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E-mail Xinhua, April 5, 2025
by Xinhua writer Liu Yanan
NEW YORK, April 4 (Xinhua) -- U.S. President Trump's decision to impose a 10-percent "minimum baseline tariff" and higher rates on certain trading partners is fermenting frustration among Americans and threatening consumption and small businesses, the bedrock of the U.S. economy.
Oriana Smith, who was shopping at a Lululemon store in New York on Wednesday just as Trump rolled out reciprocal tariffs, said, " I don't know if tariffs will make these products go up in price, but I really hope not. It sucks."
"I don't know why we're pissing off Canada. We're neighbors, we're allies, it's weird," added Smith, who favors Canadian fashion brands like Lululemon and Aritzia.
Jenn Garcia, a New Jersey resident who spends most of her time taking care of kids, said "I don't know much about economics, but this will make things more expensive."
Garcia said she probably would spend more money on toys and other products, which are imported.
"I don't know why the president is doing this. A lot of my stuff on eBay is also made in China. This is not a good thing for me and will hurt my work," said Garcia, who operates a business at eBay.
U.S. tariff policies also weigh on small business owners who are more vulnerable to external shocks.
Bryan Zillitto, owner of an auto spring and wheel alignment in Hackensack, New Jersey, said tariffs could affect him and his customers as a lot of components like springs and batteries are imported.
"Our customers may have to spend more money on buying a car and fixing them, and we may have to raise prices as well. Everyone spends more money. That's not good. Nobody benefits," said Zillitto on Wednesday.
"We all felt (it) was very important and necessary to talk about how disappointing it was to realize that the country as a whole was not as supportive and trustworthy as much as we had been," said Lara Kisielewska, an owner of a design company in New York.
Kisielewska said the fact is the United States has a really shaky economy due to tariffs and a lot of other economic policies.
"We're alienating the world. And as a small business owner, I'm truly worried," said Kisielewska on Tuesday.
"The biggest challenge that my small business faces this year is the uncertainty of the tariffs," said Sarah Wells, CEO and founder of Sarah Wells Bags.
The pressure on small businesses right now is significant and this emphasizes the need for small businesses to share their story and why the impact of tariffs in the future really threaten the livelihood of small businesses, said Wells on Wednesday.
"Over the last years, as tariffs increased, I've seen small business colleagues shutter their doors, and obviously, I don't want to follow the same path," said Wells at State of Retail & the Consumer 2025 hosted by the National Retail Federation (NRF).
The uncertainty channel is what's hitting businesses and consumers right now, said Sarah Wolfe, senior economist and strategist with Morgan Stanley Wealth Management.
"Even if we don't get aggressive tariff policy, consumers are concerned and are very price sensitive right now," added Wolfe.
Just the prospect that prices could go higher is going to hit consumer sentiment and spending more today than it did during the trade war in 2017 and 2018, Wolfe said at a panel discussion on the NRF event.
"I'm really concerned about tariffs and trade policy...a tariff shock would further exacerbate these inflationary pressures," echoed Gregory Daco, chief economist with EY-Parthenon, the global strategy consulting arm of Ernst & Young LLP.
As many as 50 percent of business executives would pass on two thirds of higher input costs from tariffs immediately, according to a survey by EY-Parthenon.
"There's not gonna be much of a buffer between the import prices and the consumer prices. It's going to filter relatively quickly if those tariffs do material," said Daco. Enditem
(Qin Mingwei also contributed to this story.)
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