How a high heel entrepreneur is handling tariffs before the other shoe drops

NBC News

4 hours ago

Checkbook Chronicles
Haley Pavone testified to Congress that tariffs are crushing small-business owners' American dream.
June 21, 2025, 5:07 AM EDT
By Kayla Steinberg
Haley Pavone thought this was going to be the biggest and best year yet for her footwear company. Based in Southern California, she had big dreams for Pashion Footwear, the online business she started as a 20-year-old college junior that sells high heels that convert into flats.
Instead, she found herself imploring lawmakers for help as tariffs threaten to cripple her company.
'We went from duty-free status to paying actually 190% on average overnight,' Pavone told NBC News.
In the months since President Donald Trump took office, the trade war has swung wildly back and forth. Tariff rates have, at times, changed suddenly and dramatically as U.S. officials seek deals with other countries.
It has ensnared business owners like Pavone in a battle they didn't choose, as they struggle to plan for a future they can't clearly see.
'It has been chaos to say the least,' she said. 'It feels like small businesses are either being intentionally attacked or being completely forgotten. And I don't know which one is worse.'
Business breakdown
Pashion Footwear was born out of Pavone's own struggles with high heels. She loved wearing them but hated the inevitable pain that came with being hours on her feet. So in 2016, she founded Pashion.
'It's the biggest love-hate relationship in women's closets,' she said. 'And we're trying to change that.'
Pavone's company has grown to employ 12 and has patents in the United States, China and the European Union. for its sole-support technology. And last year, Pashion made $9 million in gross revenue, up 88% from 2023.
Pavone attributes much of that success to social media. She and the company have more than 2 million followers combined across TikTok and Instagram, with posts showing an array of heels transforming into flats with a quick twist and press.
Tariff troubles
For Pavone's small business, it has never been easy: between Trump's first trade war with China and then the pandemic — plus the ensuing supply chain crisis and recession.
Pavone said this year she had expected her business to grow 150%, planned to hire several employees and was looking into wholesale.
But then Trump eliminated the 'de minimis' exemption, which allowed items from China valued at $800 or less to come into the U.S. duty-free. The change took effect May 2.
'We went from making about 19-20% per shoe after all of our operating expenses to actually losing about $40 per shoe,' Pavone said. The Walnut Knit Booties that used to make the company $43.70 per pair, she said, turned into a $41.16 loss.
After the U.S. and China agreed to a 90-day tariff pause, Pashion was left with tariffs of 36% to 75% on each product. The company has paid more than $50,000 in tariffs to U.S. Customs and Border Protection since the May 2 change.
The company's shoes are manufactured in China, and Pavone said they can't be made elsewhere — though it's not for lack of trying.
'I've tried talking to manufacturers in Vietnam, Brazil, India and even one very small factory I was able to find in the U.S.,' she said. 'All of them have unanimously said that China is the only supply chain currently that can do what we need at scale.'
And Pashion was hit hard by another rule change. Earlier this year, it qualified for and signed a $5 million loan from the Small Business Administration. Pavone planned to use that money to buy Pashion out of predatory debt it took on to survive the pandemic, invest in hiring and buy more inventory. But the Trump administration changed the qualifications to receive the funding, now requiring all shareholders to be U.S. citizens — and Pavone said her company raised 1.7% of its funding from international investors. The loan was pulled.
'We feel completely ignored, and we also feel completely out of control,' she said. 'It basically feels like we're just waiting for the other shoe to drop every second of the day.'
Taking action
The changes and uncertainty have dashed Pavone's big dreams for the year. She said she slashed inventory orders from $1 million for the fall and $1.5 million for the holidays to around $300,000 each, wanting to keep her budget open to assume tariff liability.
'This went from being a growth year to a year where we're really just trying to make ends meet and stay afloat,' she said.
To handle the increased costs, the company added a tariff tax averaging $15 to $25 per product when U.S. customers check out. Demand from U.S. consumers has since dropped around 30%, Pavone said.
'There's plenty of customers where even though they understand what we're doing, they're now priced out of what they can pay, so they can't buy,' she said.
She shared her frustrations on TikTok, breaking down for her followers exactly how tariffs are affecting the business.
And at a hearing in May, Pavone explained to lawmakers just how painful the changes have been.
'Every day that these trade policies continue, it means the death of more American dreams,' she told lawmakers. 'This is not a short-term pain. This is the destruction of livelihoods, both for entrepreneurs and those they employ.'
Pavone hopes her testimony could help lawmakers push for relief.
'No matter what happens, I at least know that I've fought as hard as anyone possibly could,' she said.
Kayla Steinberg
Kayla Steinberg is a producer at NBC News covering business and the economy.