Tariffs to Trigger Price Hikes for Customers, Say Business Owners

Many business owners said new tariffs revealed by the government will force them to raise prices.

The government announced new tariffs against more than 60 countries set to go into effect August 7, with rates ranging from 10% to 41%. President Donald Trump has said tariffs will force US companies to reshore supply chains and increase domestic manufacturing. Many economists and supply chain experts have said that it could take years and cause prices to go up in the meantime.

Consumers likely to see higher prices

The new tariffs will be paid by importers, but economists said many businesses will pass those prices onto consumers.

"If they are going into effect, then I'll have to raise my prices within the next 90 days, because that will affect my next order," said Katrina Golden, founder and CEO of a coffee and dessert shop in Augusta, Georgia.

Doug Scheffel is the owner of ETM Manufacturing in Littleton, Massachusetts, and said new tariffs could hit his business even sooner — within 30 to 60 days in some cases.

New federal data released this week appears to show that previously announced tariffs are already impacting consumers.

Prices rose 2.6% in June compared to a year ago, according to the Bureau of Economic Analysis.

A panel of small business owners who spoke about the tariffs said the uncertainty was the most challenging factor.

President Trump initially announced tariffs on dozens of countries in April, but since then, country-specific tariffs have been delayed and changed multiple times.

"My message to President Trump would be just make a decision," Scheffel said. “Stop waffling. ... Continuing to be uncertain and not clear is causing chaos.”

Not knowing what the exact tariff rates against countries would be and when they would take effect made it difficult to rethink supply chains, according to Ron Kurnik, the CEO of Superior Coffee Roasting Company.

"If we just knew what the hell was going on here, we could maybe shift our supply chain from Colombia or Brazil to Honduras or Nicaragua or something that would work a little bit better for us going forward."

Companies differ on passing on costs

Procter & Gamble announced this week that it will raise prices on some goods in part due to tariffs. Company leadership said price increases will be in the mid-single digit percentages.

Other companies like General Motors have acknowledged tariffs are taking a bite out of their bottom line, but the carmaker has insisted it won’t pass those costs onto consumers shopping for a new car.

"They can eat the prices to some extent just to do good with their market, but your financial resources and inventory cushion, they all run out over time, and you'd have to think about passing that on,” said Sina Golara, an assistant professor of supply chain management at Georgia State University.

Golden worries that if tariffs go up more, she might need to go out of business.

"We're going to do the best we can to keep our prices where they are,” she said. “However, if prices go up, then we also have to raise our prices accordingly in order to make money. We're in this to make some money, to make a living, to support our families. ... So, we have to do what we have to do."