Economists widely dislike tariffs, saying they tend to raise prices for consumers, a possibility many business executives have already warned about. Small business owners who weathered the Trump administration’s first round of levies told NBC News last month that they are struggling to adjust and many are looking for options to absorb higher costs compared to larger rivals. said that it is limited. The new tariffs demanded by President Trump would be much larger and far-reaching once fully implemented.
“President Trump imposed tariffs on China in his first term, creating jobs, stimulating investment and not causing inflation,” Trump transition press secretary Caroline Leavitt said in a statement. said. “President Trump will put American workers first by restoring American jobs, lowering inflation, raising real wages, cutting taxes, reducing regulation, and untying American energy.” We will work quickly to repair and recover the economy.”
Analysts generally disagree, but Wall Street appears skeptical that the next administration will fulfill all of its trade commitments.
“At face value, the Trump campaign’s policy proposals could lead to higher inflation in the short term and lower growth in the medium to long term,” S&P Global Ratings researchers said in a release Tuesday. said. But S&P analysts said the impact of tariffs on energy markets alone could cause the president-elect to back down, with some experts calling his recent pitch “typical Trump,” literally. He added that he viewed this as a negotiating tactic that should not be perceived as such.
However, many small business owners are not seizing the opportunity.
“Sadly, I’m even more concerned now,” brewer Chris Smith wrote in an email after the election. Smith, owner of Virginia Beer Company in Williamsburg, Virginia, said last month that he has been paying an additional $1,000 for tap handles every year since President Trump imposed a 25% tax on steel products in 2018. He said he was there. Currently, he is accelerating the purchase of stainless steel beer. Possibly Chinese-made steel fermentation vessels and grain silos.
Smith said the brewery typically adds one tank each year, which can cost up to $30,000. He is also keeping an eye on the price of aluminum cans and hopes to negotiate prices with brokers.
Angie Chua, founder of Bobo Design Studio, a small stationery company in Palm Springs, Calif., is already looking for ways to save money in case costs rise.
Chua manufactures her signature product, travel magazines, in China, but President Trump has threatened to impose a 60% tariff on exports. Before Trump’s recent announcement, Chua said he didn’t realize Trump wanted to tax Chinese products so high until he spoke with NBC News last week. “That would be the nail in the coffin for us,” she said. “Sixty percent is scary.”
Ms Chua said Bobo’s e-commerce sales have had a tough year, but she doesn’t have the funds to place large orders in advance and moving to domestic suppliers would be cost-prohibitive. So for now, she’s considering adding the tariff surcharge as a line item to the product so consumers can see what the price used to be.
Mr Chua echoed some of the uncertainty among market analysts, adding: “We will cross the bridge when we get there.” “How do you predict someone who is known for being very unpredictable? How do you predict that?”
Hadley Douglas, who co-owns the Boston wine shop Urban Grape with her husband, TJ Douglas, said that when evaluating how tariffs will affect the price they pay, consumers tend to think twice about imports. He said that there is a possibility that there will be a lot of attention, and that domestic industry will also be affected.
She works with distributors to deliver wine to stores, as required by law. Mr Douglas said if European and South American wines became more expensive, small sellers’ profits would decline and they could be forced out of business. But the same distributors also ship domestic wine across state lines, meaning U.S. wineries may have a hard time getting bottles on shelves.
It starts at the distribution level of a small family business and that becomes the first Domino’s.
Hadley Douglas, co-owner of Urban Grape in Boston
“It’s going to be a slow burn,” Douglas predicted. “It starts at the distribution level with a small family business and that becomes the first Domino’s. They operate on very thin profit margins.”
Mr. Douglas expects to raise prices to cover the cost of potential tariffs, but is concerned about losing customers as a result. She and her husband serve on the U.S. Chamber of Commerce’s Small Business Council. The council is a group of about 100 entrepreneurs from a variety of fields, and they agree on very little. Tariffs are an exception, she said. “Everyone is against tariffs.”
Not all companies have the cash on hand to stockpile inventory or accelerate purchases, as some big brands are already planning. Joe Hakim, general manager of Ackroyd’s Scottish Bakery in Redford, Michigan, is postponing his Easter chocolate orders, which normally take place in October, to ensure they arrive on time. But with potential tariffs on the horizon, they feared prices would skyrocket and decided not to take the risk.