It’s a Wait and See on Tariffs’ Impact, DeepSeek AI, and Potential Changes to the SBA

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 in the news and talk about them because they impact your business and mine. So, let's get right to it, shall we?

Well, this week has been big news when it comes to tariffs. The Trump administration originally imposed tariffs on Canada and Mexico at 25% and another 10% on China, as well.

The tariffs themselves on Canada and Mexico, according to the Wall Street Journal, were imposed to put more soldiers on the border to, you know, stop or hinder immigration, as well as to stop the flow of fentanyl into the country.

After a day or so of opposition from both Canada and Mexico, the two leaders of the two countries decide to, you know, listen to what President Trump was saying, and they did agree to put more soldiers on the border and, to do whatever is necessary to restrict the flow of fentanyl into the U.S.

So, those tariffs have been delayed for about a month. They've not been canceled. So, there'll be more news to come about them.

As far as China is concerned, the 10% additional tariff comes on top of other tariffs that were already imposed by the Biden administration, according to the Wall Street Journal. China has done some limited retaliatory tariffs back on the U.S.

All of this impacts your business. If you're a retailer, you're in e-commerce, you buy products from China. Maybe you're a parts distributor, you're in the agriculture business and rely on produce from Canada and Mexico or, you're in the construction business and buy lumber from Canada. Lots of industries are affected.

Obviously, there are pros and cons and a big debate about tariffs right now, but as things stand the tariffs to both Mexico and Canada that have been proposed are on hold for a month – those 25% tariffs until we hear more information from the Trump administration.

The next bit of news is a piece that actually I wrote, but it was big news. I wrote this in the Washington Times last week about DeepSeek.

DeepSeek is the new AI platform that will basically do what OpenAI and a lot of the other popular AI platforms do – but at one-thirtieth (1/30th) of the cost that has created a huge uproar in the AI world and caused the shares of Nvidia, the big chip maker, to fall significantly when the announcement was made.

A lot of that decrease has actually been gained back. But the issue is whether or not people should be concerned about DeepSeek’s new technology that does the AI modeling and processing at such a much, much lower cost. The piece I wrote in the Washington Times last week address that.

I think it's great news for small businesses. I think the cost of AI is significant when you think of all the processing in the billions that have been spent at server farms around the world to do this AI processing. Now, if we've come up with a way for doing it, at 1/30th of the cost that certainly makes the field a lot more level for small businesses. You think more will be jumping in. Also, it opens up a lot of opportunity for a lot of startups to get involved because the costs have come down so much.

One big drawback to DeepSeek is that it is a Chinese-backed AI platform. So, a lot of businesses have concerns in the U.S. about their privacy and confidentiality of the data that they would be using the platform for.

So, I don't think it's a, a big detriment. I think it's actually a big plus for small businesses, but the DeepSeek news was big news during this past week.

Finally during this past week, according to a report in the Philadelphia Business Journal and other business journals, Kelly Loeffler, was interviewed and went through her confirmation hearings as the new administrator of these Small Business Administration. She is a former senator. She has a lot of experience, and she has big plans for the Small Business Administration.

Her plan is to, you know, take a full, you know, top-down review of the entire administration. She wants to go after a lot of bad loans that have been issued by the administration, particularly during COVID, and she wants to see if she can increase and enhance the customer service performance of the administration to better serve small businesses.

So, we got to keep an eye on her. She will be the new administrator once she is confirmed. It is, you know, a sure thing that she will be and, we will see somebody new in charge of the Small Business Administration.

My name is Gene Marks, and you have been watching or listening to this week's Paychex THRIVE Week in Review. Hopefully you've enjoyed it and got a lot of good information out of it.

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We'll see you again next week with more news that impacts your business and a few comments on how it impacts your business as well. See you soon.

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