What Trump’s tariffs could mean for Iowa small business owners

Some small business owners in Des Moines are uncertain about the future after an already shaky 2024. If tariffs cause changes along the supply chain, it’s difficult to anticipate just how their businesses will be affected.

President-elect Donald Trump announced his intent to impose a 25% tariff on imports from Canada and Mexico, as well as an additional 10% tariff on China. With already high shipping costs for retailers, small business owners say they cannot absorb tariff costs without passing them on to customers.

The local cost

Cindy Boeyink, the owner of Sassy’s Boutique in West Des Moines, said she has had to inject her personal money into the store to keep it afloat. In the eight years that Boeyink has been running her clothing shop, this is the first year where business is slow.

Boeyink imports three to four clothing lines from Canada, and one to two lines from Mexico. Her Canada lines are her number one bestseller.

“If the tariffs get passed down to us — the customers, the retailers — that would kind of be a killer for us and those products,” she said.

Since COVID-19, Boeyink’s had to deal with rising shipping costs. While she was able to eat the cost before, now Boeyink needs to pass the cost along to her customers, making her apparel $2-$5 more expensive.

Other Des Moines business owners have also noticed that customers haven’t been showing up as much as they used to.

“I think a lot of it has to do with a presidential election year,” Boeyink said. “The more the cost [is] talked about, and how expensive things are and what the economy is doing — it forces people to hang on to their money more so than they would have in the past.”

While the National Federation of Independent Business (NFIB) recorded their highest reading for the Optimism Index since June 2021, small businesses still report lower profits.

“I think business owners will bend over backwards for their customers,” Boeyink said. “I hope that our customers — and I know that they do — they see that, and they understand that. And again, if they don’t support us, we go away.”

The national cost

Current tariffs in place affect Chinese imports like steel, aluminum, batteries, washing machines and other Chinese products. U.S. households paid $200-$300 more annually to make up for the cost, according to the Tax Foundation.

If Trump puts new tariffs in place after he takes office, they will affect an even broader percentage of the market. Not only would a smartphone get more expensive, but the cost of fresh fruit and vegetables would increase, as well. As for clothes and shoes — they’re expected to go up, too. Economists estimate that household costs might reach $830 per year.

While tariffs incentivize consumers to buy U.S.-made goods, some raw materials are not available locally. For instance, one of Iowa’s top imports in 2021 was aluminum, valued at more than $1 billion. Iowa also imported $5.8 billion of industrial machinery, $2.5 billion of motor vehicles/parts and $1.9 billion of electrical machinery.

Iowa imported the most goods from Canada and Mexico, making up around 13% and 9% of total imports, respectively.