Small business owners in Des Moines express uncertainty regarding the future following a tumultuous start to 2024. Tariffs are likely to induce shifts throughout the supply chain, raising questions about the potential impacts on businesses.
President-elect Donald Trump has declared his plan to implement a 25% tariff on imports from Canada and Mexico, alongside a further 10% tariff on goods from China. Retailers are facing elevated shipping costs, and small business owners report that they are unable to absorb the additional burden of tariff costs without transferring those expenses to their customers.
The cost in the local area
Cindy Boeyink, owner of Sassy’s Boutique in West Des Moines, reported that she has been compelled to invest her personal funds into the store to maintain its operations. For the first time in eight years of operation, Boeyink’s clothing shop is experiencing a slowdown in business.
Boeyink is known to import three to four clothing lines from Canada, alongside one to two lines from Mexico. Her Canada lines have emerged as the top-selling item in her collection.
“If the tariffs are passed down to us — the customers, the retailers — that would be detrimental for us and those products,” she stated.
In the wake of COVID-19, Boeyink has faced increasing shipping costs. Previously, Boeyink absorbed the costs, but she is now compelled to transfer these expenses to her customers, resulting in an increase of $2 to $5 in the price of her apparel.
Business owners in Des Moines are reporting a noticeable decline in customer attendance compared to previous times.
“A significant factor appears to be the upcoming presidential election year,” Boeyink stated. “Increased discussions surrounding costs and the state of the economy are leading individuals to be more cautious with their finances than they were previously.”
The National Federation of Independent Business (NFIB) has announced that their Optimism Index has reached its highest level since June 2021. However, despite this positive development, small businesses continue to report declining profits.
Boeyink stated that business owners are willing to go to great lengths for their customers. “I hope our customers recognize this, and I am confident they do.” Once more, if they fail to provide their support, we will depart.
The cost at the national level
The existing tariffs impact a range of Chinese imports, including steel, aluminum, batteries, washing machines, and various other products from China. According to the Tax Foundation, U.S. households are facing an annual increase of $200 to $300 to cover the rising costs.
Should Trump implement new tariffs upon taking office, the impact will extend to a significantly larger portion of the market. A rise in smartphone prices is anticipated, alongside an expected increase in the cost of fresh fruit and vegetables. Clothing and footwear prices are anticipated to rise as well. Economists project that annual household expenses could climb to $830.
Tariffs encourage consumers to purchase domestically produced goods; however, the availability of certain raw materials locally remains a challenge. In 2021, aluminum emerged as one of Iowa’s leading imports, with a valuation exceeding $1 billion. Iowa’s imports included $5.8 billion in industrial machinery, $2.5 billion in motor vehicles and parts, and $1.9 billion in electrical machinery.
Iowa’s import statistics reveal that Canada and Mexico were the top sources of goods, accounting for approximately 13% and 9% of total imports, respectively.
