Donald Trump: Small Shops, Big Worries: Trump's Tariffs Hit US Retailers

Donald Trump: Small Shops, Big Worries: Trump's Tariffs Hit US Retailers kns/roj/news.de • 5 hrs • 4 mins read Between treats and tennis balls, Noelie Rickey is struggling with the consequences of US President Donald Trump's policies. In 2022, she and business partners took over a small dog supply store: "The Dog Park" in the picturesque old town of Alexandria, Virginia, not far from the capital, Washington. At that time, sales figures were at their peak, says the former veterinary assistant. "Now they're at rock bottom." The reasons are varied. But 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 the brakes on certain tariffs and temporarily suspended them, he has even increased tariffs on 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. The exact impact of the measures is still unclear – it will likely take time for them to reach supply chains and consumers. But concerns about rising prices are high. Reports of panic buying are increasing. According to calculations by Yale University, the tariffs could lead to a long-term loss of purchasing power of an average of $2,700 (approximately €2,400) per US household by 2025. The trade conflict, which Trump claims will lead the US into a "golden age," is hitting small businesses like shop owner Rickey's particularly hard. She hasn't raised her prices yet, but she's unlikely to be able to sustain that for long. Many of her products aren't made in the US: pet food comes primarily from Canada. Toys, dog leashes, and other accessories made of fabric or plastic are predominantly from China. Ultimately, price matters. Many of the retailers Rickey works with, however, are small and based in North America, as she emphasizes – unlike large chains or online retailers that primarily focus on volume. Yet even her business partners' products often come from China. "If I tried to buy only American products, the store would look completely different," says Rickey. Ultimately, especially in times of high everyday costs, price matters to most of her customers, she explains – and the very practical needs of four-legged end consumers: "If a dog tears apart a toy every two weeks, you're more likely to go for the $10 model than the expensive $40 one." Toys, clothing, electronics, household goods Whether directly or indirectly, China is a major supplier of inexpensive consumer goods to the USA. This applies to retail giants like Walmart and Amazon as well as to small shops that sell toys, clothing, electronics, or household goods. "Many entrepreneurs rely on Chinese supply chains. Whether to keep their business running or to fill their warehouses," explains Alexis D'Amato of the Small Business Majority association, which claims to represent around 85,000 small business owners nationwide across a wide range of industries. What is considered "small" in retail is a matter of interpretation: The US Federal Trade Commission (SBA) includes businesses with up to 500 employees. Small Business Majority sets the threshold at around 30 employees. "Main Street" vs. Wall Street Even though the reality in many places is characterized by structural change, these owner-operated stores embody the American ideal of "Main Street" – the typical main street of small towns where everyone knows each other. It is the antithesis of the powerful, anonymous Wall Street. This image is deeply rooted in the nation's identity, across political lines. In fact, even these stores have long been integrated into global supply chains. Unlike large corporations, however, they have little leeway to cushion price increases or change their sources of supply, says D'Amato. She sharply criticizes Trump's erratic trade policy: "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 Minnesota shows how quickly this can become a threat to their survival. She described the plight of her family business, which has baby products manufactured in China, to CNN and CBS News. A new batch worth $160,000 was already ready for shipment when the tariffs rose in several steps to 125 percent. Instead of around $30,000 for importing the goods, the import would suddenly cost almost $200,000 – money she doesn't have. By now, it would have been even more.