Small business leaders from across Connecticut met with the state’s Lieutenant Governor, Susan Bysiewicz, and other state and industry stakeholders to share their grievances and experiences with tariffs, and hopefully inform state policy in response to their concerns. 

“Our conversation today is part of an ongoing effort to listen to business owners, specifically smaller businesses and the challenges that you’re facing with tariffs,” said Bysiewicz. “We know that tariffs are hitting our small business owners particularly hard, and we wanted to have the opportunity to hear directly from you about what you’re seeing and how you’re addressing those challenges.”

Increased purchasing costs, confusion surrounding tariff applicability, and decreased customer activity were among the chief complaints noted by business owners. 

Kristen Trainor and Perry Olson, co-owners of Diesel and Lulu’s, a small women’s clothing and accessories boutique, said their business’s purchasing was immediately impacted by tariffs and also said customers reported having less money to spend in their stores. 

“I’m seeing not only a decrease just in customer visits, but when they come in, [they’re] buying a single item, rather than a whole outfit,” said Trainor. 

Olson said the impact is even worse in locations that rely on tourism, such as in Plymouth, Massachusetts, where she runs a store, saying sales “have just plummeted this year.” 

Trainor noted that because her business purchases in the near term, buying weeks ahead instead of months, they felt the impact of tariffs immediately. Trainor also noted that they received higher tariff rates ahead of Trump’s removal of the de minimis exemption, or a tariff exemption for items priced less than $800, prior to the removal’s announced implementation date of Aug. 30.

“August 30, it was supposed to go into effect,” said Trainor. “We actually started getting customs bills two to three weeks prior to that, which we haven’t been able to get explanations around, and we also saw a huge fluctuation in how those were being applied.”

Olson shared receipts; on one order, they were charged a 68% tariff by customs, while on another, they were charged 78%. Altogether, they were charged tariffs four times in total before the de minimis exemption was supposed to be removed.

“No rhyme or reason to the percentages whatsoever,” said Olson. “All the orders were under $800, the de minimis was still in place. Made no difference.” 

Allison Carey Lynch, VP of Carey Manufacturing, which she said makes “latches, catches, handles, [and] fasteners,” also said she has faced considerable confusion from suppliers surrounding tariffs, and has received little clarification from customs officials.

“People literally have products sitting on the dock, waiting for the cheapest moment for them to bring it in,” said Carey Lynch. “It is very up in the air, and there’s a lot of things coming at all angles, at all times, and coming from the supplier, we oftentimes get hit with questions and forms and things that we have no idea how to answer or handle, or it doesn’t even apply to us.”

Carey Lynch said that she’s been most affected by prices in the raw materials required to manufacture her products. While she’s avoided the worst of tariffs thus far, due to the foresight of her suppliers to buy massive inventory of materials once talk of tariffs began to swirl, she’s beginning to see them now.

“As the inventory starts to run low, we are starting to see those price increases,” said Carey Lynch. “ In addition to that, because we service the military, we can only source our material from certain countries, so that is also a limiting factor for us.”

Tariffs have led to her company having longer turnaround time on purchase orders, as source material is “becoming more and more difficult to find, and more and more expensive,” said Carey Lynch. She compared her current supply chain issues as similar to those associated with COVID. 

As her products are typically used as components in larger products, she said she’s still seen her sales impacted by tariffs, despite the fact that Carey Manufacturing makes 90% of its parts in the US.

“We don’t even know half of what our parts go into,” said Carey Lynch. “Let’s say there’s a box, right? We make a handle that goes on a box. There’s other components of that box that are imported. Our parts might be USA-made, but if Pelican-Hardigg, they can’t make the box because x part is imported, all of a sudden, now they are shut down. That trickles down to us.”

Brian Montanari, CEO of HABCO Industries, a Glastonbury-based manufacturer and supplier of aerospace support equipment, said that tariffs have impacted his business due to how his contracts are structured. 

He said that 50% of HABCO’s business is via military contracts, which stipulate that HABCO must provide certain parts at a fixed price whenever the military requests them, and those prices are set every five years. Many of the parts the company is mandated to provide are parts that HABCO itself can’t manufacture, as they’re the intellectual property of another company. 

HABCO also has exclusivity agreements with overseas parts suppliers, stipulating that HABCO can only buy parts from them. As a result, HABCO must import parts from overseas suppliers at a heightened price due to the tariffs, and has to swallow losses selling them at a now-insufficient fixed price to its customers.

“I’ve got the suppliers that I have to buy products from overseas that say, ‘It’s your government, you guys have to figure it out, you have to deal with it,’” said Montanari. “And then I’m in firm fixed price contracts with my customers that I can’t go and push, so we get squeezed in the middle, and that’s the area that I have the biggest challenge with.”

When asked how the state could help, Montanari suggested that he could use help to negotiate harmonization codes. Harmonization codes are codes given to exported products by the exporters, that serve to classify what kind of product it is, and ultimately, what tariff rate the product is charged at once it comes ashore. 

“We don’t have the staffing or the resources to go and negotiate and go and push down on some of the harmonization codes,” said Montanari. “I’m understanding, the more we get into this, that some of the coding is not subject to tariffs, and that there’s some discretion. And so that’d be an area that I would love to see some support.”

Carey Lynch said she would like to see state or organizational support to help inform businesses on how the tariffs work, as she reports customs officials have thus far been of no assistance.

“I don’t have any experience in this,” said Carey Lynch. “I’m learning on the fly and Googling, and it could potentially have some very serious impacts if we’re not careful.”

Carey Lynch said that while it was “absolutely worth it” to re-shore the vast majority of her company’s industry, she stressed the point that re-shoring isn’t feasible for most businesses. She said it took over 10 years for her company to do so, and described the process as “terrifying” at times.

“Everybody says, ‘Bring everything back, make it all here,’” said Carey Lynch. “But I think people really underestimate the cost and the time and the commitment.”

Trainor wanted to make clear that she didn’t come “to complain, to whine,” but to inform consumers that tariffs will affect “all of us,” and said that as business owners, “we just felt it a little bit sooner.” She shared her belief that informing consumers of what businesses are facing would be the best tool to rectify the situation.

“We need to get the public to understand, because unless there’s that, frankly, outrage, I don’t think anything’s going to change,” said Trainor.

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