Scott Smith owns Central Coast Surfboards in San Luis Obispo, which carries several brands that manufacture their products overseas. Just two days after the Trump administration first introduced tariffs on imports from nearly 90 countries, he was concerned but remained hopeful for a policy reversal.
“We’re just sort of at the mercy of the world, right?” Smith said.
On April 2, President Donald Trump announced his “Liberation Day” tariffs on several countries that import goods into the United States. A tariff is a type of duty, a broad term used to describe taxes placed on goods coming from other countries. Tariffs are meant to regulate international trade, usually under some kind of pretext. The Trump administration’s goal was to correct trade imbalances that threaten America’s industrial base and national security, as previously reported by Reuters.
Since then, the tariffs were removed and reapplied to different countries amid extensions for negotiations and questions over whether Trump overstepped his authority. As of publishing, new tariff rates have been in effect since Aug. 7, ranging from a baseline 10% rate to a maximum 50% rate, according to the government’s Harmonized Tariff Schedule.
Over the past six months, Smith said that costs to ship his foreign-manufactured inventory have risen, forcing him to raise prices on surfboards, skateboards and other accessories. He now joins other small business owners in downtown San Luis Obispo who are managing the costs of federal tariffs.
“We’ve got to keep the world turning. Everything’s fluid and news changes fast.”
Scott Smith, Owner of Central Coast Surfboards
Two of the brands Central Coast Surfboards sells include Firewire and NSP SurfBoards. They produce boards in Thailand and are subject to a 19% tariff rate, according to the tariff schedule. Catch Surf, which produces boards in Taiwan, is subject to a similar 20% tariff rate, according to the tariff schedule.
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Smith sells American-made surfboards from brands like Patterson and Surf Prescription, which are not touched by federal tariffs. However, there are advantages to the foreign-made boards. While he praised domestic suppliers who hand-craft their boards, he complimented foreign manufacturers whose machine-made boards are engineered for a quality riding experience.
“Overseas factories produce at very high levels, clean, consistent and reproducible, often at prices that are hard to match domestically,” Smith said.
Among supporters of the current tariff policies, there is a common call to buy American-made products.
“Buy American is the epitome of common-sense policy,” the White House wrote the day after Trump’s first tariffs were announced.
However, some domestic boards have seen an increase in cost from suppliers, according to Smith. He doesn’t believe U.S. manufacturers can produce boards in the same quantity as foreign manufacturers.
“If there’s stuff sourced in the U.S. that was comparable and good, then, yeah, we would get it, but there’s just not that much available,” Smith said. “Companies can’t ramp up manufacturing overnight.”
Working with suppliers to keep prices low
Tariffs affecting imported food worry Jim Hessler, the owner of SLO Olive, which has been in business for 18 years.
Hessler sells products imported from Italy, such as balsamic vinegars, truffle oil, truffle salt and pasta. All of these products are subject to the 15% tariff rate on the European Union, according to the tariff schedule.
Hessler said he is absorbing some of the tariff’s cost to keep prices down for customers. With the upcoming holiday season, he worries that raising prices could hinder sales at a crucial time for his business.
Packaging for Hessler’s products is also subject to tariffs since they are not domestically produced. Some of his gift bags are made in India, which currently have a 25% tariff rate, according to the tariff schedule.
“I’m not going to worry about raising prices until we get into January,” Hessler said. “We do one third of our total business in a year during the last six weeks.”
Hessler hopes possible court action could undo the policy altogether. As of Oct. 7 of this article, the Supreme Court is hearing arguments for cases that claim Trump’s tariffs exceed his power as the president, according to court filings.
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With this current litigation against the Trump Administration, Hessler hopes a favorable decision could turn this into a short-term problem.
Even for businesses less impacted by the tariffs, other challenges remain
Ben Taylor, who owns Mama Ganache Artisan Chocolates, said tariffs impact him less, but his business faces other challenges.
Taylor buys chocolate in bulk, melts it down and turns it into various confections, such as peanut butter cups or hot chocolate. He also uses his purchasing power to resell chocolate to other small businesses, such as bakeries.
He has avoided tariffs by negotiating with brands offering either cheaper prices or a commitment to pay the tariffs themselves. Overall, Taylor believes he’s “pretty lucky” to have avoided tariffs so far.
Still, he navigates other economic factors that raise the cost of goods. With an annual inflation rate of nearly 11%, chocolate globally has grown more expensive, as reported by CNBC. Taylor said he has noticed the higher prices.
“A couple of years ago, it was about four to five dollars per pound, now it’s about nine, 10, 11 dollars per pound,” Taylor said. “I don’t want to downplay tariffs, but they’re kind of the least of my worries.”
Antonia Elhajnasr, the owner of Antonia’s Pizza, said she hasn’t been affected by tariffs since her food is sourced from local farms. However, she saw a decrease in foot traffic downtown since November.
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Elhajnasr worries about the local economy and thinks downtown needs to have more special events to attract customers.
“The only thing downtown really has is your farmers’ market, which is all-year-round, and then you have concerts in the park and the Christmas parade, but not really, not much else goes on downtown,” Elhajnasr said. “I personally think there should be more downtown, you know?”
She is also concerned about clothing shops downtown that are dealing with the combination of fewer customers and tariffs.
“Unfortunately, it’s not just San Luis Obispo. A lot of businesses are having problems. the economy is bad.”
Antonia Elhajnasr, Owner of Antonia’s Pizza
This story originally appeared in the October print edition of Mustang News. Check out more from the edition at news stands around campus and San Luis Obispo.
For more stories from the October print edition check out the featured print section on our website or the full issue.