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A UPS seasonal worker delivers packages on Cyber Monday in New York on Nov. 27, 2023.

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When Matt Kubancik, a small business owner in Louisville, Kentucky, cast his ballot for Donald Trump in November, he was hoping that the Republican nominee’s return to the White House would provide a spark to the economy and lead to reduced prices for gas and groceries.

Instead, the first half-year of Trump’s second term in the White House has been more like a “vacation from hell,” Kubancik said. Guardian Baseball, the baseball goods company he co-founded in 2018, mostly relies on manufacturers in China, which is locked in a full-blown trade war with the U.S. 

It didn’t take long for Kubancik to regret his vote. After 20 years as a Republican, Kubancik changed his registration to Democrat last month.

“I’ve been a registered lifelong Republican. I’ve supported independent candidates and Democratic candidates in the state of Kentucky before, but this made it enough to switch parties,” Kubancik said in an interview. “I don’t feel the country is headed down the right path.”

While the stock market has bounced back from a brutal start to the year, thanks largely to the Trump administration pausing its most extreme tariffs announced in April, small retailers that rely on imports to stay afloat are stuck in no-man’s land. Tariffs from China are still at a historically high rate of 30%, coming down at least temporarily from Trump’s prior announcement of 145% after the two countries reached a 90-day truce on May 12.

The big concern is what happens when that three-month agreement expires in August. Both countries have already accused each other of violating the preliminary trade agreement.

Guardian Baseball sells its products on Amazon and in brick-and-mortar stores like Walmart. Even at a rate of 30% for goods from China, its costs are significantly higher than they were before Trump took office. Some small businesses have stopped ordering more inventory or are hitting pause on new product development while they wait to see how the situation evolves. Others have been forced to raise prices because they can no longer afford to digest higher import costs.

The struggles faced by businesses like Guardian Baseball don’t necessarily show up in the data.

Matt Kubancik, who cofounded Guardian Baseball in 2018, said he voted for Trump but changed his party affiliation to Democrat after going through a “vacation from hell.”

According to a survey of 270 business leaders released on Monday from Chief Executive Group, less than 30% of CEOs forecast either a mild or severe recession over the next six months. That’s down from 46% who said the same in May and 62% in April.

And a quarterly report published Tuesday from the National Federation of Independent Business showed that optimism increased slightly in May from April, though “uncertainty is still high among small business owners,” NFIB Chief Economist Bill Dunkelberg said in the release.

U.S. and Chinese officials late Tuesday concluded two days of trade talks in London. Under the preliminary agreement, the U.S. would apply 55% tariffs on Chinese goods, Trump said in a post on Truth Social. The full details of the agreement have yet to be released. Trump said the deal is subject to approval by his administration and China President Xi Jinping.

“President Xi and I are going to work closely to open up China to American Trade,” Trump wrote in a post. “This would be a great WIN for both countries!!!”

Commerce Secretary Howard Lutnick told CNBC’s “Money Movers” on Wednesday that U.S. tariffs on Chinese imports won’t change from their current levels, even as a trade deal between Washington and Beijing has yet to be finalized.

The White House didn’t respond to a request for comment.

‘Everything’s on hold’

Like Kubancik, Alfred Mai says his business has mostly been in wait-and-see mode during the trade dispute, despite the 90-day pause announced in May.

Mai, co-founder of card game company ASM Games, said he grew increasingly worried last month as he thought about the “huge” inventory order he needed to place in time for the crucial holiday shopping period. He told his manufacturing partners to expedite production and speed shipments to the U.S. as fast as possible.

“I have no idea what the situation will look like after the 90-day pause, so I would rather take a gut punch now than to potentially be wiped out in the future by a massive tariff increase,” Mai said in an email.

The order is slated to arrive just as the short-term agreement between the U.S. and China ends. But if rates increase before his shipment makes it stateside, Mai said he may not be able to afford the tax needed to take ownership of his “vital holiday inventory.”

Prices are going up regardless. With a tariff on China of 30%, Mai said he’ll likely have to raise prices by 10% to 20% and hope that consumers are willing to pay.

At Down Under Bedding, which is based just south of Toronto in Canada, Tony Sagar says “everything’s on hold.”

Sagar’s company sources some of its goose down pillows and duvets from China and is considering discontinuing some of its lower-margin items because it can no longer to afford to compete with cheaper rivals.

“We’ve basically stopped any kind of importing or planning,” Sagar said in an interview.

Alfred and Sarah Mai, founded the card game company ASM Games.

Alfred Mai

Last month, Sagar said he was forced to refund a customer who purchased a $150 duvet but refused to pay $277 in additional tariff charges. He ran into the same issue last week after a shopper ordered a $595 duvet that came with a tariff bill of almost $1,200. Sagar said he now contacts “every single U.S. customer” after they place an order to make sure they’re willing to pay extra duties.

In addition to the China levy, the Trump administration placed a 25% tariff on goods from Canada.

“Any time I hear that ding from Shopify, I have to worry about where the order is coming from,” Sagar said.

Greg Shugar, who operates multiple apparel businesses, said the problem with trying to plan for the future is that policy decisions are “all about Trump’s ego.”

“If we understood the true motivation behind the administration we’d know where to go or what to do,” said Shugar, co-owner of women’s clothing company Carrie Amber Intimates and men’s accessory maker Beau Ties Vermont.

Shugar said Trump’s shifting position on tariffs has left him paralyzed on whether or not to move production out of China.

Greg Shugar, owner of Beau Ties Vermont.

Greg Shugar

Last month, he joined a group of other small business owners at an event organized by the National Retail Federation, with a plan to bring their concerns to the White House. The group met with a representative from the Trump administration for about 30 minutes.

Shugar said he left feeling more pessimistic about the tariff situation than before he walked in the door.

“We’re not going to eat a 30% tariff and neither is the consumer,” Shugar said. “So there’s actually no winners, there’s only losers with these tariffs.”

After Walmart warned last month that it will have to raise prices, Trump told the retail giant to “eat the tariffs.”

Kubancik of Guardian Baseball said his company “got a big break” last year when it signed a deal with Walmart to put its products in 3,000 stores.

Now he’s delaying inventory orders from China and taking a more conservative approach to coming up with new products, because the company can’t afford to take on added risk.

“It felt like we finally made it as a brand,” Kubancik said. “And now it feels like a plane nosediving.”

WATCH: Trump is now recognizing China has more leverage than expected

Trump is now recognizing China has more leverage than he thought: Expert

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Tripadvisor stock surges 17% as Starboard Value builds sizable stake in online travel company

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Tripadvisor stock surges 17% as Starboard Value builds sizable stake in online travel company

The Tripadvisor logo is displayed on a tablet.

Mateusz Slodkowski | Sopa Images | Lightrocket | Getty Images

Tripadvisor stock jumped 17% Thursday after Starboard Value revealed a more than 9% stake in the online travel company, according to a securities filing.

The position was valued at about $160 million as of Wednesday’s close.

Tripadvisor shares have been flat since the start of the year after plummeting more than 30% in 2024. Last year, the travel review and booking company said it created a special committee to explore potential options.

Read more CNBC tech news

Starboard Value has gained a reputation for pushing for changes such as new CEOs and cost cuts by acquiring significant shares in companies.

Most recently, the firm settled a proxy fight with Autodesk, where it gained two board seats. It has previously pushed for changes at Tinder parent Match Group, pharmaceutical giant Pfizer and Salesforce.

The Wall Street Journal was the first to report the news late Wednesday.

Tripadvisor did not immediately respond to CNBC’s request for comment. Starboard declined to comment on the news.

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Apple’s China iPhone sales grows for the first time in two years

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Apple's China iPhone sales grows for the first time in two years

People stand in front of an Apple store in Beijing, China, on April 9, 2025.

Tingshu Wang | Reuters

Apple iPhone sales in China rose in the second quarter of the year for the first time in two years, Counterpoint Research said, as the tech giant looks to turnaround its business in one of its most critical markets.

Sales of iPhones in China jumped 8% year-on-year in the three months to the end of June, according to Counterpoint Research. It’s the first time Apple has recorded growth in China since the second quarter of 2023.

Apple’s performance was boosted by promotions in May as Chinese e-commerce firms discounted Apple’s iPhone 16 models, its latest devices, Counterpoint said. The tech giant also increased trade-in prices for some iPhone.

“Apple’s adjustment of iPhone prices in May was well timed and well received, coming a week ahead of the 618 shopping festival,” Ethan Qi, associate director at Counterpoint said in a press release. The 618 shopping festival happens in China every June and e-commerce retailers offer heavy discounts.

Apple’s return to growth in China will be welcomed by investors who have seen the company’s stock fall around 15% this year as it faces a number of headwinds.

U.S. President Donald Trump has threatened Apple with tariffs and urged CEO Tim Cook to manufacture iPhones in America, a move experts have said would be near-impossible. China has also been a headache for Apple since Huawei, whose smartphone business was crippled by U.S. sanctions, made a comeback in late 2023 with the release of a new phone containing a more advanced chip that many had thought would be difficult for China to produce.

Since then, Huawei has aggressively launched devices in China and has even begun dipping its toe back into international markets. The Chinese tech giant has found success eating away at some of Apple’s market share in China.

Huawei’s sales rose 12% year-on-year in the second-quarter, according to Counterpoint. The firm was the biggest player in China by market share in the second quarter, followed by Vivo and then Apple in third place.

“Huawei is still riding high on core user loyalty as they replace their old phones for new Huawei releases,” Counterpoint Senior Analyst Ivan Lam said.

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Like Google, China’s biggest search player Baidu is beefing up its product with AI to fight rivals

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Like Google, China's biggest search player Baidu is beefing up its product with AI to fight rivals

Pictured here is the Ernie bot mobile interface, with the Baidu search engine home page in the background.

Future Publishing | Future Publishing | Getty Images

Chinese tech giant Baidu has bolstered its core search platform with artificial intelligence in the biggest overhaul of the product in 10 years.

Analysts told CNBC the move was a bid to keep ahead of fast-moving rivals like DeepSeek, rather than traditional search players.

“There has been some small pressure on the search business but the focus on AI and Ernie Bot is a key move ahead,” Dan Ives, global head of tech research at Wedbush Securities, told CNBC by email. Ernie Bot is Baidu’s AI chatbot.

“Baidu is not waiting around to watch the paint dry, full steam ahead on AI,” he added.

Baidu AI overhaul

Baidu is China’s biggest search engine, but — as is also being seen by Google — the search market is being disrupted.

Users are flocking instead to AI services such as ChatGPT or DeepSeek, which shocked the world this year with its advanced model it claimed was created at a fraction of the cost of rivals.

But Kai Wang, Asia equity market strategist at Morningstar, also noted that short video platforms such as Douyin and Kuaishou are also getting into AI search and piling pressure on Baidu.

To counter this, Baidu made some major changes to its core search product:

  • Users can now enter more than a thousand characters in the search box, versus 28 previously;
  • Questions can be asked in a more direct and conversational manner, mirroring how people now use chatbots;
  • Users can ask questions through voice but also prompt the seach engine with pictures and files;
  • Baidu has integrated its AI chatbot features, which enable users to generate photos, text and videos, into the product.

“This is more aligned with how people use ChatGPT and DeepSeek in terms of how they look for answers,” Wang said.

Outside of China, Google has also been looking to enhance its core search product with AI, highlighting how search has been under pressure from the burgeoning technology.

Baidu on the offense

Baidu was one of China’s first movers when it came to AI, releasing its first models and ChatGPT-style product Ernie Bot to the public in 2023. Since then, it has aggressively launched updated AI models.

However, the Beijing-headquartered company has also faced intense competition from fellow tech giants like Alibaba and Tencent, as well as upstarts such as DeepSeek.

These companies have also been launching new models and infusing AI into their products and Baidu’s stock has fallen behind as a result. Baidu shares have risen around 2.5% this year, versus a 30.5% surge for Alibaba and a 20% rise for Tencent.

“This is a defensive and offensive move … Baidu needs to be aggressive and perception-wise show they are not the little brother to Tencent on the AI front,” Wedbush Securities’ Ives added.

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