After three years of working in the outdoor industry at Smith, who makes helmets and goggles, Kathy Abel realized that there aren’t many brands built with women in mind. In 2016, she founded Wild Rye, a rural Idaho outdoor apparel brand aimed at women.
Building her business was a labor of passion and included great risks, including using her home for capital. It wasn’t until 2021 that she made a profit. Now her business faces yet another existential threat: high tariffs will raise her costs, and she is not sure how long she will be able to maintain her business.
Abel expects a purchase order worth $700,000 will arrive in July. This includes the complete lineup of brands ordered from Chinese suppliers in December. She says Wild Rye, imported twice a year, will be subject to a $1.2 million tariff on future shipments.
“I don’t have the cash to pay for these duties. These duties are paid when I enter the country. I don’t have time to sell this product before the duties are placed. I may go out of business in the next four months,” Abel said.
Since taking office, President Donald Trump has imposed 145% tariffs on China and 10% on all other countries. The president argues that tariffs encourage businesses to return manufacturing to the state. But it leaves hundreds of small businesses like Abel scrambling to find ways to manage large fees.
U.S. Treasury Secretary Scott Bescent told reporters’ organizations at a White House briefing last week: “The goal here is to bring high quality industrial jobs back to the US. President Trump is interested in future jobs, not past jobs.
His comments put even more pressure on employers like wild rye. To survive the storm caused by Trump administration’s tariffs, Abel freezes employment, stopping the salaries of 11 full-time employees and halting new product developments. She said that the price of fall products needs to be increased, in the 10-20% range.
On April 29, she and hundreds of members of the outdoor apparel community met Washington leaders and asked for support. Abel said Democrats were not sure what they could do in Republican control of the House and Senate, but they feared retaliation if Republican leaders opposed the president.
“I was hearing it from both sides of the aisle. I’m frustrated. It seems difficult to find a way forward. Everyone understands that small businesses are crumbling, and everyone feels that there’s no playbook for this,” Abel told Al Jazeera.
The US Chamber of Commerce has also pushed the White House to remove the exceptions for small businesses like wild rye that the Trump administration quickly dismissed.
There are no equivalent US alternatives
Abel says she started as a Made-in-USA brand, but it wasn’t financially sustainable.
“It took almost the business before we started because the US doesn’t have the ability or ability to produce technical apparel,” Abel said.
Most textile products, such as clothing and shoes, purchased by Americans, are not made in the United States. The US imports approximately 97% of clothing from Asian countries, mainly China. This has been hit hard not only by 145% tariffs, but also by Vietnam and Bangladesh.
But it’s not just the apparel industry facing this challenge. It is the entire SME community defined as a business with less than 500 employees, part of an economy employing around 61.7 million Americans, accounting for 45.9% of the US workforce and 43.5% of the US gross product (GDP).
The wider economy is already feeling a shock wave from tariffs affecting small and medium-sized businesses. US GDP fell 0.3% in the first quarter of the US Department of Commerce, after an increase of 2.4% in the fourth quarter of 2024. According to the ADP, employment growth came to 62,000.
Consumers’ trust has hit a 13-year low, with consumers pulling back spending for fear of rising costs even further. This means fewer people can buy products ranging from outdoor apparel to single origin teas and spices.
“In a tough place”
In 2014, Chitra Agrawal founded Brooklyndelley, a food brand inspired by Indian cuisine in Brooklyn, New York, along with her husband Bengalusus.
Over the past decade, they have grown into a large business that starts out as handmade and then distributes to major retailers such as whole food and Kroger, creating a variety of products, including 14 different seasonings and stewed sauces, which have grown into meal kit services such as Hellofresh and Blue Apron.
As she is a specialized brand, sourcing specific materials from other parts of the world is not part of the brand’s appeal, but also a need.
“We manufacture these authentic Indian products that are not grown in the US or require ingredients that are available on a large scale.
Agrawal said 65% to 70% of the ingredients she uses come from outside the US, mainly from India, as well as glass from China, as well as from Mexico and Sri Lanka.
Like Agrawal, Anjali Bhargava faces similar challenges. The founder of Anjali’s Cup is a brand that makes single origin spices and teas from around the world, Vietnamese ginger, Thai turmeric, Indian tea, and in her view, make the brand special.
In 2024, the US is the largest importer of both inger and several different types of tea, including black and green, according to Tridge, the global food procurement data analytics company.
“If you want to continue creating these products and if that goes with them, you have to pay customs duties on these things.
She says she is trying to find domestic alternatives for the aspect of production, such as large costs like packaging, to reduce costs. At a disadvantage, she imported cans from China. Once her stock runs out, she may have to discontinue four to six of the 11 products she offers, as she cannot afford to pay for the additional costs of her imported products.
“Essentially, to keep the business going, I’m forced to completely overhaul the retail packages (which can be produced within the state), completely overhauled. This means there’s a redesign, filming again, and costs,” added Bhargava.
She says she needs to leave the cans she imports from China and explores other types of packaging options, such as pouches. The unexpected one-off cost between $10,000 and $20,000 will be digging into her already small margin, says Bhargava. She is the only full-time employee, but she hires outsourcing to freelancers and other businesses for tasks from packaging to delivery.
Prices go up
Unlike large companies, it is much more difficult for small businesses to absorb tariffs.
“We found it difficult to balance these costs because small businesses have very small margins. They are the ones who get hit hardest,” said Alexis Damato, director of government affairs for SMEs, advocacy group for small business majority.
“No one wants to do it because they have an impact on whether they eat these expenses or hand them over to consumers,” Damat added.
Raising prices in response to market pressure does not guarantee that they will decrease as costs decrease. At the start of the Covid-19 pandemic, supply chain disruptions forced producers to raise prices. But even after the costs were eased, grocery stores kept prices high as consumers continued to pay. Furthermore, policies and market forces did not force reductions.
The burden is the weight of the Agrawal.
“You’ll want to make that change and at some point you want to roll back those price increases. There’s no guarantee that prices will fall on the shelves. It’s very difficult to work with the grocery store to lower prices again. You need to be very careful about this move.
However, these looming concerns make consumers and businesses stock important items that will help them import goods before tariffs begin and avoid price hikes for at least a while.
In the first quarter, US imports surged 41.3%, including entrepreneurs like Sean Mackowski, owner of Tallon Electric, which makes guitar pedals in Columbus, Ohio.
“We bought a lot. I think everyone did their best to scramble, and I hope that closes the gap with this. But once we get to the end of that bridge, we either need to find another way or run out of things.”