‘We can't eat 30% of the cost.' Price hikes from Trump's tariffs are coming for back-to-school and holiday shopping.
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Jimenez wouldn't say how many pairs she sold, only that it was fewer than last year.
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'I've never raised my price, so it was really hard on me because I know they don't have to buy my socks. They can literally go to Target and buy $3 socks,' said Jimenez, who predominantly sells to Catholic school students and has eaten most of the tariff increase. 'It was just because of a horrible decision by our government, and that is making it so hard for us.'
Consumers around the country are starting to face a similar tariff reckoning
while business owners wrestle with the same disheartening decision: whether to raise prices, and by how much, or delay inventory heading into the back-to-school and holiday shopping seasons.
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A promotional photo for Scholar Sox, which contributes a portion of each sale to scholarships.
Scholar Sox
Most imports must be ordered months in advance because of lengthy shipping times. That has led to a delayed reaction to
The April 9 pause was set to expire on Wednesday, but
'A lot of folks took the opportunity to frontload and bring product in to kind of stock up before tariffs were put in place, and a lot of that inventory is starting to run out or has run out,' said Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation trade group. 'As that stock gets replenished, that new inventory is coming in and has that tariff rate tied to it. So that's when you'll start to see some of those price increases.'
Trump has falsely claimed that exporting countries pay the tariffs when they are actually paid by US importers when the goods arrive here. He has also asserted any costs will not be passed on to US customers. In May,
'The administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on access to the American economy, the world's biggest and best consumer market,' White House spokesperson Kush Desai said in a statement. He cited a
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But the Federal Reserve and many economists are forecasting an acceleration in inflation in the second half of the year as tariff-related price hikes begin taking effect.
'It takes some time for tariffs to work their way through the chain of distribution to the end consumer,' Federal Reserve Chair Jerome Powell said in June. 'We're beginning to see some effects, and we do expect to see more of them over coming months.'
Spencer Murdock poured cumin into a grinder, nicknamed 'Bertha,' at the Curio Spice Co. factory in Winchester.
Craig F. Walker/Globe Staff
The
Still, even after moving up purchases, Curio Spice doesn't have enough on hand at its factory in Winchester to make it through the rest of the year. That includes the crucial October-through- December holiday season when Curio Spice also has a pop-up shop at the
The spices it's ordered since then could be hit by higher tariffs that kick in before the shipments arrive.
'We're trying really hard not to raise prices,' Olivari said. 'Our products are already not the most inexpensive products in the world, and we want to be able to continue to support those farmers in that manner.'
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So Curio Spice is looking at a combination of some price increases and reduced inventory the rest of the this year.
'If we run out of something, my hope is that people can understand,' said Claire Cheney, the company's founder and the 'blender-in-chief.' She also will suggest substitutes, such as allspice berries or clove buds instead of bay leaves, to try to keep customers.
'I don't think we're going to go out of business,' Cheney said. 'But it will severely impact our growth and our opportunity to introduce new products and to develop new blends.'
Claire Cheney, founder and blender-in-chief at the Curio Spice Co. factory in Winchester.
Craig F. Walker/Globe Staff
Jim Rooney, chief executive of the Greater Boston Chamber of Commerce, said the tariff uncertainty is adding up to a lost year for many businesses when it comes to expanding or hiring. He noted that toymaker
'There's an expectation, maybe grounded in hope, that . . . six months, a year from now, this will all be over,' Rooney said of the tariffs. 'But there's no guarantee of that.'
Trump has said the tariffs are partly designed to lure more manufacturing back to the United States. But some products just can't be made here. Shortly after Jimenez started her company 11 years ago, she looked into producing her socks in the United States. But it was much more expensive given the handiwork and she would have had to charge nearly triple the price.
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President Trump announced new tariffs in April.
Mark Schiefelbein/Associated Press
George White, chief executive of
'They're all handmade. It's super labor intensive,' he said. 'There's nowhere else to make them in the world.'
The company does about a quarter of its business during the holiday shopping season and placed its order in May, not knowing what the tariffs on China ultimately would be. In early May,
'We are assuming that we're going to have a 30 percent tariff when it comes in,' White said. But given Trump's continual shifts, the actual tariffs when the products arrive between mid-August and mid-October are anyone's guess.
Given
the weekslong overseas shipping times, the tariffs can be dramatically different when the products arrive compared to when they were ordered.
Containers and cargo ships at the Port of Ningbo-Zhoushan in Ningbo, in China's eastern Zhejiang Province.
HECTOR RETAMAL/AFP via Getty Images
Then it's up to US business to decide how much of that cost to pass on to customers. White said he's boosting prices about 10 percent — assuming the 30 percent tariff.
'We can't eat 30 percent of the cost,' he said.
Neither can Jenn Luna, owner of
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Manufacturers are eating some of the cost, but Luna said she's still looking at increasing her prices by 7 percent to 10 percent. And all of that could change if Trump revises the tariffs again.
'Stuff that's on the water now, when it arrives, maybe it's going to be 100 percent, maybe it'll be zero,' Luna said. 'Nobody really knows. So we're all just doing the best we can.'
Jim Puzzanghera can be reached at
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