The Impact of Tariffs on Small Businesses: A Cookie Shop’s Story
Los Angeles-based cookie connoisseur Lara Adekoya started her baking business, Fleurs et Sel, during the pandemic, selling cookies to customers out of her home. As her business grew, she opened a bakery in L.A., offering unique flavors like oatmeal chocolate chip walnut, peanut butter and Nutella, and matcha dark chocolate. However, Adekoya’s success has been hindered by the rising costs of premium ingredients imported from countries like France and Japan, due to President Trump’s tariffs.
Adekoya now pays $50 to $100 more per bag for these ingredients, resulting in an additional $3,000 to $4,000 per month in expenses. Despite this significant increase, she has chosen not to pass on the extra cost to her customers, absorbing the entirety of it herself. This decision has forced her to delay expanding her business and limit the availability of cookies that require imported ingredients.
The Tariff Burden on Small Businesses
Two lower federal courts have ruled that the Trump administration’s “reciprocal” tariffs, ranging from 15% to 50%, are illegal. The Trump administration has appealed the case to the Supreme Court. Small businesses involved in the case argue that the impacts of tariffs are “not survivable.” According to Brian Peck, executive director for the USC Center for Transnational Law and Business, “Mom and pop shops, they don’t have the resources to absorb these high costs imposed by these tariffs.” Peck also notes that if these reciprocal tariffs are upheld by the Supreme Court, it would give the president unlimited authority to impose whatever tariffs he wants on different countries, limiting the choices businesses have in terms of finding alternative sources.
Adekoya’s experience is a prime example of the challenges small businesses face when dealing with tariffs. She has had to adapt her business strategy to cope with the increased costs, prioritizing core flavors that use readily available ingredients and limiting the availability of specialty flavors that require imported ingredients. As Adekoya explains, “I have to find a way to persevere. If I didn’t have that mindset when I started my business, I wouldn’t have gotten this far.”
A Call to Action for Small Business Owners
The story of Fleurs et Sel serves as a reminder of the importance of considering the impact of tariffs on small businesses. As the Supreme Court considers the Trump administration’s appeal, small business owners like Adekoya are left to navigate the uncertain landscape of international trade. To learn more about the effects of tariffs on small businesses, visit Here
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