WILMINGTON — When Leonard Simon first heard the news that the 25% tariffs President Donald Trump was planning to impose on Canada and Mexico got postponed yet another month, he was so relieved that he felt he could hug the next person who walked into his store.
Wright & Simon is known for its custom-fitted suits for the sharp-dressed clientele that come to downtown Wilmington. Part of what makes the small business what it is today is the quality of the fabrics that are imported from Quebec.
“The French Canadians turn out a good product and I’ve been dealing with the companies there for years, because they buy their pieces from fine Italian mills,” Simon said. “It’s the construction of the clothing that’s so high grade that we can alter it. The cheap clothing that’s around today and sold in big box stores, it sells because it’s cheap. But if someone wants a good product, you have to pay.”
And those costs will rise if the president follows through on the tariffs. Simon said that he’s fortunate that his suppliers have offered to split the cost, so that Simon would have to cover 12% of the increased cost of goods.
“The tariffs would have a very negative effect on me,” he said. “Actually, for the psyche of the consumer, even if they can afford it, they could be more hesitant to go out and spend money in the first place now.”
Simon is one of millions of small businesses that are still uncertain of which direction to head in, as Trump continues ahead on his plan for tariffs on much of the imported goods in America, and even changing direction as the president forges ahead with negotiations. Earlier this week, Trump announced he was prepared to sign more tariffs on April 2 but he was likely to offer breaks.
Recent reports indicate the White House is planning to target the 15% of countries with a trade balance unfavorable to the United States.
For Ivan Barrios, the president and CEO of the World Trade Center Miami, the unpredictability is making it harder for small businesses to plan and in turn making a nervous atmosphere when it comes to doing business. He is also the chair of the World Trade Centers Association’s North America Regional Advisory Council and he said he was mostly surprised that the Trump administration moved so fast.
“What we’re hearing is that some companies are very worried. Most of our members are small companies, between 10 to 30 employees. It hits especially hard when you have to lay off people,” Barrios told DBT.
The WTCA North America Regional Advisory Council is set to have a meeting in April, where it’s likely they will coordinate dissemination of information across all stakeholders, including the local World Trade Centers. Until then, it’s the same story as it has been since late January: wait and see.
“Things are changing so fast, and everybody’s just sitting back and watching to see what happens. There could be exemptions like cars. It’s just minute by minute,” he said.
Major financial firms are also watching various sources of data like the consumer price index, unemployment, consumer sentiment, the producer price index and profit margins of large corporations as a temperature check of the environment. JPMorgan Chase & Co. Managing Director of the New Jersey Markets Alma DeMetropolis said that the market is still trying to project what the final tariffs imposed would be.
“Tariffs are a negotiating tool, depending on what the Trump administration would like to happen. It’s still unclear what sectors they are targeting,” DeMetropolis said. “It’s going to be interesting to see how the health care industry is impacted, as pharmacy prices get discussed, and it’s likely agriculture and the ports are going to see some level of impact.”
“I think there’s a lot of emotion at this moment,” she added. “Everyone is talking about it and trying to navigate it. It’s changing at this very moment, so it makes it hard to assess the true impact.”
Here in Delaware, local organizations like the Delaware State Chamber of Commerce are trying to keep on top of the dizzying new changes and what the impact could be for smaller businesses. The major snag is where companies require parts that may need to cross the border multiple times before it reaches its final destination and that can range from fabrics, car parts, motherboards for computer repair shops and more.
Mike Quaranta, president of the DSCC, said that he’s heard members start quickly building up a stockpile for raw materials but that most were still trying to assess what the exact impact would be.
“I’m not sure every manufacturer, especially those that source from contractors, have the idea of where those materials are sourced. So, I believe with the passage of time, the total impact will actually be revealed,” he said.
