In the midst of escalating global trade tensions, small business owners across the United States are grappling with the challenge of managing new expenses stemming from tariffs on nearly all imports. Many American shop owners find themselves adversely affected by the ongoing trade war. Sarah Wells, who has operated a business specializing in breast-pump backpacks and other products for new mothers for 13 years, is contemplating how the new tariffs on imports, imposed by President Trump’s administration, will impact her operations.
Earlier this year, Sarah Wells Bags absorbed the cost of two rounds of tariffs, which became effective as the company’s shipment from China was in transit. Her substantial order was being loaded at a port in February when the U.S. administration increased tariffs on Chinese imports by 10%. By the time the goods reached the American shore in March, the tariffs had surged by an additional 10%, necessitating an unforeseen expense of $15,000 to release the merchandise from customs.
The latest round of tariffs has increased the total duties on Chinese imports to 54%, significantly affecting Wells’ profit margins. This situation forces her to contemplate raising prices, although there is a concern over the potential consumer backlash. Consequently, Wells plans to scale back operations by placing fewer orders, halting hiring, and suspending new product development.
Wells, based in Virginia, voiced concerns about transferring all costs to customers, suggesting that such business operations might result in closures. The retail sales growth forecast by the National Retail Federation for this year, projected to be between 2.7% and 3.7%, does not account for the full impact of the new tariffs, which now range from 10% to over 50%.
In response to these changes, large retailers like Walmart are negotiating discounts with foreign suppliers to mitigate some tariff impacts, a luxury smaller retailers lack. Many are considering reducing inventory, freezing hiring, pausing advertising, and curtailing expansion plans to survive in this challenging climate.
Jessica Bettencourt, who manages Klem’s general store in Massachusetts, reflects similar sentiments, indicating that businesses are now distinguishing between necessities and luxuries. President Trump argues that the tariffs could stimulate American manufacturing, but Wells and others have encountered challenges in sourcing domestically, citing higher costs and scale issues.
Rozalynn Goodwin, a business owner from South Carolina, echoed this sentiment, explaining that U.S. manufacturers have advised her to continue production in China due to cost constraints. Similarly, Bettencourt mentions that U.S.-made work boots are significantly more expensive than their imported counterparts, underscoring the dilemma faced by retailers in providing affordable options.
Ultimately, small-business owners express a desire to make independent decisions about their operations, a process increasingly encumbered by sweeping tariffs.
