President Trump has threatened new tariffs on imports from Mexico and Canada starting tomorrow, but the administration says the plans are “fluid.” That’s a headache for businesses as they try to prepare.
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President Trump said this afternoon that steep tariffs will take effect tomorrow on imports from Canada and Mexico. Trump declared there’s no room left for an 11th-hour deal like the one he made a month ago to postpone the tariffs. That announcement sent the stock market tumbling, with the Dow Jones Industrial Average falling nearly 650 points. NPR’s Scott Horsley spoke with one business owner who’s been wrestling with tariff whiplash.
SCOTT HORSLEY, BYLINE: Randy Carr runs a company based in Florida that makes embroidered patches – the kind you might see on a delivery person’s uniform or a baseball cap.
RANDY CARR: Customers range from Little League and junior league sports, the military, workwear, like UPS and FedEx drivers, to promotional products.
HORSLEY: Carr has factories in Texas and Georgia to allow for speedy delivery. But 20 years ago, he opened a plant in Mexico, where most of the labor-intensive work is done. Since then, the company has grown on both sides of the border.
CARR: We now have 500 people in the States and 880 in Mexico. So by moving to Mexico, we were able to grow that much more in the States also.
HORSLEY: Now that growth is facing a serious challenge. President Trump has ordered a 25% tariff on all imports from Mexico. I asked Carr if he’ll try to pass the cost of that import tax onto his customers by raising prices.
CARR: The easy answer is yes, but that doesn’t mean that people are going to take the tariff and pay the bill. So the long and short of it is probably what’s going to happen is that it’ll be a mixed bag.
HORSLEY: Some of the import tax will be passed along to customers, but some will come out of Carr’s own budget. As a result, he’s postponed a planned investment in new equipment for the Texas and Georgia factories, which would’ve allowed for more domestic manufacturing.
CARR: Once I get a clearer picture of what’s going to happen with the tariffs, then we’ll reassess where we go with that. But everything’s been shelved for now.
HORSLEY: A lot of factories are in similar limbo. One manufacturing manager surveyed by the Institute for Supply Management likened forecasting in this environment to a wild guess. Another warned that customers are pausing orders because of uncertainty over the looming import taxes. Trump has also threatened to impose tariffs on imported steel, aluminum and a wide variety of other products. Christine McDaniel, who tracks trade policy at the Mercatus Center says up until today, financial markets were betting that Trump would use those tariffs as a bargaining chip to extract other concessions and that most of the import taxes would not actually take effect.
CHRISTINE MCDANIEL: So far, the markets have not seemed to be freaked out by this. They’re looking and they’re saying Trump is making deals, and that’s going to be great until it no longer is the case.
HORSLEY: Randy Carr is not taking any chances. Because of rising costs in Mexico, he was already scouting a new factory location in the Dominican Republic. He says Trump’s tariff threat just accelerated that move.
CARR: That was a kick for us to say, all right, like, we need to deal with this now. We can’t wait. Regardless of whether it happens in a month from now or not, we are not going to sit and be a victim of this. So that’s the move.
HORSLEY: The new factory should be up and running by November. Carr knows Trump could slap tariffs on imports from the Dominican Republic as well. But for now, he’s hoping that country’s small enough to avoid becoming a target. Like any business person, Carr says he’s used to adjusting to changing circumstances, but ever since Trump returned to the White House, the changes have been dizzying. The tariff threat against Mexican imports was on one day, off the next, then on again within the space of 48 hours.
CARR: We’re planning like it’s going to happen. The issue is, while we’re planning like it’s going to happen, we’re not running the business. We’re not taking care of our customers. I’m not taking care of my employees. I’m taking care of a what-if scenario on tariffs.
HORSLEY: And that whiplash of what ifs shows no signs of easing. Scott Horsley, NPR News, Washington.
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