Tariffs imposed by the Trump Administration last week have dominated the national news cycle with substantial ramifications for international trade, and Monroe County is not excluded from any impacts as some local businesses are already considering what greater import costs could mean for them.

U.S. President Donald Trump said Wednesday he authorized a 90-day pause as part of his tariff plan but was also raising the tariff rate for China to 125 percent, effective immediately.

The announced tariffs affect countries with a long history as U.S. trade partners as well as a number of smaller nations, with tariffs against China being particularly strong while some North American goods have been exempt thanks to the United States-Mexico-Canada trade agreement known as USMCA.

These tariffs were seemingly meant to be reciprocal, with the administration pointing to apparently existing tariffs imposed by other countries against the U.S.

A chart was presented by President Donald Trump during a press conference last week that has circulated widely on social media, the chart noting that the tariffs against the U.S. also factor in “currency manipulation and trade barriers.”

However, national news sources note these tariff figures appear to have been calculated by taking the country’s trade deficit, dividing by its exports to the U.S. and multiplying by half – meaning the chart is based on existing trade deficits between the U.S. and other countries rather than existing tariffs imposed by other countries against the U.S.

For clarity, a tariff is generally defined as a tax or duty that is paid on imports. With the U.S. imposing taxes on Chinese and other nations’ goods, U.S. businesses purchasing these imports from China pay the tariff to the U.S. government.

While the apparent goal of the tariffs seems to be addressing international trade deficits, more immediate global impacts over the past few days have included strong criticism from other nations as well as a large hit to U.S. stock markets.

In an article from Southern Illinois University Carbondale, associate professor Gregory D. DeYong – who also has a background as a supply chain and import/export manager – details some additional large-scale impacts.

DeYong noted the negative effect of the tariff announcement on global stock markets, also indicating that consumers and businesses will “experience volatility” given how “global trade negotiations are typically both time-consuming and fickle.”

The article also details DeYong’s opinion that long-term tariffs could prove beneficial for domestic logistics providers and, of course, manufacturers as businesses alter their supply chains. Domestic energy production and energy consumption could also experience some benefits as gasoline and crude oil prices have dropped.

He also identifies that foreign apparel, electronics and pharmaceutical manufacturers will naturally suffer unless they qualify for USMCA compliance. Businesses dealing substantially in imported goods such as automobiles and pharmaceuticals will be heavily affected.

A recent KMOX radio interview with Washington University economics professor John Horn also offers a wide perspective on the tariffs and their potential impact.

Horn noted the U.S. has trade deficits with a number of countries – particularly China – and trade surpluses with others like the United Kingdom. Tariffs serve as one potentially suboptimal way of altering the balance of imports and exports.

In regard to impact, Horn said the tariffs would likely result in a reduction in trade in the short term unless they are meant to be more of a temporary negotiation tactic by the Trump Administration.

Long-term impacts could vary based on how long exactly businesses anticipate them existing. With some infrastructure investments lasting for decades in order to build domestic manufacturing facilities, Horn said it wouldn’t make much sense for businesses outside the U.S. to build domestic infrastructure if they expect tariffs to only stand for a few years.

Regarding the impact for middle-class Americans, Horn simply said “Prices are going to go up.” While businesses could negotiate with foreign manufacturers to help contain costs, he notes Walmart isn’t simply going to take a 50 percent tariff and will wind up passing that price on to consumers.

At the state level, an article from Capitol News Illinois published Tuesday  notes that Gov. JB Pritzker has vowed that Illinois will remain a “stable” trading partner for foreign nations as he signed a nonbinding memorandum of understanding alongside a representative of the United Kingdom.

Locally, the Republic-Times has heard from several local businesses in recent days, with owners and representatives offering varying perspectives on how they’re handling or anticipating any potential tariff impacts.

Hopskeller Brewing Company owner Matt Schweizer offered his thoughts on the tariffs as a both a downtown Waterloo brewery and restaurant owner, also speaking on some of the general philosophy around tariffs.

Schweizer placed emphasis on the definition of a tariff as a tax an individual or business pays when purchasing a foreign good. He noted some folks seem to be unfamiliar with what exactly a tariff is.

“There’s a lot of uncertainty and confusion about what tariffs are and who pays them,” Schweizer said. “When we tariff China 25 percent, the Chinese Communist Party is not paying the United States for these goods. This is fundamentally the person bringing it into the port of entry.”

He further explained that a tariff is just like any other tax or cost that a business might encounter. Whether a tariff is imposed or the price of labor increases, that cost is going to have to be paid for.

“Just like with every other expense, whether that’s sales tax or shipping or special cold storage, you add it to the cost of that product,” Schweizer said. “That makes its way down the chain. Ultimately, the end user is the one who ends up paying that in a roundabout way.”

Speaking more on the purpose of tariffs, Schweizer explained that they can serve to protect domestic industries or ensure that a country can provide its own essential goods – he noted how the U.S. not relying on other nations for microchips could be beneficial in the event of a military conflict.

Tariffs can also serve as a stick to be used alongside a carrot when it comes to re-negotiating trade deals.

When it comes to the tariffs’ effect on Hopskeller Brewing, he offered a list of imported goods his restaurant uses regularly. These include coconut and pineapple from Thailand, seasonings from Great Britain, tomatoes and olive oil from Italy, olives from Portugal as well as Egypt and Greece, sweet cherry peppers and artichokes from Peru and banana peppers from Turkey.

Hopskeller also relies on hops from the United Kingdom, France and Germany. Schweizer remarked that malt overwhelmingly comes from the United Kingdom and Canada with a couple of craft producers in the U.S.

Schweizer also noted that, when it comes to liquor, his business relies heavily on imports as scotch, tequila and wines simply aren’t able to be sourced domestically.

He spoke about trade deficits, saying the U.S. has such heavy trade deficits in large part because of the country’s wealth and the fact Americans consume so much.

With such a demand for so many goods, Schweizer noted this naturally leads to a high demand for imports. For example, as the U.S. banana pepper industry can’t fulfill U.S. demand, suppliers look to a country like Turkey which has a particular specialization for banana peppers.

“Coconuts and pineapples for our drinks come from Thailand because, for the most part, we don’t really grow coconuts in the contiguous 48 states – at least not at the volume that you would need to satisfy any meaningful demand,” Schweizer said.

When it comes to finding a new supply of the many items he currently imports, Schweizer said he is interested and positive about looking for more local and domestic sources as, in some cases, this allows him to actually find higher quality goods and reduce the cost burden on the restaurant when it comes to paying for shipping costs.

He did point out an issue regarding looking to fill his supply chain domestically, however.

While he looks to California over Italy for tomatoes, many other business owners are doing the same. For this and many other industries, there simply isn’t the means to meet the newfound demand for domestic goods.

“I think the idea is that eventually those industries would fill out to meet American demand, but I think it’s really hard to conceptualize just how massive the U.S.’s economy is and just how massive that demand is in the U.S.,” Schweizer said. “One of the reasons we have a trade deficit is because we buy so much stuff that we have to go around the world to keep buying more.”

Schweizer identified several ways a business owner might try to offset costs stemming from tariffs, such as increasing volume by finding new customers or cutting costs by switching products and reducing employee hours.

A business owner might also simply increase prices.

“I’m really, really pushing to increase volume, finding ways to cut costs and then ultimately raising prices if or when those two measures don’t work,” Schweizer said. “Those really are the three things available, ultimately. Especially for a retail business.”

Schweizer ultimately noted that, this early on, it’s uncertain whether or not the tariffs will last or what their full extent and impact could be.

Jared Nobbe with Sydenstricker Nobbe Partners expressed a similar uncertainty, though he remarked that his business was fairly lucky as most John Deere equipment is manufactured in North America, covered by the USMCA.

While his dealerships – located in Illinois, Missouri and New York –  will be largely unaffected, he noted that a number of tractors the business deals in are manufactured in Germany, and he and his peers are currently in talks with global manufacturers to gauge the potential impact in the weeks and months to come.

With a great amount of uncertainty, Nobbe remarked how difficult of a situation his customers might find themselves in now given how farmers often deal with lower revenues and tight budgets. Issues could be exacerbated down the line as other countries place retaliatory tariffs on the U.S. industry.

“What we’re working through right now is, out of those tariffs, how are those tariffs absorbed? Is that a manufacturer or a dealer, those kinds of things,” Nobbe said. “It’s a little bit of unknown right now for us.”

Brian Bode with Waterloo Lumber said he’s seen some waves following the tariff announcement, though with only a few products affected, he didn’t express any major concerns.

He offered a bit of perspective while recalling supply chain issues he encountered through the height of the COVID-19 pandemic, with railcars getting cleared out as they came into St. Louis.

While some major concerns have been expressed about pharmaceutical imports, the Republic-Times heard from Khoury Pharmacy on Main Street in Columbia that no major changes seem to be on the horizon at the moment.

Another business which has responded positively is V8 Speed & Resto in Red Bud, with Kevin Oeste noting how his business has been able to find a domestic supplier whose prices aren’t set to be affected by tariffs and have thus seen a substantial increase in business.

Oeste noted the business is further looking into other domestic suppliers. He also expressed his support for the tariffs and the hopeful impact they’ll have on U.S. manufacturing.

“The V8 Speed and Resto Shop is working to identify U.S. based suppliers to potentially minimize any impact that tariffs might have,” Oeste said. “However, I’m in favor of the tariff concept as I believe we should not be penalized for exporting our products around the world, and I believe fair trade will eventually foster American growth in manufacturing and jobs.”

One somewhat unexpected business which reached out to the Republic-Times on the tariffs issue was Hoffen Funeral Home in Millstadt, with Elle Heiligenstein noting increased costs her business is likely to see.

She specifically pointed to cremation urns chiefly imported from India as well as caskets made of Canadian lumber and manufactured in Mexico that could see an increase in prices (depending on USMCA exemptions).

Heiligenstein noted how, being a smaller funeral home, she already tries to keep costs as low as possible and is looking for more domestic suppliers. Should she face a substantial increase in costs due to tariffs, however, she said she would have little choice other than passing those costs on.

She also suggested that, while she expects businesses in the area to be more upstanding, some unscrupulous businesses outside the community might simply use the tariffs as an excuse to increase prices regardless of the actual impact they encounter.

With the tariffs only being announced last week, it is possible for them to be retracted, reduced or altered, and it’s difficult to gauge just how much of an effect they could have on local businesses this early on.

Schweizer offered some additional thoughts on how Monroe County might best handle the situation.

“Be sure to support local,” Schweizer said. “Small businesses, it’s all a volume game. We have been very, very fortunate with an incredible customer base. We have so many phenomenal businesses here in Waterloo and in Monroe County. Just as we are all, as business people, thinking about, ‘How can we maybe bring this in a little bit more locally?’ hopefully customers will mirror that as well. This is by no means insurmountable.”