WASHINGTON — Various businesses across the United States, from an ice cream shop in California to a medical supply company in North Carolina, are preparing for the financial impact of the new tariffs imposed by President Donald Trump on imports from Canada, Mexico, and China. These three countries represent the largest trade partners of the U.S., and the tariffs will start on Tuesday, with a 25% tax on goods from Canada and Mexico, and 10% on those from China. Notably, Canadian energy resources such as oil, natural gas, and electricity will face a lower 10% tax.
In response, Mexico’s president has announced retaliatory tariffs, while Canada’s prime minister has indicated that the country will impose matching 25% tariffs on up to $155 billion in U.S. imports. The Chinese government has expressed strong opposition, vowing to take necessary countermeasures to protect its interests, which may include lodging a complaint with the World Trade Organization against the “unjust actions” of the U.S.
Research from the Budget Lab at Yale suggests that these tariffs could reduce the average American household’s purchasing power by approximately $1,000 to $1,200 annually. Gregory Daco, chief economist at EY, warns that inflation, currently at a rate of 2.9% per year, could rise by an additional 0.4 percentage points this year due to the tariffs. He forecasts a decline in U.S. economic growth, projecting a drop of 1.5% this year and 2.1% in 2026 as increased import costs adversely affect consumer spending and business investments.
In Santa Cruz, California, Penny Ice Creamery is already feeling the pressure, as co-owner Zach Davis has had to elevate prices on popular ice cream flavors like “strawberry pink peppercorn” and “chocolate caramel sea salt” in recent years due to rising supply costs. With the impending tariffs, he fears he may have to continue this trend, complicating plans for future expansion that would require additional appliances, many of which are sourced from China.
The new tariffs will also impact the cost of sprinkles sourced from Ontario, Canada. Davis noted, “The margins are so slim, and losing a small profit can be crucial for our bottom line.” In Asheville, North Carolina, Aeroflow Health’s CEO, Casey Hite, anticipates difficulties as over half of the supplies, including breast pumps, are imported from China. Due to pre-set rates negotiated with insurers, these tariffs will force him to either settle for inferior products or increase health insurance premiums, which will eventually impact consumer costs.
Other products, like absorbent incontinence pads sourced from the U.S., still can’t escape the fallout of the import taxes, warning of potential disruptions. Linda Schlesinger-Wagner, who operates skinnytees, a women’s apparel line in Birmingham, Michigan, plans to absorb the 10% tariff costs instead of passing them on to clients, recognizing the broader repercussions of such tariffs on consumer goods prices, including cars and food.
William Reinsch, a former trade official, mentioned that businesses may have initially stocked up on imported goods before the tariffs took effect, temporarily shielding them from immediate repercussions. But construction companies are already bracing for price spikes, as George Carrillo from the Hispanic Construction Council expressed concerns about inflation impacting project timelines and costs once existing supplies dwindle.
The immediate effect of tariffs will be felt by industries that cannot stockpile goods, such as supermarkets, where fresh produce has a short shelf life. In the tomato trading hub of Nogales, Arizona, vendor Rod Sbragia fears that the tariffs could hurt distribution companies and ultimately limit consumer choices in grocery stores, pointing out the paradox of imposing tariffs amidst concerns about affordability and consumer access to food.
Additionally, American farmers are expected to suffer from the trade disputes as they face retaliatory tariffs on their goods. Historically, during Trump’s first term, China retaliated against his tariffs, affecting rural producers like soybean and pork farmers, prompting substantial government compensation. Many in the agricultural sector are now relying on assurances from the Trump administration to protect them from the consequences of these new tariffs.
In summary, businesses—big and small—are preparing for the potential economic fallout of these new tariffs, creating uncertainty that could ripple through various sectors and ultimately affect consumers’ wallets. As reactions unfold, the landscape of American trade and commerce is anticipated to face significant challenges in the coming months.
