Mim Na Chiangmai, owner of the business Soulzential, has had to navigate numerous challenges in recent years, from the coronavirus pandemic to rising inflation and now, new import tariffs.
Despite these obstacles, she approaches her business with a positive mindset, feeling that she can manage the burdens placed on her and other small entrepreneurs.
However, she acknowledges that smaller businesses like hers face a tougher road compared to larger corporations. “More than a massive, big scale (company) where you make a lot of money, I feel like us, me, it’s so delicate,” Na Chiangmai said.
At a recent San Diego Made Market, many merchants showcased products crafted both locally and internationally. From ceramics to leather bags, these creators exemplify the resilience of small businesses in a landscape increasingly affected by tariffs.
The Supreme Court is expected to rule on the legality of these tariffs next month. First announced by President Donald Trump in the spring, their implementation has sparked concern among small business owners about financial viability and operational costs.
In San Diego, the impact of tariffs varies widely among small businesses. For many merchants who source their supplies domestically, it has been business as usual. However, those reliant on international suppliers have faced the need to raise prices or seek local alternatives, which can be challenging to find. Some businesses have chosen to close rather than navigate the complexities of tariffs and their associated costs.
One significant change has been the halting of the de minimis rule, which previously exempted small value shipments from duties and taxes. The adjustment from a threshold of $800 to zero has significantly impacted businesses that imported smaller items, forcing them into a more challenging financial landscape.
Chris Cate, CEO of the San Diego Regional Chamber of Commerce, emphasized that smaller businesses are more exposed to the ramifications of tariffs. While larger companies might have the leverage to negotiate deals with suppliers or manage increased costs by spreading them across a larger customer base, small businesses lack this power.
“For small businesses, that’s likely to be a more difficult time,” Cate noted, highlighting the lack of international policy experts available to help these businesses make sense of a complex and ever-changing landscape.
The financial burden of tariffs profoundly affects San Diego, a region with a vibrant trade relationship, especially with Mexico. Many small businesses move products back and forth across the border multiple times, exacerbating costs that are likely to be passed on to consumers. Cate suggested that increased tariffs could lead to significant implications for local job markets and trade.
The anticipated Supreme Court ruling is hoped to bring clarity and definition to tariff policies moving forward.
Na Chiangmai’s Soulzential remains a family affair; her mother manages operations in Thailand, employing a small team of seamstresses. In San Diego, Na Chiangmai oversees design and marketing.
As tariff rates fluctuated in September, rising from an initial 36% down to 19%, Na Chiangmai experienced a cost increase for shipping a box of garments. This led her to raise prices incrementally—some shirts now cost $55 instead of $50, while jackets range from $75 to $80.
“My stuff is unique, and it brings diversity to the U.S.,” she stated proudly, noting the challenge of manufacturing comparable garments in Los Angeles, which would skyrocket the price to $300 per jacket.
In stark contrast, Rasmus Lynnerup, co-founder of Lynnerup Fine Shirts, has chosen to shut down his bespoke shirt business rather than deal with increasing costs and red tape. Lynnerup articulated his frustration with tariffs that made sourcing high-quality fabrics, including luxurious buttons, unfeasible and led to a nearly 39% price increase for his shirts.
After pondering alternative career paths and deciding to relocate out of the apparel business, Lynnerup expressed his relief about shifting gears. “I’m not down on it. In some ways, the tariffs and stuff coincided with what might have happened anyway,” he said, hinting at potential excitement for a new direction.
Meanwhile, other small businesses employ different strategies in response to tariff challenges. The Julian Soap Company, operating since 1999, purchases raw materials primarily from U.S. suppliers. However, its costs have escalated, prompting a price increase of approximately 10% in its soap products.
Owner Michaeline McConnell has had to adapt to the challenges of increased shipping and ingredient costs while remaining committed to domestic sourcing.
Similarly, Mike Bocek, a hat seller, swiftly changed manufacturers after tariffs went into effect, opting for a factory in Southern California to stabilize his pricing and maintain competitiveness.
Vanida Clevenger, who runs Cre8tive Studio, noted that her commitment to local sourcing has shielded her from the tariff headaches other businesses face.
Rachael Fahlstrom, founder of Skin by Juniper and Jade, took a proactive approach by establishing a U.S.-based supply chain to mitigate the effects of tariffs and maintain reasonable pricing for her skincare products.
The owner of Apricot Yarn & Supply, Sara Heckman, has witnessed the impacts of fluctuating tariffs on her international yarn supplies. With varying duty rates across different countries, she is continually forced to adapt her pricing in response to suppliers’ cost adjustments.
Despite the challenges brought on by tariffs, Heckman finds that her business remains resilient, offering a valuable escape for customers during tumultuous times.
However, like other small business owners, she pointed to increasingly difficult conditions shaped by the lack of buying power compared to larger corporations.
This more significant burden has forced her to take a cautious approach to inventory, opting to purchase less of certain fiber brands, maintaining her commitment to quality while balancing operational viability.
Like all her fellow merchants in the San Diego Made Market, the uncertainty and unpredictability caused by the tariffs create a delicate balance between profit and maintaining strong supplier and customer relationships.
As small businesses adapt to these challenging market dynamics, the sense of community and craftsmanship continues to shine through in their resilience and determination to navigate an ever-complex business landscape.
image source from：sandiegouniontribune
