Small stores, big worries Trump's tariffs hit US retailers hard
Donald Trump is on a confrontational trade policy course, especially against China. But what is being touted as protection for domestic production is harming many businesses in the USA.
No time? blue News summarizes for you
- Trump's tariffs are causing great concern in the USA about rising prices. There are also increasing reports of hoarding.
- Although the President has backtracked somewhat, the tariffs on most goods from China are currently at 145 percent. China is a major supplier of cheap consumer goods to the USA.
- According to calculations by Yale University, the tariffs could lead to an average long-term loss of purchasing power of 2700 dollars (around 2200 francs) per US household this year.
Between treats and tennis balls, Noelie Rickey is struggling with the consequences of US President Donald Trump's policies. In 2022, together with business partners, she took over a small specialist store for dog supplies: "The Dog Park" in the picturesque old town of Alexandria in the state of Virginia, not far from the capital Washington. Back then, sales figures were at their peak, says the former veterinary nurse. "Now they are at their lowest point." There are many reasons for this. However, she is particularly concerned about Trump's tariff offensive against almost the entire world.
China tariffs now at 145 percent
Although the US President recently put on the brakes and suspended certain tariffs for the time being , he even increased them against China: The tariff rate for most goods from the People's Republic is now 145 percent. Special tariffs also continue to apply to most other countries, including neighboring Mexico and Canada.
It is still unclear what impact the measures will have in detail - it is likely to take time for them to reach supply chains and consumers. However, there is great concern about rising prices. There are increasing reports of hoarding. According to calculations by Yale University, the tariffs could lead to an average long-term loss of purchasing power of 2,700 dollars (around 2,400 euros) per US household by 2025.
The trade conflict, which Trump claims will lead the USA into a "golden age", is hitting small businesses like store owner Rickey's particularly hard. She has not yet raised her prices, but she will hardly be able to hold out for long. Many of her products do not come from the USA: food comes mainly from Canada. Toys, dog leads and other accessories made of fabric or plastic mainly come from China.
Ultimately, it's the price that counts
Many of the retailers Rickey works with, on the other hand, are rather small and come from North America, she emphasizes - unlike large chains or online retailers who focus primarily on quantity. But even her business partners' products often come from China. "If I tried to buy only American products, the store would look very different," says Rickey.
In the end, it's the price that counts for most of her customers, especially in times of high everyday costs, she explains - and the very practical needs of the four-legged end consumer: "If a dog breaks a toy every two weeks, they're more likely to go for the 10-dollar model than the expensive 40-dollar one."
Toys, clothing, electronics, household items
Whether directly or indirectly, China is a major supplier of inexpensive consumer goods to the USA. This applies to retail giants such as Walmart and Amazon as well as small stores that sell toys, clothing, electronics or household items.
"Many entrepreneurs are dependent on Chinese supply chains. Whether it's to keep their business running or to fill their warehouses," explains Alexis D'Amato from the Small Business Majority association, which claims to represent around 85,000 small businesses from a wide range of sectors across the country. What is considered "small" in retail is a matter of interpretation: the US SBA counts businesses with up to 500 employees as such. Small Business Majority draws the line at around thirty employees.
"Main Street" vs. Wall Street
Even though the reality in many places is characterized by structural change, these owner-managed stores embody the American ideal of "Main Street" - the typical main street of small towns where people know each other. It is the antithesis of the powerful, anonymous Wall Street. This image is deeply rooted in the national self-image, across political camps.
In fact, even these stores have long been integrated into global supply chains. Unlike large corporations, however, they have hardly any leeway to cushion price increases or change their sources of supply, says D'Amato. She harshly criticizes Trump's trade policy lurch: "It feels like there are new tariffs or changes every other day." Long-term planning? Practically impossible.
Some face financial ruin
The example of Beth Benike from the state of Minnesota shows how quickly this can become a matter of survival. On the US broadcasters CNN and CBS News, she described the plight of her family business, which manufactures baby products in China. A new batch worth 160,000 dollars was already ready for shipment when the tariffs increased in several steps to 125 percent. Instead of around 30,000 dollars to import the goods, the import would suddenly cost almost 200,000 dollars - money she didn't have. In the meantime, it would be even more.
Benike is not only worried about her employees. Her own home is also at stake: it secures a business loan.
There is a lack of locations and skilled workers
And then there are the financial markets. In the USA, retirement provision is closely linked to the stock market. Many self-employed people rely on their stock portfolio. If the markets fluctuate, their future will fluctuate too, warns D'Amato. Trump's customs policy is "a slap in the face" for many of her association members. What they actually need is support. She does not accept the government's argument that tariffs will ultimately strengthen domestic production. "There are enough other ways," says D'Amato.
Store owner Rickey agrees. If you really want to promote domestic production, you have to invest - in subsidies, locations, skilled workers. "People who can operate a sewing machine and produce large quantities of dog toys don't exist here," she says, adding with a view to Trump's tough migration policy: "If they do, then we'll just deport them as quickly as possible."
More than just tariffs
What Rickey generally lacks in this government is a coherent concept. Tariffs are only one part, she says. There are several reasons why sales at "The Dog Park" are not going well: Corona aid has now expired, she says, while at the same time Trump's mass layoffs in federal agencies are making themselves felt - a deep cut for the region, where many work in the public sector. In addition, tourism in Alexandria has declined and with it the footfall.
But Rickey is also a pragmatic businesswoman who has long had various mainstays. Even before Trump's return to office, she added services to her offer: daycare for dogs and a pet grooming salon. Cats are also welcome.
