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Yahoo
18 minutes ago
- Yahoo
Duty-free shops facing 'full-blown crisis' with no relief in sight
John Slipp took over his father's duty-free store in 1994, which had been started more than a decade earlier. This month, he closed the Woodstock Duty Free Shop Inc. as lower traffic at the U.S.-Canada border dealt the final blow to a business already weakened by the COVID-19 pandemic. Now, at 59, Slipp says he will have to find another source of income and is advocating for more government support for stores like his. Fewer Canadians have been heading south in recent months in response to U.S. President Donald Trump's trade war with Canada, his comments about annexing the country and because of fears among travellers about treatment at the border. In the duty-free industry, Slipp said less border traffic directly correlates to fewer sales. 'It was very difficult. The business had many good years. I certainly didn't want to be in the position of calling an end to a business career, giving up, calling it quits, both personally and in terms of my late father,' Slipp said. At the store's peak in the early 2000s, Slipp said there were about 15 people on staff. In March 2020, he said he laid off four people and reopened after the pandemic with two employees. Late in the summer of 2021, Slipp said duty-free stores were 'all starting from zero to rebuild again.' By the end of 2024, his business was still down about one-fifth from where it was in 2019. Then Trump returned to the White House. From January to April this year, things got worse for Slipp's store, and he ultimately decided to close based on declining sales and traffic numbers. 'Just realizing that even after the U.S. administration changes down the road, in our industry, we do not expect the border traffic to change overnight as a result of that. We believe it's going to take years,' he said. Recent figures from Statistics Canada noted that return trips from the U.S. dropped again in July as Canadians continue to shun travel to the U.S. The number of Canadian residents returning from the U.S. by automobile was down 36.9 per cent on an annual basis in July, marking the seventh consecutive month of year-over-year declines. Barbara Barrett, executive director of the Frontier Duty Free Association, said the stores her association represents have been feeling the decline in traffic for months. 'I would describe our industry as being in a full-blown crisis, and we've been saying that for a number of months now,' she said. Sales at duty-free stores have fallen between 40 and 50 per cent year-over-year across the country since late January, with some remote crossings reporting annual declines of up to 80 per cent, the association said. Barrett added that duty-free stores are often a microcosm of what is happening at the border. 'This should be our busy season during the summer, but it is not; it is pandemic-level traffic in the parking lots, and it has led to one store closing in the east. We are unfortunately afraid that we will likely see more closures as we draw to the end of the summer,' she said. Unlike airport stores, which are often owned by international companies, Barrett noted all of the land border stores are independently owned and are often family-run businesses. While Canadians shun U.S. trips, travel expert Claire Newell said many are opting for domestic and other international destinations. 'We live in a country where it's still very expensive to travel domestically. And while there are many people who are choosing to travel within Canada, we also see more people heading to popular destinations,' she said. She said she doesn't see Canadians changing their travel habits back to normal until there is a trade deal 'that feels fair.' As lower border traffic weighs on the industry, Barrett said she is advocating for 'small regulatory changes.' 'We have some taxes on our products that, believe it or not, in a tax- and duty-free industry that our U.S. competitors don't have. So we're asking for those to be changed so we can be more competitive,' she said. 'Also, we're asking to qualify for some of these tariff relief programs or pandemic-level supports along the lines of what they did during the pandemic with wage subsidy or rent subsidy.' Barrett said the government is the landlord for many duty-free stores and said a rent deferral or subsidy would help the industry until travel patterns normalize. She added that there have been conversations between her organization and senior government officials. Barrett said those officials agreed the association was putting forward 'small asks' to support the industry. An Aug. 2 release announcing the Woodstock Duty Free Shop's closure mentioned that the federal and provincial governments had promised tariff relief support programs to help businesses impacted by trade tensions. 'I pinned a lot of hopes on those when both levels of government made those announcements. I was reminded of the pandemic support programs,' Slipp said, adding that his business had benefited from such programs. His attention has now turned to advocating for rent deferral programs for duty-free shops renting land from either the federal government or from a bridge authority as well as loan programs for duty-free stores. When he looks at the future of the industry, he said the prospects "are not bright." 'I'm grieving the loss of my business, but I'm also accepting the reality that the business environment has changed and there is nothing in the bag of tricks that would suggest positive changes in this industry in the short to medium term," Slipp said. "I'm feeling bad that I was not able to succeed in the end and that I am having to lay to rest this business that my father and I have built and spent so many years working so hard on." This report by The Canadian Press was first published Aug. 17, 2025. Daniel Johnson, The Canadian Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Chicago Tribune
20 minutes ago
- Chicago Tribune
‘A terrible position': Illinois sprints to lower new SNAP costs without booting people who need it
As an outreach coordinator for one of the Chicago area's largest food banks, Joann Montes is already seeing an impact from President Donald Trump's reductions to public assistance programs even before those cuts take effect. Anxious older adults who for years received what were once called food stamps are approaching Montes at senior centers to ask if those benefits will continue and whether they'll have to return to jobs 'to be able to feed themselves.' 'Our folks who are 60 and older are asking questions about whether they're going to be able to receive SNAP,' Montes, who works at the Greater Chicago Food Depository, said about the Supplemental Nutrition Assistance Program. 'Will they have to go back to work?' A little more than a month after Trump signed into law a sweeping Republican domestic package that expanded work requirements for SNAP benefits to previously exempt groups such as adults ages 55 to 64, the state and people receiving benefits are getting ready for a recalibration. Democratic Gov. JB Pritzker's administration is sprinting to figure out how to avoid a potential $700 million price tag by changing operations to achieve a level of payment accuracy that the vast majority of states currently do not meet. At the same time, Illinois also must handle the federally mandated work requirements on new groups that experts say could lead to people losing benefits. 'It would be almost easier if the federal government just did what they set out to do, which is say, 'You are no longer going to be eligible for this program.' But instead, they are putting states on the front line to create bureaucratic barriers to turn individuals and families away,' Grace Hou, the deputy governor covering health and human services, said at a panel discussion in Joliet on Friday. 'These cost savings in the Trump spending bill will result in families getting kicked off their benefits because they can't manage the red tape.' In all, about 1.9 million Illinoisans receive aid through SNAP, which provides assistance for low-income families to buy food. The program's benefits have been fully funded by the federal government for six decades, while the administrative costs have been split between the federal government and states. Monthly benefits in Illinois among people receiving assistance averaged $192 for each member of a household in fiscal 2024, or $6.33 per day, according to the Center on Budget and Policy Priorities, a progressive think tank. But state officials say the changes written into the new federal law could place hundreds of thousands of Illinoisans at risk of losing those benefits. That jibes with a recent Congressional Budget Office report that estimated about 2.4 million fewer Americans will receive food assistance as a result of the new work requirements. 'Here the state is with less money and more challenge, going to have to take lemons and turn it into lemonade,' said Danielle Perry, vice president of policy and advocacy at the Food Depository, which, on top of its work as a food bank, helps people apply for and keep SNAP benefits. The GOP-led megabill that Trump signed into law July Fourth extends tax breaks that were set to expire and expands spending for the military and border security, funded in part by cuts to SNAP and Medicaid. 'Illinois' goal is to mitigate to the greatest extent possible the impact of the Trump spending bill on the SNAP program, and try to mitigate the harm it's going to wreak on poor families across the state,' Hou said in a separate interview with the Tribune. 'Our administration is going to do everything in our power to quickly put our structures in place to protect Illinois families.' Among the biggest reasons Illinoisans might get cut from SNAP is because of the key provisions in the megabill that initiate new work requirements for recipients who were previously excluded. The GOP bill expanded work requirements for able-bodied adults ages 55 to 64 — the cohort Montes was referring to — and those with dependents age 14 and older, among other groups. About one-third of SNAP recipients in Illinois are in a household with someone older than 60 or who has a disability, according to the progressive CBPP. What's more, many Illinois SNAP recipients have been exempt from work requirements altogether for years because of a waiver tied to unemployment in the state. But that exemption is expected to end this year, as the new bill hikes the state unemployment threshold. States are awaiting guidance from the federal government on the new work requirements, including the timeline for implementation. 'This will create a constant churn of applications as people fall on and off eligibility,' Illinois Department of Human Services spokesperson Rachel Otwell said in an emailed has already included funding in its budget for about 100 new caseworkers and operations staff with IDHS to begin addressing the added paperwork that is expected to be created from the new requirements, as well as changes to Medicaid. Officials with the Pritzker administration said they anticipated earlier this year that they would need additional staff even without knowing the specifics of the Republican-led tax bill. Now, the department is looking into the number of additional staff it might need to deal with SNAP changes, according to the governor's office. Beyond that workload, Illinois faces potentially hundreds of millions of dollars in added costs. The Republican-led bill raises the administrative levy for states, which in Illinois would mean spending an additional $80 million, according to the governor's office. Those costs are expected to kick in October 2026, according to the Center for American Progress think tank. Plus, any further improvements to computer or communications systems will likely cost even more, at a time when the state will likely be looking to keep costs down, said Jeremy Rosen, director of economic justice at the Shriver Center on Poverty Law. But most crucially, Illinois could be on the hook for an additional annual $700 million bill to pay for some of the benefits, according to the governor's office, though that contribution could be eliminated if the state manages to bring down a measure known as the payment error rate. The combination of costs and new requirements puts the state in 'a terrible position,' said Alicia Huguelet, a senior fellow at the CBPP who previously worked as a program administrator at IDHS. As one of several factors that experts use to gauge the success of a state's SNAP program, the payment error rate isn't a measure of fraud, but rather overpayments or underpayments commonly resulting from mistakes by applicants, staff or computer systems. Illinois' error rate is among the 15 worst in the nation, though Pritzker has defended it as comparable to other large states. 'We are working very hard to make sure that we've got a process for determining the eligibility of people, making sure we hit the error rate that we need to as best we can, and we're working very hard every single day to effectuate that, but it's going to take money to do that,' Pritzker said Wednesday, noting to reporters at an unrelated news conference in Springfield that the new requirements do not come with funds for implementation. Efforts to lower the payment error rate can result in people being removed from the food assistance program, Rosen and other experts said — an outcome the state says it's trying to avoid. Still, starting in October, the state said it will be in a yearlong sprint to bring down the error rate measure ahead of cost-sharing measures that go into place after the year is up. If the rate comes down below 6% — from more than 11% currently — by fall 2026, then Illinois could avoid the more than $700 million burden, which would take effect starting in fall 2027. The state has said it can't cover that expected contribution, which is close to the looming transit fiscal cliff or the entire amount by which Illinois increased its operating revenue for the current fiscal year. To bring down the rate, IDHS is using an existing contract with Deloitte to diagnose exactly where those mistakes happen and what changes could be made to the program, according to the governor's office, which did not provide an estimated timeline on those efforts. IDHS is also reviewing its own policies to see how it could reduce the error rate, according to the state. Close to half of the payment errors in Illinois come from inaccurate wage and benefits data, including errors in what people report as their income, the state said. As a result, the governor's office said Illinois is exploring whether it could implement more stringent verifications in some areas, rather than relying on self-reporting, which is typically faster. But trying to bring down the error rate while also needing to implement new work requirements poses a major challenge, experts and the state said. 'If the application process is more stringent … it will be definitely a challenge,' said the Rev. Gary Gaston, CEO at Lessie Bates Davis Neighborhood House, a social services organization that Pritzker visited earlier this summer to highlight the challenges to SNAP. 'People have gotten acclimated to the current process. Any new processes that will be put in place could be challenging.' In the East St. Louis area where Gaston works, people might have difficulty finding work to meet the new requirements, and in some cases also face a lack of transportation options to make appointments, he said. On top of that, the area is already considered a food desert, with no major grocery store in the city — 'a double whammy,' he said. Demanding more information and verification up front can make it harder for people to access benefits, which is likely to result in some people losing benefits, Rosen at the Shriver Center said. The Pritzker administration, for its part, argues that the loss of benefits that could come from efforts to reduce the error rate is an intentional move by the Trump administration to reduce benefits and, in turn, lower the cost of the program to the federal government. Still, the state said it's working to reduce the rate in a way that keeps as many people as possible from losing benefits, as lowering the measure is the only way to avoid the massive potential $700 million bill. 'We want to make sure that we're actually delivering to the maximum number of people that need SNAP,' Pritzker told reporters Wednesday at the state fair, emphasizing that both underpayments and overpayments are considered errors. 'Republicans don't care that we're under-providing. They just want to cut everybody off of SNAP, and that is why they've set this SNAP error rate so low.' Haywood Talcove, CEO for government at LexisNexis Risk Solutions, said he wants to see Illinois and other states simplify their application process for benefits — in an effort to both reduce fraud and improve the experience for people who need benefits — from lengthy paperwork with many self-reported boxes to basic identification information and verification. Republicans have cited fraud and waste as reasons to crack down on parts of the benefits program, and Talcove, who is based in Washington, testified at a Republican-led congressional hearing this year about benefits fraud. If states are pouring millions into benefits and changes to the program, Talcove said, 'I'd like you to fix it, please.' The governor's office has noted that SNAP fraud is not the same as the error rate and that any fraud comes out of $4.7 billion in SNAP benefits that the state issues each year. Statewide, Illinois found about 0.07% of SNAP cases had an intentional program violation, which would have resulted in an IDHS penalty and potentially a court penalty, according to the governor's office. Additionally, there were more than 23,000 claims that benefits were stolen from recipients last year and an estimated $12.5 million in that type of fraud, according to a report from IDHS to the General Assembly. Rosen of the Shriver Center said the state should aim to get the information it needs, 'without being in a world where we make people bring so much stuff so often that they fall off the program.' 'Because inevitably somebody's kid gets sick, so they miss the appointment, and they can't take the three-hour bus ride to get to the office, the website doesn't work and they can't upload something. Those are not good reasons for people to be cut off who are eligible,' he said. In six years at the food bank and more than two decades working in social services, Montes said SNAP has felt 'stable, as far as the rules are concerned.' Now, even the work requirements by themselves are 'going to isolate many people from food, from accessing food, just that alone,' she said. 'Personally, it scares me.'
The Hill
20 minutes ago
- The Hill
Trump tariffs: A grocery shopper's guide
President Trump's tariffs could raise the cost of some of the most popular imports in American grocery aisles, from coffee and olive oil to wine, matcha and spices. After the 'Liberation Day' tariffs kicked in worldwide in early August, businesses and consumers alike are watching closely for when — and how much — prices tick up. Inflation data released Tuesday did not show an overall increase in food prices, but economists say that's likely to change as businesses pass more costs on to consumers. Wholesale prices surged 0.9 percent last month, the biggest monthly jump since June 2022 and a sign that inflation may not be cooling off just yet. 'Many of us anticipated ahead of time that you might see some faster movement in groceries, partly because you can't stockpile stuff right in the same way,' said Martha Gimbel, the Budget Lab at Yale's executive director. 'You can't stockpile a year's worth of avocados. That being said, the price increases that we've seen in food so far are pretty muted, so we'll just have to see what happens,' she said. Here are six iconic imported grocery products that could be impacted by Trump's tariffs. Coffee Coffee prices were already up before a 50 percent tariff on Brazil, the top coffee importer to the U.S., went into effect last week. Coffee prices sharply rose 25 percent over the past three months, according to inflation data released Tuesday. Reuters reported Tuesday that Brazilian coffee exports have started seeing postponements to their U.S. shipments. How hard your morning habit gets hit varies between brand, shop and choice of bean. Nespresso pods, for instance, are entirely produced in Switzerland, which is subject to a 40 percent tariff. Colombia, the second-largest importer of coffee to the U.S., only pays Trump's 10 percent baseline duty. 'Some importers might shift sourcing toward countries with exemptions, but in many cases the increased costs will all be passed on to you, the coffee lover,' Todd Carmichael, the co-founder of La Colombe, wrote in The Washington Post earlier this week. 'Surely, coffee is too essential and too global to put at the center of a geopolitical chess match.' Rep. Ro Khanna (D-Calif.) said Wednesday he would introduce a bill with bipartisan support to repeal tariffs on coffee. Olive oil Trump's tariffs have only added to the uncertainty facing olive oil producers, who are grappling with climate shocks. Extended droughts in Spain in 2022 slashed production, and other top production regions like Sicily and Greece have also confronted record-high temperatures. Allen Dushi, a co-founder of olive oil brand Graza, said the company has held off on increasing prices, adding that any uptick in import costs could take at least three to four months to reflect on grocery shelves. Many retailers or distributors require 60 to 90 days notice for a change, he said. The company uses Spanish olives, and production and bottling are all based in Spain. That limits the extent to which the company can keep stocks in the U.S., which would have to be finished bottles. 'We are not trying to stockpile inventory, because our priority number one is always the quality of what's inside the bottle,' Dushi said. 'That's not something we really compromise on.' Switching to American production wouldn't help, Dushi added; the company would still have to pay tariffs on Spanish olives, as American olive production doesn't meet the same standard. 'So as long as you're buying the oil, and importing the oil, you're going to be paying the tariff on that,' he said. Spain and Italy accounted for two-thirds of U.S. olive oil imports in 2024. Both are subject to the 15 percent tariff under the trade deal struck between the European Union and the U.S. in July. Other top producers are still subject to tariffs, such as Tunisia (25 percent), Turkey (15 percent) and Argentina (10 percent). Wine The July U.S.-E.U. trade deal was seen as a starting point. As negotiations have continued, the beverage industry and European officials have pushed for an exemption for wine and spirits, The Wall Street Journal reported. A group of nearly 60 associations representing wine, beer and liquor interests warned last week that the industry could face nearly $2 billion in lost sales and have to cut more than 25,000 jobs in the U.S. as a result of the tariff. The coalition, Toasts not Tariffs, pointed to products like cognac that have to be produced in a specific region and cannot be switched to a tariff-free alternative. Eric Foret is a wine buyer at Le French Wine Club, which operates several locations in New York City and Washington, D.C., alongside an online shop. He said that he had to increase his prices, although they were fairly gradual. 'It's a dollar here, a dollar there, a dollar here, a dollar there and then at the end, you spend ten dollars more on the bottle of wine, you don't even notice it,' he said. In addition to France, which accounted for more than one-third of U.S. wine imports last year, the EU tariff impacts shipments from Italy (33 percent of imports) and Spain (6 percent). Matcha A 15 percent tariff on Japan could impact the price of a matcha latte — already a pricey product before tax, tip and oat milk. While U.S. trade data does not specifically track matcha, Japan generally accounts for about half of American green tea imports by value each year, and Japanese origin is a selling point for many specialty matcha shops. The industry is also grappling with the impacts of record heat waves in Japan last summer that curbed harvests of tencha, the tea leaves dried and ground into matcha. Demand for the vibrant green beverage has also soared in recent years, driven by young enthusiasts and social media. David Cooper runs Spot of Tea, a Washington, D.C.-based shop with three locations selling matcha and other tea drinks. He considers himself lucky to have bought his 2025 stockpile before the tariffs and shortages hit. Now, however, 'we're looking at how much stock we have in our warehouse and then how much we're going through per month and doing the math and trying to push the suppliers to finalize the order as quickly as possible,' he said. 'It's definitely a little anxiety-inducing.' The uncertainty for the drink industry even extends to things like cups, Cooper said, which his shop sources from South Korea. 'I think on the day I was about to put the deposit down, Trump announced 25 percent tariffs for Korea. And so our supplier was basically, like, we cannot absorb all this cost,' he said. 'It's just so hard to tell at this point what percentage tariff is actually going to be applied.' Chocolate Switzerland, home to many famous chocolate brands, is facing a 39 percent duty, one of the highest in the world. Some of the country's larger manufacturers will be able to escape some tariff impacts because they already have production sites in the U.S. Lindt & Sprüngli, for example, produces the 'vast majority' of its products for the American market in New Hampshire, a company spokesperson said. That plant will still have to factor in tariff effects on raw materials like cocoa, imported from countries like Ivory Coast, Ecuador, Indonesia and Malaysia. Other companies, however, have made their brand on manufacturing in Switzerland. That's the case for Läderach, which is now figuring out how to manage 'massive additional costs,' its CEO said this week. 'I cannot change the tariffs. It is only human to get angry about them, enquire on who's guilt they are or be discouraged,' Johannes Läderach wrote in a LinkedIn post. 'But none of these options change anything, so I better pray for serenity to accept it.' Swiss leaders have attempted to negotiate with Washington on the tariff, which also impacts cheese and other exports. Swiss officials are now reportedly weighing whether to cancel an order for American F-35 fighter jets. Spices Trump shocked many observers by raising tariffs on India to 50 percent last week, citing its purchase of Russian oil. India is the top U.S. importer for spices like nutmeg, cardamom, anise, fennel, coriander, and cumin. Indonesia, another key producer, is subject to a 19 percent duty after negotiating with the White House. The American Spice Trade Association said in a Tuesday letter to Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer that many of its products could not be cultivated in the U.S.. 'The importation of spices directly supports approximately 50,000 U.S. jobs across processing, quality assurance, distribution, and product development,' the association said. Spice producer McCormick said in late June that tariffs could cost it as much as $90 million a year and that it was planning to raise some prices by the end of the year.
