Bay Area small businesses on edge as tariff uncertainty lingers
Bay Area small businesses brace for potential impact of tariffs amid uncertainty
Bay Area small business owners are concerned about the potential impact of tariffs on products imported from Canada and Mexico, which could lead to higher prices for everyday goods. While a temporary pause offers some relief, businesses like the Demented Sisters are worried about the long-term effects if the tariffs are enforced.
LIVERMORE, Calif. - Days after announcing stiff tariffs on imports from Canada and Mexico, President Trump agreed to delay them for a month, following announcements to ramp up security at national borders.
Had the tariffs gone into effect on Mexico and Canada, they could have impacted a wide range of goods, from avocados to alcohol to new cars. While there is now a pause, small business owners say they are still poised to take big hits.
Sisters Beth Vasquez and Jenna Haydon founded a Livermore-based vegan, cruelty-free, and organic beauty line called Demented Sisters Beauty. All of their products are formulated in Canada and sold online.
"We really believe in clean products, and our manufacturer in Canada has an amazing selection of products that we’ve been able to brand and customize. We’re just really concerned if we don’t use this manufacturer, we will need to use an American manufacturer that might not be able to enable us to provide the products we want at the price point that we want," said Vasquez.
President Trump agreed to a 30-day pause on his tariff threats against Mexico and Canada on Monday.
Canadian Prime Minister Justin Trudeau also announced on social media that Canada would have a 30-day mutual pause in tariffs.
He said Canada would commit to appointing a fentanyl czar and launch a joint strike force with the U.S. to combat organized crime and money laundering.
Mexican President Claudia Sheinbaum agreed to send 10,000 members of the Mexican National Guard to address drug trafficking. She also said the United States made a commitment to stop the trafficking of high-powered weapons into Mexico.
Now, only China still faces a 10-percent tariff as of Tuesday.
Meanwhile, the economic uncertainty is forcing the Demented Sisters to take a pause as well.
"It’s frustrating. I would say that we’ve done so much ourselves - our website, advertising, we did the logo ourselves, and we just invested in doing rebranding. Just about to launch with the rebrand, we’re having to really take a step back," said Vasquez.
The Demented Sisters, who operate on very thin profit margins, said if the tariffs do go through, lipstick prices would increase from $18 to $24, and foundations would jump to $40 and above.
"I think the 30-day cooling-off period is going to give Mexico and Canada a chance to prove that they are doing what they have apparently pledged to do in connection with our national borders. So, they’ve got some time to actually show some good faith, and presumably, we’d return that good faith. But the clock is ticking. Thirty days is not a very long time," said UC Berkeley professor of economics Jim Wilcox.
Before the pause, Trudeau said Canada would take retaliatory action by issuing its own 25-percent tariffs on U.S. goods, including beverages, cosmetics, and paper products.
The Demented Sisters are not ruling out closing up shop, if the tariffs are renewed.
"This brought me joy. It brings me joy. It’s a way for me to use my entrepreneurial spirit with my sister, my best friend… I will lose my joy, and I’ll have to start over," said Haydon.
President Trump is eyeing tariffs on the European Union next. He mentioned that the U.K. could be in line as well, but signaled that a deal could still be worked out with Britain.
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