St. Louis-area business owners who rely on imported goods are trying to adapt to President Donald Trump’s tariffs but worry they will have detrimental effects on the businesses and customers.
Trump announced a 10% baseline tariff on imported goods plus reciprocal tariffs for countries around the globe. Restaurant and grocery store owners warn that this will lead to more expensive food. But other industries will also feel the pain, including the bicycle industry.
“I don't think manufacturers and our brands are going to be marking up the tariff, but they're definitely going to be passing on the tariff to us,” Big Shark Bicycle Company owner Michael Weiss said.
Weiss expects midrange products to cost more. He said his store is already seeing the effects, including a canceled sale from a person who was going to build his own bike.
“The bike [was] going to be $15,000,” Weiss said. “So add overnight an 80% tariff. He just called and said: ‘Cancel the order. I'm not going to spend $23,000 on a $15,000 bike.'”
Trump argued the tariffs will strengthen U.S. manufacturing by bringing jobs back.
Weiss said bikes are complicated to make, with hundreds of parts that come from countries across the world.
The tariffs come at a difficult time for the bicycle industry. Bike manufacturers were hit with tariffs during Trump’s first term, leading to higher prices. The industry has also taken a financial hit over the past few years following a surge in demand at the beginning of the coronavirus pandemic that led to an increase in manufacturing and then a surplus of bikes as that interest waned.
Weiss said manufacturers have had little cash flow over the past couple of years but had been hoping to see a return to pre-COVID sales this summer. With the recent tariffs, those sales are uncertain. Weiss hopes there will still be demand as summer approaches.
Another group anticipating feeling the hurt from tariffs are board game manufacturers. The industry also saw a boom during the early days of the pandemic but is now facing similar financial challenges.
St. Louis-based board game company Stonemaier Games works with a Canadian company whose main factory is in China. Trump announced a 54% tariff on Chinese imports last week.
Those tariffs will increase the production costs for a game that costs $10 to make, Stonemaier Games co-founder Jamey Stegmaier said.
“The manufacturing costs went from $10 to effectively $15, and that has broad repercussions,” Stegmaier said. “Even at its baseline, that is just a huge increase in costs that we now have to deal with.”
Stegmaier said the company is still determining how it will adapt. Depending on how long the tariffs last, they could lead to an increase in costs for consumers. That can lead to price hikes when the company is selling the games to retailers and distributors, Stegmaier said.
“Oftentimes, there is kind of a multiplier that goes up the chain from the amount that we charge to a distributor to the amount that a distributor charges to a retailer, and then finally, the cost that the retailer charges to a customer,” Stegmaier said. “And so for that $5 increase in cost due to the tariff, the increase in cost to a customer could increase by as much as $25.”
The game manufacturer is trying to find ways to mitigate the increase, Stegmaier said. About 65% of its sales last year were in the U.S. The other 35% were shipped from China to other countries. Stegmaier said the U.S. tariffs won’t have an impact on those prices, at least in the short term.
Stegmaier said the company intends to increase sales from China to other countries as it anticipates a decrease in U.S. sales due to higher prices. He said while they are looking into U.S. manufacturers to help build components, many can’t operate at the scale the game company needs, are more costly or don’t make some of the special components for their games.
Stegmaier said he wants people to understand how the tariffs could hurt local workers.
“While I appreciate that people want more manufacturing in the U.S, I just think there's so many other people that are involved in it,” Stegmaier said. “If that is something that someone is really, really passionate about, I also hope that they have empathy for the other people in that process, including my seven co-workers, that will be negatively impacted by these tariffs.”
