For the past thirty years, Karl Brown, a Pennsylvania-based business tycoon has diligently worked to spread the reach of the state’s snack industry to a whopping 85 countries worldwide. His leadership role as CEO of Pretzel Pete and SB Global, located in the suburban region of Hatboro, Philadelphia, has catapulted the growth of the company which was established in the 1990s and now operates with a team of 60 dedicated employees. The U.S. federal government has been reportedly supportive of such expansion efforts, promoting American exports internationally through the provision of insurance guarantees, which are often deployed via the export-import bank. According to official records from the bank, over the past ten years, it has secured a commendable $4.6 million in exports for the local snack manufacturer.
Brown recalls a period of significant change during President Donald Trump’s first term when the United States imposed a heavy 25% tariff on incoming imports from China. Sadly, this decision resulted in a tit-for-tat response from the Chinese government, who reciprocated such measures by enforcing a similar 25% tariff on goods imported from the U.S., creating a considerable setback for Brown’s growing empire. Interestingly, years before the implementation of these tariffs, consumers in China had already developed an impressive predilection for Pennsylvania-made snacks, particularly pretzels and marshmallows.
During this prosperous era, American-made products were valued highly in the international market, often justifying their relatively high selling prices due to their perceived superior quality. However, the tariff-induced price inflation saw the value of these products soar to an all-time high, turning even the most premium products into unaffordable luxuries. Speaking of this tumultuous period, Brown shared, ‘We had an extremely strong foothold in the Chinese market, our most significant to date. Unfortunately, our business saw a sharp drop of 80% on account of these tariffs, causing major disruptions.’
Despite these challenges, the company has managed to rebuild, developing a strong presence in the Canadian and German markets. However, Brown revealed that new hurdles are cropping up with the introduction of tariffs once again. The recent turn of events sees exporters dealing with a 25% reciprocal tariff on goods headed to Canada and a further 10% tariff for American exports heading to Germany. According to Brown, these countries are now facing potential tariffs as part of Trump’s second-term strategies.
Relocating manufacturing facilities to evade tariff related issues is an option many large companies consider, but for local business owners like Brown, it presents an entirely new plethora of challenges. Identifying a new workforce and accumulating the necessary resources to manufacture in foreign countries such as Canada may not be feasible. Brown notes, ‘It’s not pragmatic to rely on tariff regulations as our primary tool for trade protectionism. It’s a misguided approach.’
He further expressed concerns about other non-tariff barriers standing in his path. Most recently, all lingering exports to China from Brown’s company were abruptly cancelled. The governments of both countries escalated tariff rates drastically, with the U.S. imposing tariffs up to 145% and China responding with a nearly equal measure of 125%. The situation is further complicated because exports are usually customized to the tastes and preferences of each importing country.
Brown elaborated, ‘Often we have to alter recipes or ingredients based on regional preferences. Packaging also varies from country to country, leading to increased costs. The worst outcome is when we are left with surplus product due to cancelled orders, which poses a significant financial burden on us.’ Contractual agreements with suppliers, which typically span six months to a year, sum up the final piece of the puzzle in this complex trade war. If the cost of raw material imports rises within the contractual period, the duty of balancing the cost difference falls squarely on the manufacturer.
Brown anticipates a necessary rise in prices by a minimum of 10% due to these ongoing struggles. If the tariff war shows no signs of resolution within a 90-day window, the company will have to brace for potentially bigger challenges. Despite this, he remains hopeful and committed to his company’s growth.
Every year, Pennsylvanian companies successfully export goods amounting to billions of dollars globally. As per the U.S. Census data, key export markets include Canada, which accounted for 27% of total state exports in 2024, culminating in an impressive total trade value of $14.2 billion. Other important markets include Mexico, China, the Netherlands and Japan.
Categorizing exports by segment, the leading categories to Canada comprise computing and electronics sectors, chemicals and machinery. The candy industry fared reasonably well too, with companies successfully exporting sugar and confectionery products amounting to $634 million to Canada and an additional $87 million to Mexico, as per data gathered from the 2024 Census.
Chinese trade relations were also quite robust, with the state exporting products worth $3.4 billion to China in the same year. Mainly, the state’s exports to China consisted of coal and petroleum products, machinery and pharmaceuticals. Remarkably, the same data reflects that Pennsylvania businesses also made significant profits through the export of meat, valued at around $68 million to China during 2024.
Boosting international commerce, especially when it comes to facilitating exports for small businesses, has been a key focus for several nonprofit technical assistance centers like the World Trade Centers. One notable entity working in this domain is the World Trade Center of Greater Philadelphia, helmed by CEO Thomas Young. Representing an extensive network of 150 different member companies from diverse industries like life sciences, advanced manufacturing and food processing, Young’s organization serves business interests extensively.
However, swings in the broad market during trade disputes pose quite a bit of trouble for businesses, admits Young. His observation indicates that approximately 60% of local World Trade Center members are exporters while the remaining 40% are involved in importing goods and services. “The unpredictability of it all is the major source of concern for our valued members,” notes Young. As a result, some companies are now favoring a long-term business approach.
A number of business entities are considering nearshoring their operations so as to bring them closer to the U.S.{ }initiative aims to avoid the severe tariffs imposed on goods originating from distant locations. Yet, despite the prevalent issues, Young observes that many businesses remain hopeful about the market and the tariff situation. ‘They are viewing the future with a level of cautious optimism,’ he adds.
In a significant event slated for the coming year, Philadelphia will welcome the Global Business Forum, which is expected to host more than 300 World Trade Centers from 90 different countries. Young says, ‘This event is an opportunity for influential business leaders, global investors and even some government representatives to gather in Philadelphia. It’s an invaluable opportunity for us to engage, connect and discuss business in a global context.’
Watchers, both from within the U.S. and abroad, are keenly observing the outcomes of these discussions. They are interested not only in monitoring the developments around tariffs but are also paying close attention to national policies regarding other factors such as immigration. Young concludes, ‘It surely is an exciting yet challenging time for international trade.’