BALTIMORE — The recent 10% tariffs on Chinese imported goods aren't stopping Baltimore Bicycle Works' roll just yet, but there could be some tough decisions down the road.
"I think it was short-sighted," worker-owner Bernardo Vigil said. "You have larger businesses that can maybe weather the storm but it is going to be particularly impactful to small businesses such as ours that are either going to have to make a decision to cut from their already slim margins or raise the prices for consumers, unfortunately."
The tariffs took effect on February 4.
Vigil says the lion's share of their parts come from China, and are sourced through U.S.-based distributors.
He anticipates it'll probably be another six to nine months before the business will see impacts, due to the stockpiled parts already in warehouses.
The tariffs will affect a number of industries, from tech to textiles, and the extra costs are almost always passed along to the consumer according to professor of economics at Loyola University Norman Sedgley.
"So, the first round of tariffs in Trump's first administration is estimated to have increased the cost of living for the average U.S. household by somewhere between $500 and $800 a year," Sedgley said. "Additional tariffs, 10% on Chinese goods, a blanket tariff that we import from them, could potentially cost the average American household an additional $400 per year."
"We're doing as much as we can as far as bulk buying before prices go up, trying to get things locked in, but again we are a small business there's not a lot of working capital for us, especially in the winter time," Vigil said. "Honestly we're taking a bit of a wait and see approach because that's all we can really do."
Sedgley says economists often advocate for free trade over tariffs. But he says in the U.S. there's a "political economy" also at play.
Baltimore business owner speaks about 10% tariffs on Chinese imported goods
"Because the losses are so concentrated, those who lose from trade have a very strong incentive to organize and speak out against it and politicians really have no choice but to respond to that, particularly if those geographic areas are in swing states that determine the results of major elections in the U.S.," he said.
"I think this is largely political showboating and I hope that it passes quickly," Vigil said.
If proposed tariffs on America's closest trading partners, Canada and Mexico, go through it could mean even more pain on your wallet.
Currently, they're on pause after last minute negotiations.
"My reaction to that is relief because I think that a tariff war with Canada and Mexico would be detrimental to the U.S. economy, it would definitely have an impact on job growth in the United States," Sedgley said.
