from entering their supply chains. The new duties rely primarily on section 301 of the Trade Act of 1974 and replace temporary global tariffs that were expiring.

Trump is also using other trade laws, including sections 232, 338, and 122, to impose or threaten additional tariffs on particular industries and countries. Canada faces especially severe pressure, including a proposed 50% tariff rate on selected products. Critics are arguing that the administration is using forced labor and trade discrimination as legal pretext to restore tariffs the court invalidated.

The Wall Street Journal's editorial board described the duties as economically harmful taxes, which are ultimately paid by American importers, businesses, and consumers. Further court challenges are expected.

So, I think I told you guys this a couple of months ago when the Supreme Court overturned Trump's emergency powers use of tariffs. Like, it ain't over. Now, first of all, a lot of refunds are available for you as well, and you should be talking to your broker of record to get the money back from the tariffs that were imposed on those prior programs that were invalidated by the Supreme Court. But I knew even at the time that President Trump was not done with tariffs.

And sure enough, he immediately imposed a temporary 10% tariff on many countries. He knew he had, I think, a certain amount of period where that would be effective, while his administration is working on implementing tariffs based on things like forced labor and targeting certain industries and products, all which are allowed under the law.

The bottom line is this: Tariffs are not going away. But here's what's most important. Unless, like under specific materials, you know, certain things we're we're talking about products from Canada or certain things like steel from China. The 50% tariffs are pretty excessive. I think most of us can expect 10 to 12.5 or even 15% tariffs to be imposed across the board on various countries. And we're gonna see that filter through to our products. There's no question about it.

Now, the companies that are most exposed are the small businesses or e-commerce firms that just buy materials from China or Europe or directly, and then they turn around and sell them, and that's the basis of their business.

Most of the companies that I talk to, a 10% increase in that cost to their manufacturer by the time it comes down to them has usually been diluted and will likely be a little bit less and probably something that could be more manageable. But the bottom line is this: Inflation is already high and sticky for this year. I mean, fuel prices are behind that, and it doesn't look you know, optimistic for the Middle East, at least in the short term, until things get resolved there. So, you know, I expect the energy price to still stay high.

Other costs have been maintaining, under control. Inflation actually dipped this past month, but now with the implementation of these tariffs, they're going to threaten, you know, more cost increases. And, like the Wall Street Journal says, a lot of these costs are going to have to come down to consumers and taxpayers, and that's not good either. But that is the scenario that we're in.

So, going forward, you know, and I talk about this when I speak to industry groups, you know, controlling your overhead, investing in technology, being really, really good with your pricing and good relationship with your customers. You're going to have to do these and other things to navigate your way around these cost pressures, which also include tariffs. Anyway, tariffs are going up, okay.

All right, hey, a quick side note: managing your team doesn't have to be complicated. From hiring the right people to getting them on board and keeping things running smoothly. Paychex has the HR tools and support you need to do it all. It's like having an extra set of hands when you really need it. So, if you're curious, visit us at paychex.com/meetpaychex. That's P-A-Y-C-H-E-X.com forward slash M-E-E-T-P-A-Y-C-H-E-X. You can also find the link below in the show notes.

Okay, where were we? Let's talk about health insurance. A new poll came out that found that nearly one-quarter of U.S. employees … employees with employer-sponsored health insurance remained in jobs they dislike because they fear losing their coverage. This is up from one-sixth from five years ago. The West Health Gallup survey of more than 2,300 workers links this growing job lock to rising premiums, prescription costs, out-of-pocket expense, and concerns about the affordability of individual insurance.

The problem is especially pronounced among financially vulnerable workers. Forty-four percent of respondents with medical debt said they stayed at their jobs for insurance, compared with 21% of those without debt. More than 40% of workers with three or more chronic conditions also reported job lock, versus 17% of those without chronic conditions.

Women were more likely than men to remain in unwanted jobs, partly because they reported greater health care-related financial pressure.

Okay, so a few comments on this. If people are staying at their jobs because they need the health insurance, that's their decision. It should not preclude in their job performance at all. And honestly, you know, although you know the survey kind of like is alluding to the fact, like, you want to be careful about these employees, they're only there for the health insurance.

No, employees are staying for their compensation, as they should, and health insurance is one part of their compensation. So, as long as they're being compensated, you know, fairly. Good. Hopefully they will remain in their jobs and it shouldn't be an issue.

Which gets me to my next point. Clearly, this is a major, major issue for our employees. I mean, one in four are staying with their jobs because of health insurance. And putting aside nationally what could be done about the health insurance problem that this country has, as employers, we have to continue to make it a priority to provide the best and most affordable health plans that we can afford. We have to stay competitive that way. Otherwise, we will lose our employees to other firms that are providing better health care.

And I'll not say this is an easy answer, but there are strategies you can be taking to manage your health care costs better. I'm not going to go into those strategies in this podcast, but it's a conversation that's worth having in the future.

But the bottom line is this: many workers in this country are sticking around with their jobs mainly because of their health care, which underscores the importance of this benefit that we need to be providing to our employees again in one shape or form.

All right, in this week's AI news, the news is all about OpenAI and ChatGPT and their new small business program. This news comes directly from OpenAI. They have launched a program designed to help small businesses use ChatGPT to increase productivity, automate their work, and expand without adding additional staff.

The initiative includes practical virtual webinars, in-person AI academies, customer examples, downloadable guides, prompts, and other instructional videos. It will also feature integrations, specialized skills, and offers from partners like Dropbox and Shopify and Intuit, Slack, and Wix. OpenAI says participating businesses can use ChatGPT Work to complete multi-step projects, monitor markets, analyze inventory, prepare communications, and develop training materials.

At earlier small business AI events, 78% of participants reported creating a working AI workflow in one day, while 42% save more than five hours a week using AI. OpenAI plans to use feedback from participating owners to shape future products and resources.

So, a couple comments on that. I get that question a lot when I speak about AI. Where can I go for training? Where can I get resources? There are plenty of online training options that are available. Anthropic earlier this year released their Claude for Small Business product, which is essentially the same as ChatGPT's right now. I mean it’s integrations with major small business applications, you know, skills that can be built into automation and lots and lots of training, both in person or online.

We did a special Thrive podcast episode with the head of small business at Anthropic, where we talked a little bit more about that.

So, bottom line is this. If your business is using Claude, look up Claude for Small Business and check out the training and resource that they provide. If your business is using ChatGPT, go to OpenAI and look at the training and new small business offerings that AI is offering with Open with ChatGPT, because very similar to Claude, they are also offering training and other resources to help you use these platforms and tools that much better.

Everybody you have been watching or listening to the Paychex Thrive Week in Review, and my name is Gene Marks. Please subscribe to this podcast on your favorite podcast platform or on YouTube where a video version of this podcast is made.

If you need any help or tips or advice in running your business, sign up for a Paychex Thrive newsletter. Go to paychex.com/thrive. And remember, for all of your HR and payroll needs, consider Paychex. Go to paychex.com/meetpaychex and you can find out ways that Paychex can save you lots of time and money in doing your HR and payroll responsibilities.

Again, my name is Gene Marks. Thank you so much for joining us. We'll see you again next week with another episode of the Paychex Thrive Week in Review.

My name is Gene Marks, and you've been watching or listening to the Paychex Thrive Week in Review podcast. A few things to take away. First of all, if you are in need of HR or payroll help in your business, consider Paychex. Go to paychex.com/meetpaychex. That's P-A-Y-C-H-E-X.com forward slash M-E-E-T-P-A-Y-C-H-E-X. Please follow this podcast on your podcast platform or on YouTube if you are enjoying the content so you stay up to date on our latest episodes.

And if you need help or advice or tips in running your business, get our Paychex Thrive newsletter. Go to paychex.com/thrive and sign up for it there.

Hope you found this information helpful. I'll be back with you next week with more news that impacts your small business and mine. My name is Gene Marks. Thanks so much for watching or listening. Take care.

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