Southwest Georgia businesses try to make sense of tariff changes

Yahoo

06-05-2025

ALBANY – Georgia businesses are preparing for higher prices and less competitive market products as the countdown to the Trump administration's 'reciprocal tariffs' ticks on.
The state's railroads and highways, shipping containers and tractor trailers spent April trucking along, carrying a surplus of goods to meet the needs of inventory stockpiling amid the ongoing trade war. The U.S. is nearing the halfway point of a 90-day pause on hefty 'reciprocal tariffs' announced by President Trump on April 2. China was exempt from that pause, with Trump placing tariffs as high as 145% on Chinese goods. China fired back with a 125% tax on U.S. goods, but began evaluating trade negotiations with the U.S. at the start of May.
Chris Clark, the Georgia Chamber of Commerce CEO, said the Chamber is seeing impacts on every sector in the state, from agriculture to film to small businesses, especially those retailers who get their supplies from Chinese distributors.
In a mid-April report, the Georgia chamber listed recommendations for manufacturing, retail, agribusiness, the technology sector, and logistics and distribution. Some of these recommendations included using Georgia foreign trade zones, using Georgia ports, using technologies like AI to lessen supply chains for larger employees as well as stockpiling goods while prices are still down.
'No, 90 days is not enough time to insulate,' Clark said during an April 16 briefing. 'I think businesses need to be smart. If you can do just-in-time ordering, do it. If you can develop new domestic suppliers, do it.'
The chamber CEO acknowledged that small businesses don't have the same resources to do this.
'We're suggesting that they go ahead and talk to their banks, develop a plan, and then try to secure additional capital so that they can stockpile or they can absorb some of the costs that they are considering passing on to consumers,' he said.
Clark said it's a confusing time for everyone. He encouraged Georgian business owners to reach out to the chamber and their Congressman about impacts.
'We are asking the administration and members of Congress and our global partners to work quickly to re-establish stability, to lower barriers and to make it easier for us to sell our goods and products around the world,' he said.
Industries across the country most affected are electronics, automobiles, furniture, wine and spirits, and clothing companies.
Milan Patel, a local businessman who owns Bottom's Up! Wine & Spirits Boutique, among other businesses, said he's already begun stockpiling inventory, especially on liquors imported from Mexico. This includes many popular tequila brands, like Don Julio or Jose Cuervo.
Patel said tariffs will have a downstream effect, even shifting consumer tastes.
'If tequila, let's say Patron, costs $45 and it has a 24% tariff, it's gonna be closer to $60,' he said. 'Well, people may not drink Patron anymore. So then what they do because you can't buy an American-made tequila, you then switch your taste … you'll drink a spirit that's made in this country.'
Patel, who studied economics at the University of Georgia, said the current administration is using tariffs as a negotiating tool so it can reset trade terms for the betterment of America in the long-run. Although, he said, this doesn't come without consequences and 'short-term' pain.
Construction at Patel's new Academy Sports location next to the Albany Mall has been steadily progressing, amid the panic around price increases. He said this project wasn't affected by tariffs because construction materials were purchased more than a year ago. He said construction projects that haven't taken off will most likely become more expensive.
'It's not going to stop construction,' he said. 'It's just going to be a little bit more of a Made in America construction product, and typically a Made in America construction product is a little bit more expensive.'
Jud Savelle, the president of Bishop Clean Care, a local cleaning service, said tariffs have created instability in part of his business. In 2022, his business began distributing and selling commercial robotic vacuums under the brand 'Cobotics by Bishop Clean Care.'
'We moved in this direction because of the shift in labor trends in the cleaning industry,' he wrote in an email. 'As wages rose and interest in cleaning careers declined, we saw a need for automation.'
However, Savelle said all robotic cleaning equipment is manufactured in China – good products with advanced AI systems. He said commercial robotic cleaning is still somewhat novel in the U.S., which means limited stock in this country. This makes new orders that are mostly imported, subject to any new tariff announcements at any time.
'Recent tariff announcements have created much instability in this industry, with most distributors unclear on how to quote prices for future orders,' Savelle wrote. 'Both our domestic and international partners have communicated their challenges with us, and we are all working very hard to adjust our business models to account for these wild swings.'
Savelle said local businesses will be impacted based on their product categories and industry stability. Businesses that trade in low-value products with high-frequency sales are still able to acquire inventory that's been in the U.S. and won't see price increases yet.
'I expect they will begin to see the increase by mid-summer if healthy trade deals aren't met soon,' Savelle wrote.
On the flip side, he said businesses like Bishop Clean Care, which trade in novel technologies or high-value items like equipment and vehicles, are already seeing an impact.
Tariffs make Georgia's farmers more vulnerable as well, especially top exports like poultry, cotton, peanuts and pecans.
Southwest Georgia is known as the pecan center of the world. However, pecan producers saw that title dip during trade wars between the U.S. and China in 2018 when Trump first imposed tariffs on the country. Then, the tariff was 10%, increasing to 25% by the end of 2018.
Scott Hudson, president and CFO of Hudson Pecan Company, said at the time 90% of his pecans were going into China. Tariffs meant he lost the majority of that market to South Africa, as most of his customers began replacing Georgia pecans with South African or Mexican pecans. He said it got better two years later when the South African crop was down.Pecans were one of Georgia's largest agricultural imports to China before the 2018 trade war. Staff Photo: Lucille Lannigan'We have not had the China market since 2018 unless one of our competitors didn't have a crop,' Hudson said. 'So the tariff essentially killed us then. But right now, it's essentially completely dead. We're not a market of opportunity. We're not a market of anything in the China market.'
Hudson said it was a disaster in 2018 that taught him not to 'put his pecans all in one basket.' His company has diversified across other areas to make up for the loss of the Chinese market – starting a retail market, tapping into the Middle East or Europe, and holding back as much crop as possible to sell to the end consumer in local spots like grocery stores.
Hudson said he's holding onto faith that U.S. leaders are making the best decisions for its farmers and businesses.
'Let's just hope that it's short-term pain that will help us a lot,' he said. 'We've got other markets that have charged import tariffs on American Ag products for centuries, and that's not fair. Maybe it's time we hold some of these folks accountable.'
However, pecan farmers have been on a continuous uphill battle since 2018, not only with trade wars, but with the COVID-19 pandemic and natural disasters like Hurricane Helene. During Helene, pecan farmers lost as many as 40 to 90% of their trees. Hudson said farmers are still waiting on crop and disaster payments.
'It is a tough time to be a farmer,' he said. 'We're not asking for handouts and favors. We're just asking for some help that is due us.'
Hudson said he hopes both sides of Congress can come together to address tariffs and trade deals.
'It's across multiple administrations and has not changed one single bit,' Hudson said. 'It shouldn't be a Democrat or Republican thing. It needs to be an American thing, and let's just get it figured out.'