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California Small Businesses Adapt to New Tariffs

Small business owners in California are innovating to cope with new tariffs.

News Summary

Small business owners in Southern California are adjusting their strategies in response to recent tariffs implemented by the Trump administration, particularly on imports from China. Entrepreneurs like Jack Carlisle of The Potting Shed are re-evaluating their inventory sources and managing costs with innovative collaborations. The tariffs, which took effect on April 2, are expected to impact various industries, prompting many businesses to seek alternatives and brace for increased prices. This challenging environment is pushing small businesses to innovate while navigating the complexities of trade policies.

California – Small business owners across Southern California are adapting their strategies in response to the tariffs imposed by the Trump administration. These tariffs, particularly affecting imports from China, have forced many entrepreneurs to reconsider their sourcing options and inventory management to mitigate rising costs and maintain customer interest.

Jack Carlisle, the owner of The Potting Shed in Orange, has modified his purchasing approach as a direct response to these tariffs. His store, located in the historic downtown area adjacent to Chapman University, is known for a wide range of products, including plants, pots, soil, candles, and housewares, generating over $1 million in annual sales. As the tariffs echo the challenges experienced during the COVID-19 lockdown, which spurred a surge in gardening and home improvement activities, Carlisle is now carefully selecting inventory and utilizing strong relationships with vendors to manage increased costs effectively.

One significant adaptation includes working with a Canadian ceramic pot maker who is storing products at pre-tariff prices in San Diego. This collaboration allows Carlisle to minimize cost increases while still providing quality items to his customers.

The implementation of tariffs on April 2 has caused a ripple effect across various industries. Many Southern California business owners are now questioning their reliance on foreign-made products and seeking alternatives to avoid the financial burdens associated with tariffs. The National Retail Federation has projected that U.S. imports may decline by at least 20% in the second half of 2025 if tariffs remain enforced. This potential drop in import volume has prompted the ports of Long Beach and Los Angeles to prepare for reduced cargo activities, particularly from China, where tariffs can reach as high as 145%.

Small businesses in the aerospace sector have been particularly affected. Companies like Aura Seating in Torrance have faced challenges, leading to significant layoffs as they cope with increased material costs arising from tariffs on aluminum extrusions and aircraft components. Similarly, Independent Forge Co. in Orange, which supplies parts for Boeing aircraft, is dealing with decreased overseas orders due to the combined effects of tariffs and ongoing supply chain obstacles.

Manufacturers across the board are striving to secure pricing to navigate the volatility created by the tariffs. Strategies vary among businesses; for instance, Lily Jack, a furniture producer, has been able to sidestep tariff issues by adhering to the United States-Mexico-Canada Agreement (USMCA) trade framework.

As the landscape shifts, experts indicate that tariffs are stimulating innovation among small business owners, who are increasingly finding alternative methods to mitigate their costs. However, hesitation among larger suppliers has rippled through the supply chain, leading to reduced order placements for smaller suppliers, further complicating business operations.

Consumers and business owners alike are bracing for a rise in prices across a variety of sectors, including electronics and furniture, due to the increased import tariffs. While supporters of the tariffs argue that these measures will ultimately benefit the U.S. economy despite initial price hikes, critics warn that they could lead to inflationary pressures and exacerbate economic uncertainty for consumers and businesses alike.

As the situation continues to unfold, small businesses across Southern California are navigating a challenging environment, striving to adapt to the evolving landscape shaped by trade policies. The ongoing innovation and resilience exhibited by these entrepreneurs reflect their commitment to remaining competitive during these turbulent times.