NEW YORK (1010 WINS) – President Donald Trump’s tariffs on Canada and Mexico, which took effect Tuesday, have unsettled global markets and prompted retaliation, leaving New York City small business owners bracing for supply chain disruptions and rising costs.
At Kalustyan's Spice Shop on the East Side, owner Aziz Osmani is already searching for alternatives after a Canadian supplier informed him they would no longer be shipping their product to him.
“So now, for example, I'm looking for a substitute for that,” Osmani said.
While some businesses are in wait-and-see mode, others are bracing for inevitable price increases. Dawn Kelly, owner of The Nourish Spot in Jamaica, believes there’s only one possible outcome.
“We all know that the prices get passed on to the customer,” Kelly said. “I think this will be terrible for us.”
For Kelly, whose business relies on fresh produce, the biggest concern is avocados.
Imports from Canada and Mexico are now to be taxed at 25%, with Canadian energy products subject to 10% import duties.
The 10% tariff that Trump placed on Chinese imports in February was doubled to 20%, and Beijing retaliated Tuesday with tariffs of up to 15% on a wide array of U.S. farm exports.
The U.S. president's moves raised fears of higher inflation and the prospect of a trade war even as he promised the American public that taxes on imports are the easiest path to national prosperity. He has shown a willingness to buck the warnings of mainstream economists and put his own public approval on the line, believing that tariffs can fix what ails the country.
“It’s a very powerful weapon that politicians haven’t used because they were either dishonest, stupid or paid off in some other form," Trump said Monday at the White House. "And now we’re using them.”
U.S. markets dropped sharply Monday after Trump said there was “no room left” for negotiations that could lower the tariffs. Shares in Europe and Asia were mostly lower Tuesday after they took effect.
The Associated Press contributed to this report.