Tariffs

News about tariffs has been all over the papers and internet but it’s hard to know how they’re manifesting in the American economy unless you’re in the thick of the extensive paperwork necessary to deal with them. We, unfortunately, are. And we think it’s worth explaining what’s happening right now in order to dispel false information and to explain what the holiday season may look like this year.

It’s no secret that the majority of our goods come from overseas. We do have some incredible domestic manufacturers - Jill Rosenwald from Boston, Andrew Pearce from Vermont, Nichibei Pottery from California, Apotheke Candles from Brooklyn, Matthew Soule from right here in Rhode Island. But we pride ourselves on finding the most artful items we can and those items come from all over. Weavers in the United Kingdom make some of the most incredible woolen blankets in the world. Nearly all of the hand-done block printing - on pillows, napkins, lampshades, and tablecloths - is done in India. The most reliable rechargeable lamps are manufactured in Italy. And France is still making some of the world’s best linen kitchen towels and steel cheese knives. 

There were a lot of threats and variable numbers bandied about over the summer, but the tariffs ultimately took effect in late August. Some figures were known and fixed: the EU has a 15% tariff on nearly everything coming into the country. The UK has a 10% tariff. Our experience is that manufacturers have understandably increased their prices to cover the tariff which makes it appear as if they are paying those taxes. But, of course, we are paying the price increase which is the second this year. (Most retail-oriented companies raise their prices in January.) We have many incredible manufacturers who have absorbed 5% of the cost, passed along a 10% increase which, in turn, allows us to pass only 5% along to our customers. Some vendors have kept their prices the same and left the tariffs to us. Simple, right? Not so much. Our first “tariffs due” package came by UPS who let us know, within 48 hours of hitting US soil, that we owed the government money. We paid that same day. Three weeks later, it still sat in a government customs warehouse, lost in endless piles of packages, some of which were paid for, and many of which were abandoned because of the high costs. Hours were spent on the phone but the message remained the same: the inventory is enormous, there aren’t enough people working, if we find your goods we will send them on to you. (We are still waiting.)

In early September we found out that an additional 50% tax was levied on all steel and aluminum. I have to imagine this was geared toward the construction of buildings but cheese knives got caught in the tariff frenzy. That means that French cutlery - spreaders and chopsticks and tart servers - are being taxed at 65%. Again, our vendors are often eating as much as 20-25% of the cost; but 40-45% increases are still falling on small businesses across the country.

So just know how this will affect the next few months. Goods are more expensive and harder to get. Retailers are scrambling, not only to secure holiday inventory but to get inventory worthy of holiday gift-giving. We know that we are fortunate because we don’t carry a large stock of items from China - which is taxed at 30% across the board - but it’s safe to say that big box stores and even supermarkets will be showing signs of strain in the coming weeks. We do hope that the country will have a robust holiday season, as manufacturers, business owners, and employees are all depending on it in order to keep the machines running next year. So while some of the best holiday gifts require no spending at all, it’s worth considering our community and the ways we can get each other through a difficult economic time. Show up when you can, lend a hand or an ear to those struggling, and know that the small business owners around you are doing their very best to keep Providence - as well as cities and towns across the U.S. - afloat.