It's been just over a year since Liberation Day. That's when President Trump imposed steep tariffs on most of the U.S.'s major trading partners. The Supreme Court has since decided that the tariffs were applied illegally, and a lower court ruled that they must be refunded. But the Trump administration still has not budged, and Trump has imposed new tariffs to replace the ones that the courts overturned. As Houston Public Media's Andrew Schneider reports, many small businesses say they're suffering.
ANDREW SCHNEIDER, BYLINE: Misfit Toys is located just off a busy highway in Houston's Heights neighborhood. Vintage toys are its main stock and trade, says store owner Daniel Rivera.
DANIEL RIVERA: But that's never going to be enough to lure people into a retail setting if we don't also have some of the latest items that are hot.
SCHNEIDER: To lure customers, Misfit Toys still relies on the sale of new toys tied into summer blockbuster movies, as well as Christmas sales. Those new toys are largely produced in China and Japan. Since President Trump's tariffs took effect, Rivera says he hasn't been able to afford to stock up for either season. Paulina Gamino, Rivera's wife and business operations manager, says the store can't afford to absorb all the costs of the tariffs. Raising prices is the only option.
PAULINA GAMINO: And so now we're talking about brand-new toys that maybe would have been $25 - now, it's like $40, $45 for a brand-new toy. That's such a huge jump in increase.
SCHNEIDER: Misfit Toys has swallowed some of the tariff costs, and its profits have taken a hit. According to an analysis of Census Bureau trade data by the small business advocacy group We Pay the Tariffs, the emergency tariffs Trump imposed last year have cost American businesses more than $150 billion. Luis Torres, a senior business economist for the Federal Reserve Bank of Dallas, which regularly surveys business owners on the effects of the tariffs.
LUIS TORRES: You can see those comments of how those costs, those tariffs, you know, they've impacted them, causing increased selling prices, margin losses, also the uncertainty surrounding them.
SCHNEIDER: That uncertainty can drive customers away. Kacie Wright manages Houghton Horns, a brass instrument specialty shop north of Fort Worth.
KACIE WRIGHT: If a customer wants to order a custom trombone from us, we can say, well, at current pricing, it might be $7,000, but then the tariffs could change tomorrow, and your price could end up being $6,000 or $9,000.
SCHNEIDER: Wright imports student-level instruments from China and professional-level ones from Germany, Britain and Japan.
WRIGHT: And these instruments take three or four months to make. So if a customer wants to place an order now, we have no idea what price to charge them.
SCHNEIDER: Neither Wright nor Misfit Toys' Gamino and Rivera expect they'll see any tariff refunds as a result of the court orders. Rivera says he doesn't expect any stability on the tariffs as long as Trump is in office.
RIVERA: Because it could be tomorrow that he just changes his mind again and, you know, he pulls his hand into a hat and says, because of this, I can do it again. I can raise tariffs again. So we're not convinced it's over.
SCHNEIDER: To adapt, Misfit Toys is focusing even more on vintage toys. Layoffs in Houston's tech sector are forcing unemployed workers to sell off their toy collections, which the store buys at a discount and resells. But before the tariffs, the store had been planning on a major expansion. Rivera says that's no longer in the cards. For NPR News, I'm Andrew Schneider in Houston.
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