Small US Importers Eat 20% Interest Rates to Cover Tariff Costs

Joseph Asia faced a dilemma. Tariffs imposed on his Chinese-grown, kosher frozen vegetables were jacking up his costs by about $2,000 for every shipping container entering the US. But the Brooklyn owner of Pardes Farms Inc. didn’t want to raise prices. So to help cover the tariffs and avoid a cash crunch, Asia swallowed hard and took out a $200,000 credit line charging 20%-plus interest.

He has plenty of company.

Slope Inc., the JPMorgan Chase & Co.-backed lending startup that arranged the short-term financing, says applications for its credit lines surged 730% year over year in August. That’s when it became clear to ...