WASHINGTON (7News) — A day after tariffs kicked in against Canada, Mexico, and China, President Donald Trump negotiated an exemption for automakers from his punishing 25% tariffs on the North American nations for one month — as long as they comply with an existing free trade agreement.
His other imposed taxes will remain in place and could increase in April.
7News took a closer look at how local businesses are preparing. Before Congress on Tuesday night, Trump warned Americans to prepare for “a little disturbance,” but many economists said it could be more dramatic than that.
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With tariffs now driving up costs, from lumber to avocados, local business owners are managing higher supply chain expenses.
We spoke with two business owners who say they are bracing for what’s to come.
Yael Krigman has owned her bakery Baked By Yael on Connecticut Avenue in Northwest, D.C. for 15 years. This week she hired about a dozen recently fired feds and USAID contractors to work part-time.
But now she’s concerned that costs will go up.
“That makes it more expensive for us to make things. Going to make it more expensive for us to get things. And really, just the overall effects of the tariffs on everybody, it’s going to make everyone less likely to use their discretionary income,” said Krigman.
In Silver Spring, Maryland, Mirna Giron owns Spencerville Deli, a Mexican restaurant that depends heavily on products from the South.
“I am very worried because you know I use a lot of products from Mexico, like number one is the avocados,” Giron said. “We also use a lot of Mexican spices, Mexican beer. All of those items, are gonna be up with the prices.”
Within the coming months, Giron said each menu item in her restaurant will have to go up $.50-$.70.
THE BIGGER PICTURE
The new 25% tariffs on products imported from Mexico and Canada that took effect Tuesday could increase the cost residents here in the D.C. metro region pay on everything from fruits and vegetables to wine and lumber – but there are growing concerns about a North American trade war and spiking inflation.
The White House has also doubled the 10 percent tariff on exports from China to 20 percent. Canada, on the counter-attack, said it will impose tariffs on a wide range of U.S. products and Mexico has said it will do the same.
The import taxes are “a very powerful weapon that politicians haven’t used because they were either dishonest, stupid, or paid off in some other form,” Trump said earlier in the week.
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An analysis by the Peterson Institute for International Economics suggests that the tariffs could cost the typical family in the DMV $1,200 to $2,000 a year. For business owners, the impact will undoubtedly be even greater.
Kurt Rupprecht, a wealth management advisor for K Street Financial Group, a partner with D.C.-based Northwestern Mutual, said now is the time for consumers to adjust budgets by identifying areas to cut.
“You talk about goods, you’re like hey we know we are going to use this stuff later on this year. Are there any opportunities for paper products, or just for different household needs, and non-perishables that we can stockpile a little bit more of just to minimize the impact,” said Rupprecht.
Consider alternative brands or bulk purchasing to offset rising costs. Plan purchases before costs rise further and explore income-boosting opportunities.
For business owners:
- Manage supply chain costs and explore alternative suppliers.
- Adjust pricing strategically to minimize customer impact.
- Find savings through efficiency and cost-cutting measures.
