President Donald Trump’s tariffs on China, Canada, and Mexico are presented by the president and his boosters as a boon to American businesses. If products from China are more expensive, the argument goes, then people will instead buy from counterparts based in the US.
But for small businesses manufacturing in the US, the tariffs are already causing their costs to go up — which, in turn, will force them to raise prices for consumers.
Valerie Schafer Franklin, one of the owners of Walnut Studiolo based in Oregon, says she’s already noticed a change. Schafer Franklin and her husband specialize in handmade leather goods, like bicycle grips or drawer pulls. Her husband, Geoffrey, is the designer and crafter; Schafer Franklin handles everything else.
Part of her job is keeping track of the business’s inventory and stock, ordering more components, and pricing products. The business’s primary component is leather, which the couple buys from a fifth-generation leather tannery in St. Louis, Missouri. But the handmade goods Walnut Studiolo makes require other supplies the average consumer might not think about: they need thread to stitch the leather, magnets and fasteners for game boards, and specialty screws that are hard to find.
“Our prices right now are based on whatever we purchase the components for,” Schafer Franklin says. “We don’t make up arbitrary prices based on whatever we think people would buy. We take how much it costs us to buy the things that go into it, how much time it takes us to make it, and then mark it up to cover our costs.”
So far, Trump has announced and then paused 25 percent tariffs on imports from Canada and Mexico; a 10 percent tax on products coming from China, by contrast, is in effect, though part of the executive order imposing them was put on ice temporarily. And earlier this week, Trump announced additional tariffs on imported aluminum and steel.
But the idea that only products made abroad would be affected by tariffs glosses over the truth about modern manufacturing: businesses of all sizes depend on a global, interconnected supply chain. And when one part suddenly gets more expensive, that cost drifts downstream, all the way to the person who buys the product.
After supply chain chaos during the covid-19 pandemic, the couple decided to keep more components on hand than they had before. For now, the price of their products has not gone up because the components being used were purchased earlier. But that may soon change: when Schafer Franklin was recently reordering specialty screws, she noticed her supplier had bumped up the price by 20 percent. A recent email from a magnet supplier warned of the tariffs on Chinese goods: “prices will rise, possibly sooner than expected,” the supplier wrote. “If you rely on magnets for your business or personal use, buying now is the best way to avoid increased costs.”
“I do feel pressure when [I] get those, because it’s hard enough to compete with our prices being handmade over knockoffs or whatever, that come out way cheaper,” Schafer Franklin says. “When the components go up and we have to increase our prices, that means I’m not as confident we’ll be able to sell as many, because price matters a lot.” Small businesses essentially have to read the tea leaves and decide whether to stock up on supplies now for a lower price but that they potentially won’t be able to sell.
“There are some specialty things that are only made in certain parts of the world”
Even businesses based in the US making products domestically — the type of companies the Trump administration means when they say “America first” — rely on components or products made abroad, specifically in China.
Walnut Studiolo’s travel cribbage board, for example, is made in the Oregon studio by hand. The couple wanted to include miniature playing cards with the board, but after searching high and low, Schafer Franklin says she could not find any factories in the US that made half- and quarter-sized playing cards.
“There are some specialty things that are only made in certain parts of the world, and I guess playing cards was one of these,” she says. She ended up hiring a company in China to produce the custom cards, prioritizing a manufacturer that felt as ethical and environmentally friendly as possible.
Trump’s ever-shifting tariff policies have caused confusion and stress for all types of businesses selling products online. Dropshipping forums are awash with questions about the tariffs and sellers saying prices on their products have gone up. Etsy has notified sellers that it is “continuing to monitor the situation” but has offered little guidance, Schafer Franklin says. (Etsy declined to comment for this story.)
Trump’s preoccupation with the concept of “Made in America” is marketed to the public as supporting American businesses. Will tariffs boost sales for companies like Walnut Studiolo? Schafer Franklin is not optimistic.
