As a member of the Senate Small Business and Entrepreneurship Committee, Senator Chris Coons is concerned about the impact that tariffs on goods from China are having on the U.S. economy.
And that’s why the Delaware Democrat visited Carltons Men’s and Women’s Apparel in Rehoboth Beach, Del., last week for a store tour arranged by NRF and hosted by co-owner and President Trey Kraus. The tour included a discussion with owners of half a dozen local businesses, all of whom had stories of how they have been affected by the tariffs or expect to be as new rounds take effect.
“I’m principally concerned about how (tariffs) will impact sales and profitability and inventory for small businesses,” Coons said. “I’m concerned about the lack of a clear strategy, a path forward, an off-ramp. How much longer will this tariff standoff with China last and what will the consequences be for small businesses and for their employment and sustainability?”
“My hope is that the Trump administration, President Trump in particular, will pay attention to voices from all over our country, from farmers to manufacturers to retailers.”
“My hope is that the Trump administration, President Trump in particular, will pay attention to voices from all over our country, from farmers to manufacturers to retailers like the ones I’m hearing from today,” Coons said. “His tariffs that he’s imposing in this trade war with China are having a real and significant impact on our economy and small businesses.”
Tariffs of 25 percent on $250 billion worth of Chinese imports imposed over the past year do not directly affect the suits, dresses and other apparel sold by Carlton’s and other retailers. But apparel and a wide range of other consumer products will be hit by 10 percent tariffs set to take effect September 1 and another round that will take effect December 15. Those two rounds of tariffs will cover about $300 billion worth of goods and bring virtually all remaining items from China under an import tax.
“I want the president to understand that the tariffs are being paid for by the American people,” Kraus said. “All the hard-working people in America are footing the tariff bill and it’s coming out of our pockets and it’s coming out of our business revenues.”
Coons agreed, saying “despite what some people say” tariffs “are not paid by the Chinese.”
Kraus said he has no control over where the products he sells are made because he buys from apparel brands and that they make the sourcing decisions — which for most of his apparel means China. While some brands are trying to move sourcing elsewhere, doing so is difficult and cannot be done quickly, he said. “Made in America” products can also be affected — one brand of jeans he sells is made in Los Angeles but uses fabric imported from China.
Even though apparel tariffs have not yet taken effect, Kraus said some suppliers have increased prices already. In one example, high-end men’s shirts that previously sold for $100 have been moved up to $150 by the manufacturer. That means he will typically stock four of each rather than six, knowing that fewer will sell, reducing both his gross sales and profits.
NRF’s Store Tour program connects members of Congress with retailers to learn how retail powers the economy and creates jobs in the states and districts they represent.
“I’m seeing pretty much everything go up and it’s going to challenge jobs and the number of hours my employees work,” said Kraus, whose 7,000-square-foot, 11-worker family business was founded in 1960 by a previous owner. “If I don’t have enough people to run my business, then I’m going to have to think about moving or closing.”
Kraus is an active and engaged retail advocate who testified at a hearing on tariffs held by the Office of the U.S. Trade Representative in Washington in June. He told officials that the latest tariffs “will have a profound and punitive effect on everyone in our local economic community.”
Susan Kehoe, managing partner of Rehoboth’s Browsabout Books, was one of the participants in the discussion with Coons, and welcomed the attention from a member of Congress.
“It’s invaluable to have that face-to-face with people,” she said. “It’s important for officials to see we’re real people with real businesses.”
