Local Businesses Pause Purchasing Due to Tariff Uncertainty

By Grace Gates

Reporting Texas

The Trump Administration has seemingly reached a stationary tariff policy as it works to negotiate with countries— Japan and Italy began talks this week. 

With specific reciprocal tariffs paused for 90 days, most countries face a 10% duty, but China has found itself in a more intense position After the nation imposed retaliatory tariffs, the Trump Administration raised China’s import tax to 145%. 

That means for certain goods, like syringes and electric vehicles, tariffs can reach 245%, meaning consumers could pay up to 2 1/2 times the cost of the product itself. Economists say buyers will likely start feeling the effects by June.

“I’m trying to just take it day by day,” said Teghan Hahn, CEO of Wild About Music Inc., which operates a music-themed gift shop and four locations of Toy Joy, an Austin-grown toy store. 

Almost 80% of toys are imported from China, according to the Toy Association.

“There’s a really small margin in toys,” Hahn said. “At the moment, things are fine. It’s just going forward, what’s gonna happen? That we’re really concerned with.”

Hahn said some distributors, along with ToyJoy, are holding back from buying products until costs are more predictable. 

“We’re calling all of our vendors, especially those who we know are 100% from China, to just see what their game plan is,” Hahn said. “Being really thoughtful with what we buy and when we buy is our best defense against all of this.” 

President Trump imposed smaller tariffs on China during his last term, and President Biden added to some of them.  ”We did have to pass that cost onto our customers,” Hahn said. 

“All I can say is that we promise to never highly increase our prices more than what’s justified,” Hahn said. “We’re just trying to maintain our bottom line and be able to pay our employees and pay our rent.” 

The University of Texas has found itself in a similar position, according to  Gary Hampton, interim director for the UT Small Business Program. The program helps UT complete projects by contracting local businesses. 

Currently, The university is building its own semiconductor factory in North Austin. “We’re kind of in limbo,” Hampton said. 

“Equipment alone has just skyrocketed,” Hampton said. “We’re not panicking. We are just waiting, seeing what purchases might be coming up soon, but trying to be proactive.” 

For now, UT has stocked up on assembly equipment typically imported from overseas to avoid making new purchases, but Hampton said price increases from tariffs may make it harder to compete with private companies in the area who hire the same local contractors. 

“We’re competing against a lot of people that have a lot more money and can move a lot faster,” Hampton said. 

With mounting uncertainty, the City of Austin’s Small Business Division said their resources and classes for local business owners are always available to help businesses manage hardships and expand outreach. 

“At the end of the day, consumers are gonna act the way they’re gonna act,” said JuaQuin Gonzalez,  program manager for the Small Business Division.  “What I see is that small businesses, especially the local ones, they’re resilient.”

Gonzalez encouraged consumers to look for ways to shop local, and said business owners should not be afraid to seek help. 

“If you take a look throughout the country, small businesses are what make the economy,” Gonzalez said. “Things change, and so as long as the small businesses continue to make those changes as they come along, they should be okay.”

Hahn said she is “feeling pretty hopeful” that the Austin economy is strong enough to stay on its feet. Instead, she’s focusing on maintaining a positive work environment and supporting local businesses, too. 

“We always say, ‘the doors will open tomorrow,’” Hahn said. “ If you’re able to get out in person and support your community, it makes such a huge difference for my staff to see happy people in here happy to shop.”