DANIELLE KURTZLEBEN, HOST:
Trade talks between the U.S. and Canada collapsed late yesterday, so now the U.S. has imposed 50% tariffs on an array of Canadian goods including beer, whiskey and dairy products, fishing rods and hockey sticks and clothing. The tariffs will affect $20 billion worth of Canadian imports. Today, Canada's prime minister Mark Carney announced that his country will impose its own new tariffs on U.S. goods starting September 8.
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PRIME MINISTER MARK CARNEY: Canada will match Washington's new tariffs, dollar for dollar, in order to protect Canadian workers, farmers, families and businesses.
KURTZLEBEN: More on how these tit-for-tat tariffs are affecting American businesses, we're joined by Mike Roach and Kim Osgood. They own a retail clothing store in Portland, Oregon, called Paloma Clothing. Welcome.
KIM OSGOOD: Thank you. We're very excited to be with you here today.
KURTZLEBEN: Oh, I'm curious. What was your reaction to the news about the new tariffs?
OSGOOD: For me, it was extremely upsetting because I think it's very disruptive to small businesses because you need to know what you can sell the goods you have bought at. And these agreements that we make with our Canadian vendors are made six months, a year ahead of time. So it puts us in a very awkward position with companies we have been dealing with for, like, 20 years.
KURTZLEBEN: I'm curious if you could pass the phone to your husband so I could ask him, as well.
MIKE ROACH: Hello there. This is Mike.
KURTZLEBEN: Hey, Mike. I want to ask you, as well. What was your reaction to the news about the new tariffs?
MIKE ROACH: If the president really knew the full negative impact of the tariffs that he put on the nation's small businesses last night, I believe he'd cancel the tariffs tomorrow. But he clearly doesn't understand what the negative impacts are on small businesses. He either doesn't know or doesn't care. So here we are with these tariffs. Fifty percent tariffs would, I think, make even President McKinley blush to have a tariff that high on a next door neighbor.
KURTZLEBEN: How do you see this impacting your business? How much will this impact your business?
MIKE ROACH: Well, I'm going to put Kim on for that.
KURTZLEBEN: OK.
MIKE ROACH: Here.
OSGOOD: Well, you know, our customers are already struggling with inflation and with price increases, as we are, as a business, and consumer confidence is all-time low, and I feel like this just exacerbates the uncertainty that's out there. This is just a small example, but I'm also an artist, and there's this wonderful Canadian company that we've been dealing with called Le Galleries (ph). They do marvelous ink transfer process prints from my original artwork. And one of our very best-selling gift items is pillows with my artwork on it. Presently, they retail for $59. If we take a normal markup with this increased tariff, it brings the price to $86 for the same pillow, which is obviously a whole different price point. You know, tariffs push up prices for the business, for the consumer. So it's a negative thing 'cause, you know, at certain price points, people do not want to buy things.
KURTZLEBEN: All right, I want to make sure I'm getting both of you. Can you pass the phone to your husband?
OSGOOD: OK, sure.
MIKE ROACH: Well, yeah, it's interesting to bring up the pillow situation because I'm probably going to argue that - on the pillow because it's such a signature item for our business and it's got my wife's artwork on it, I'm going to argue that we hold the price there and hope these tariffs do not last. At the six-month point, we probably go, OK, we can't afford to keep selling the pillows at what essentially is close to cost. We need to raise the price on them. You know, it just - for small businesses have - we have so many challenges trying to run the business in the current environment anyway. And then you throw something like this, it's just like throwing a rock through the front door and say, OK, how are we going to pick up all the pieces of glass now and still conduct business for the day? It really, really is disruptive.
KURTZLEBEN: You were talking about the decision on what products you're going to raise prices on and what products you won't. Do you and Kim agree on all of this, or has there been...
MIKE ROACH: (Laughter).
KURTZLEBEN: ...Some debate? It sounds like there's been some debate judging by your laugh.
MIKE ROACH: There's already been some - yeah. And granted, this just started this morning, right? Because it went on last night - the tariffs did. Yes, I will probably err on the side of, you know, trying to cut our customers some slack and be as kind to them as possible and raise prices as little as possible wherever we can, but Kim will make the argument we can't sell items at well below what our normal margins are or we'll end up going out of business. And she and I have had a lot of these discussions like this over the years. But this is a particularly frustrating one because it's our government that created this problem. It's one thing when its forces out there way beyond our control, like the price of oil and other things.
KURTZLEBEN: Well, I'm curious - the administration would argue that the tariffs are meant to incentivize American companies to buy American, to use American suppliers. Have these tariffs caused you, at all, to find more American suppliers and move away from other countries, or is it just too soon to tell, especially with Canadian imports?
OSGOOD: You know, we have a long history of trying to promote American goods, but you can't always find what you want. For example, the Gallerista (ph) pillow line, I do not know of anybody in the United States who is filling that particular niche.
KURTZLEBEN: If you could tell either President Trump or Prime Minister Carney one thing about the real-world effect of these tariffs, what would it be?
OSGOOD: I think just that these decisions that are made have a huge impact on people's everyday lives. And most people are just trying to do the best they can to be in their community. And it just feels like there's just this sense of underlying struggle that's going on. And anytime erratic decisions are made like this, the ripple is bigger than they think, and it affects small businesses and everyone else in a much greater way.
KURTZLEBEN: That was Mike Roach and Kim Osgood. They own Paloma Clothing in Portland, Oregon.
Thank you both for joining us.
OSGOOD: Thank you very much. It was wonderful to talk to you today. Transcript provided by NPR, Copyright NPR.
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