GREAT FALLS — On Thursday, April 11th, the United States imposed 145% tariffs on China. China then responded with 125% tariffs on the U.S.. It’s the sixth wave in a series of trade barriers between the countries - the latest development in an ongoing global economic drama. But how’s it affecting businesses locally?
Pop into Phone Ninjas at 1520Third Street NW and you’ll find Joshua Rosales. He’s owned the shop for a couple of years, but is now weighing his options - even planning a potential exit strategy.
“Everything that we have here is made overseas. I mean, the number of products that I've got in store that were manufactured stateside are probably less than 8%,” says Rosales.
WATCH:
The vast majority of his best-selling products (Samsung, iPhone, and Google parts) are all imported from Vietnam and the most heavily sanctioned country, China. Rosales anticipates the cost of his services could go up between 30%-50%.
"It’s businesses like ours that are going to have to carry the weight on those costs,” he says.
He hasn’t felt the full brunt of a cost-hike yet, though he’s been informed by his distributors that it’s inevitable. What he has felt, is a lag in stateside distribution.
“Our distribution channels have slowed down excessively,” says Rosales. “We purchase from a company here stateside that imports all of their parts from directly overseas and deals specifically with manufacturers. Those manufacturers are having a difficult time getting those parts here.”
Unfortunately, the U.S. Chamber of Commerce seems to have few answers for small business owners given the unpredictable relationship between the President’s administration with tariffs. That sentiment, echoed by the Great Falls Chamber.
“I don't know if there's a way to provide an answer because we don't know,” says Ed Brown, President of the Great Falls Chamber of Commerce. “Unfortunately, when things change so drastically within hours, it's hard to have any facts or know the answer.”
So where do we currently stand with tariffs on a global scale?
All reciprocal tariffs imposed on Trump’s ‘Liberation Day’ have been pulled back as part of a 90-day pause and now rest at a still-elevated 10%. This current baseline includes the European Union and Japan, two important trade partners.
There are still 25% tariffs on nearly half of goods coming from Canada and Mexico, and 25% tariffs remain on steel, aluminum and automobiles. The administration has said they will place an additional 25% tariff on auto parts on May 3rd.
Nobody knows what will become of the pause once the 90 days have been reached.
According to the U.S. Chamber of Commerce, over half of U.S. manufactured goods are exported, and with tariffs expected to raise the costs of our goods, the Chamber warns it could undermine America’s global competitiveness.
The Chamber of Commerce also stated the imposition of tariffs is expected to cost the average American household $4,000 a year, and potentially put small business out.
“I have contemplated a number of times and signed a five year lease and debated a multitude of times of how many external factors there are that are detrimental to the profitability of this business, on whether or not it would just be easier to shut it down,” says Rosales.
The future is uncertain with no resolution in site between America and China, business owners watch with bated breath.
