Tariffs already slowing sales at Long Island businesses, owners say

U.S. tariffs on imported goods that went into effect Tuesday already are causing some Long Island businesses to lose sales and creating panic among consumers worried about price hikes, business owners and managers said.

“I’ve been doing this 52 years and this is, without a doubt, the most turbulent times I’ve seen,” said Denis Dagger, vice president and general manager of the Smithtown Toyota and Smithtown Kia car dealerships. Consumers are not just concerned about the rising costs of cars, he said. “It’s the components, and the parts for servicing cars.” 

While the prices of some consumer goods are expected to increase, consumers should know that some products directly impacted by tariffs might not become more expensive in stores, while others that aren't under tariffs might see price hikes, said Steven Kent, economics professor in the business school at Molloy University in Rockville Centre. 

“Let’s say you’re known for selling slacks for $20 a pair, and you happen to be importing them from one of the tariff-impacted countries,” he said. “If you want to keep that price point, you may have to raise prices on something else that may not be as visible to the consumer.”

On Tuesday, President Donald Trump launched a trade war against America’s three biggest trading partners, imposing 25% taxes, or tariffs, on Mexican and Canadian imports, though he limited the levy to 10% on Canadian energy. Trump also doubled the tariff he slapped last month on Chinese products to 20%. 

Small businesses may see price hikes

The tariffs can impact small businesses in several ways, Kent said, with some operations, like restaurants, likely to experience price hikes first.

“The restaurants will probably feel it the quickest because the ingredients that go into what they sell is going to see an increase within a few days,” he said.

Pointing to items like avocados from Mexico, Kent said because produce doesn’t have a long shelf life, they need to be imported quickly and more often, meaning eateries are likely to feel the pinch soonest.

“Restaurants will start to see those prices rise pretty quickly,” he said.

The impending tariffs and recent rhetoric about Canada led to negative perceptions about U.S. products and reduced sales for Bedgear, a Farmingdale-based manufacturer and retailer of mattresses, pillows, sheets and other bed products, said Eugene Alletto, the founder and CEO.

The company’s products are sold online and inside other retailers’ stores in the United States and other countries, including about 500 stores in Canada and 600 in Mexico, he said.

“Retailers that carry our Bedgear products up there [in Canada] love our product. But ... now ‘Made in America’ means, like, ‘Oh, you want to take us over and make us a 51st state,' ” he said, in reference to Trump’s comments that Canada should become part of the United States.

Founded in 2008, Bedgear has two manufacturing facilities in the United States — in Utah and South Carolina — and two in Asia, in China and Vietnam.

The tariffs have reduced the number of products Bedgear is selling wholesale because those stores don’t want to pay higher prices, even if it means passing the cost increases onto their customers, Alletto said.

“We’re already seeing a pullback by our retailers up there [in Canada], saying, ‘Hey, we love you. But until this thing gets sorted out, we can’t just accept a 25% tariff on what we’re bringing in. We want you to subsidize that,’ " said Alletto, adding that he will increase production in his Asian factories and ship the goods to Mexico stores to avoid some U.S. tariffs.

Impact on auto industry 

Dagger said in the lead-up to Monday, his dealerships saw a noticeable uptick in foot traffic, normally a good thing for any dealership. But the veteran auto seller said he’s concerned customers were trying to lock in prices now before tariff-induced price hikes kick in.

Some Toyota vehicles, including all Tacoma pickup trucks, are made in Mexico.

“The biggest challenge for the automotive industry is the fact that it’s a very high-end, high-dollar business,” Dagger said.

“If the deli guy raises his prices 30 or 40 cents, it makes a difference, but not like when someone looks at a car, comes back in two months later, and the same car is $2,000 more,” he said.

The auto industry is a global economy, with cars being made with parts from all over the world, said Mark Schienberg, president of the Greater New York Automobile Dealers Association, a Whitestone, Queens-based trade group that represents 425 new-car dealers.

“When we see tariffs on U.S. trading partners, where a lot of those automobile supply chain comes from, it only potentially raises the price of these vehicles. And for the average customer, who needs to afford to buy a vehicle, that can have a major impact,” he said.

In 2023, the United States' biggest Mexican import category was cars, parts and engines, which accounted for $173.6 billion, according to the most recent annual data from the U.S. Bureau of Economic Analysis.

The United States' biggest import category of goods from Canada was industrial supplies, including petroleum and petroleum products, accounting for $219.7 billion, while the biggest imports from China were consumer goods, excluding food and automotive, which accounted for $210.2 billion.

The National Retail Federation, American Apparel & Footwear Association and other business trade groups have opposed the tariffs.

“Tariffs are just one tool at the administration’s disposal to achieve a secure border, and we urge it to explore other options to accomplish the same goals. As long as these tariffs are in place, Americans will be forced to pay higher prices on household goods," David French, executive vice president of government relations at the National Retail Federation in Washington, said in an emailed statement Monday.

With AP