Bay Area hardware store owner says he's already feeling pressure from tariffs
With President Trump imposing tariffs on international exports, business owners are already feeling the pressure, including the owner of several Bay Area hardware stores.
"We work off of a very slim margin. And you can't just take a 10% hit on 2,000 SKUs. And just absorb that. If it was maybe 100 skews, whole different conversation. But when you're talking so many products come from China, you have to take those prices and increase them for the consumer," Jeff Leopold, the owner of Standard 5 & 10 Ace, told CBS News Bay Area.
Leopold owns six total stores across the region, and their business has been open since 1939.
He said he cannot foot the pricier bill on his own, and will be making the tough decision to raise his prices. While Leopold runs his business independently from Ace Hardware, he buys inventory from the company, and adds that Ace has already begun making price increases to nearly 2,000 items.
"I think people will actually buy less because items become more expensive. They have a certain budget," Leopold said.
That is why he is worried these new tariffs will stall sales.
"You take a lightbulb that's at $9.99, and bring it over $10. There is a little bit of a consumer resistance, like, 'Why am I paying $11 now for a lightbulb?'" Leopold said.
CBS News Bay Area talked to Cal State East Bay economics professor Farhad Sabetan about the impact California has on global imports.
"Price we end up paying is going to be higher, and the cost to produce in the United States is going to be higher," Sabetan said.
He explained, "We import almost half a trillion dollars of goods from other countries. Of that, China is the top of the chart. In other words, California is a top importer from Chinese goods. That is about 25% of all the imports, amounting to anywhere between $113 billion to $120 billion."
The professor added, "If they retaliate, then our exports to these countries are going to be affected. For example, our export to Canada is almost $20 billion. And to Mexico almost $33 billion. These are a lot of production that we will not be able to produce and send to those countries, that means less jobs."
Sabetan adds that besides hardware parts, cars and tech gadgets are going to be pricier. He estimates the average price of cars will increase anywhere from $6,000 to $25,000.
"By some estimates, laptops and tablets are going to cost about 19% more. Smartphones may cause up to 14% higher," he said.
As for Leopold, he understands that the higher price tag will come at a more expensive cost of losing customers. But he hopes that neighbors will still continue to support local businesses as they are finding that tough middle ground.