'It’s really hard to see what the endgame looks like'

When DIGGS first started manufacturing high-end dog crates overseas in 2017, the total tariff level was 3.4%. In 2019, the rates went up to 28.4%. Now, with new China, steel, and aluminum tariffs, the level stands as high as 73.4% on its core products.   

That means for every shipment of their functional, comfortable dog crates, DIGGS must pay a 73% import tax (tariff). Israel Maynard, COO of DIGGS, says that on a typical import order of goods, he was paying about $2,000 in tariffs before this year’s increases. Now, on a similar shipment, his tariff bill is approximately $25,000—an increase of about $23,000.  

“It’s very impactful,” Maynard says. “It causes us to have to make choices every week on our payables. We’ve had to have some very uncomfortable conversations with our key partners.”  

Tariffs Are Slowing Growth and Increasing Prices

Maynard says he’s had to reduce headcount as a direct result of tariffs. They’ve also had to increase prices twice, delay expansion plans, and consolidate warehouses in Canada and Mexico—all as a direct result of tariffs.  

“You have to cut costs everywhere and try and look around the corner and anticipate where other impacts could be,” Maynard says. “Tariffs are limiting our ability to expand, and we won’t expand as quickly as we would have otherwise.”

Maynard is actively looking for sources outside China, but if he took the significant time and money to move production, there still would be significant risks—not the least of which are changes in global tariff rates.   

“We’re actively looking at sourcing options outside China,” Maynard says. “You can’t predict right now. If an agreement with Vietnam is in the offing and it settles in a tariff rate that’s more favorable—we’d be better off, but then what happens with tariffs in Vietnam?”  

The Challenges of Moving Operations to the U.S.

As for sourcing and manufacturing in the U.S., Maynard says it’s not feasible in the short- to medium-term. DIGGS crates are not just steel—they are steel and aluminum with injection-molded plastic components. The complex manufacturing and assembly process would take a significant investment to build from the ground up or to source domestically, and U.S. prices for steel are roughly twice what they are overseas due to a 50% tariff.

“We’d love to make our stuff here,” Maynard says. “You have to find and source all those parts in the U.S. and a cost where the math works. Right now, that solution isn’t available. It’s just not.” 

Maynard says that he hopes policymakers will see that small and medium businesses, which have the fewest resources to cushion the blow or find alternatives, are the most impacted by tariffs and will work to change course before it’s too late.  

Maynard believes in his product and its unique value proposition and that people are willing to spend money on their dogs, but he says in the short term, things are going to be “really tough.”  

“It’s the lack of clarity that’s really dangerous for businesses like ours,” Maynard says. “You get unintended consequences that are impossible to predict. I just don’t understand it. It’s really hard to see what the endgame looks like.”

About the author

Thaddeus Swanek

Thaddeus is a senior writer and editor with the U.S. Chamber of Commerce's strategic communications team.

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