Small businesses are already feeling Trump’s tariffs

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On China, Canada, and Mexico, the president and his supporters claim that they are a benefit to American businesses. If products from China are more expensive, the argument goes, then people will instead buy from counterparts based in the US.

For US-based small businesses that manufacture products, the tariffs are already driving up their costs, which will likely lead them to increase prices for consumers.

Her husband, Geoffrey, is the designer and craftsman; Schafer Franklin handles all other responsibilities.

One of her responsibilities is maintaining the company's inventory and stock, as well as ordering additional components and pricing products. The company's core material is leather, which they purchase from a fifth-generation leather tannery located in St. Louis, Missouri. However, the handmade items produced by Walnut Studiolo also require other supplies that the average consumer may not typically consider, such as thread for stitching, magnets and fasteners for game boards, and specialty screws that can be difficult to obtain.

Our current prices are determined by the cost of the components we buy," says Schafer Franklin. "We don't set prices based on what we think customers will pay. Instead, we factor in the cost of the materials we use, the time it takes to manufacture the product, and add a markup to cover our expenses.

Tariffs on imported aluminum and steel.

The idea that only foreign-made products would be impacted by tariffs ignores the reality of modern manufacturing: businesses of all sizes rely on a complex network of global suppliers. When one component becomes more expensive, the added cost trickles down to the consumer who ultimately purchases the product.

After the COVID-19 pandemic caused supply chain disruptions, the couple decided to keep a bigger stock of components on hand than they had before. For now, the price of their products hasn't increased because they bought the components earlier. However, this may change soon: when Schafer Franklin recently reordered specialty screws, she noticed her supplier had raised the price by 20%. A recent email from a magnet supplier warned of rising tariffs on Chinese goods: "prices will increase, possibly sooner than expected," the supplier wrote. "If you rely on magnets for your business or personal use, buying now is the best way to avoid higher costs."

I definitely feel stressed when that happens, because it's already tough enough competing with our prices, considering ours are handmade and the knockoffs are cheaper," Schafer Franklin says. "When the components start to cost more, we have to raise our prices, but that makes me less confident that we'll be able to sell as many, because price is really important. For small businesses, it's like trying to predict the future - we have to decide whether to buy supplies now at a lower price, but risk not being able to sell them afterwards.

Even US-based businesses that manufacture products domestically, the kind of companies the Trump administration has in mind when they say "America first," still rely on components or products made in China.

The game, made in an Oregon studio by hand, includes miniature playing cards that the couple wanted to include on the board. However, Schafer Franklin says after searching extensively, she was unable to find any US-based factories that produced half- and quarter-sized playing cards.

“Some products are made exclusively in specific regions, and I suppose custom playing cards were one of those cases,” she notes. She ultimately chose a company in China to create the custom cards, focusing on a manufacturer that was as ethical and environmentally responsible as possible.

Schafer Franklin says that sellers are being told that the company is "continuing to monitor the situation" but is offering little guidance.

The idea of "Made in America" is being promoted to the public as a way to support American businesses. Will tariffs lead to increased sales for companies such as Walnut Studiolo? Schafer Franklin is doubtful.