For Colorado business owners Travis Campbell and Jason Sharpe, what tack the next president of the U.S. takes on trade is of the utmost importance. The prospect of significant increases in tariffs across the board is making both of them anxious about what will unfold after Tuesday’s election.
“We are a little nervous about the long-term implications of this election,” said Sharpe, co-owner and CEO of Namaste Solar in Boulder.
Campbell, owner and CEO of Eagle Creek, a travel-gear company based in Steamboat Springs, said if tariffs are raised, the costs for businesses and consumers will increase. If the higher tariffs are added to the existing 17.6% to 20% duties on his goods, “I would call it catastrophic.”
Business owners and industry representatives say they have not heard many specifics from Democratic presidential candidate Kamala Harris on tariffs. However, at a campaign rally in October, Republican candidate Donald Trump said tariff “is the most beautiful word in the dictionary.”
The former president raised tariffs while in office to spur domestic manufacturing and has proposed universal tariffs of 10% to 20% and at least 60% on goods from China if he wins another term. Trump has suggested that besides encouraging more manufacturing in the U.S., tariffs could raise revenue for domestic programs such as child care and pay for tax cuts.
But many economists have warned that the kinds of tariffs Trump has talked about would boost costs for consumers and U.S. businesses, increase inflation and could set off trade wars with other countries. Tariffs don’t apply to foreign countries, according to economists, but to the businesses that import the products and the costs are typically passed along to consumers as higher prices.
A 10% tariff on most imports and 60% on goods from China would cost a typical middle-income household about $1,700 in higher costs annually, according to an analysis by the Peterson Institute of International Economics, a nonpartisan research organization.
Among the products the Trump administration put tariffs on were solar panels. Sharpe of Namaste said his company was in the final stages of a construction project when the increases hit. The price of the solar modules the company was waiting for went up by hundreds of thousands of dollars.
“As a small business, we’re in the middle. We’re halfway done with construction. We have a project we sold. The manufacturer just passes the tariff onto us, so we just have to eat the increased cost and lose profit on the project,” Sharpe said.
Sharpe understands the idea behind the tariffs is to invigorate more manufacturing in the U.S. and perhaps penalize China for its trade practices.
“But the companies actually hurt by tariffs are the small businesses,” Sharpe said. “They’re employing Americans and doing good work in the U.S.”
Sharpe said the tax credits in the federal Inflation Reduction Act and the incentives in the CHIPS and Science Act have done far more to stimulate the domestic manufacturing of solar equipment, cars and other items than tariffs. Higher tariffs coupled with a rollback of the incentives “would be devastating,” he said.
Companies have announced $154 billion in investments for U.S. factories to produce clean energy technologies since the IRA passed, The New York Times reported.
The Biden administration has maintained most of the Trump administration’s tariffs on China.
“I think Harris has been less clear about what she would do, but it sounds as if she would keep existing tariffs in place and perhaps impose more tariffs also,” said Ken Simonson, chief economist for the Associated General Contractors of America.
The organization, which has 28,000 member companies and a couple of Colorado branches, is concerned that higher tariffs will push up the price of construction or cause owners to cancel projects. Simonson said higher tariffs will likely lead U.S. manufacturers to increase their prices, which means Americans could end up paying more for housing and communities might have to put off infrastructure projects.
“To put it very simply, tariffs are taxes,” Simonson said. “Consumers are going to pay those in terms of products.”
Campbell of Eagle Creek worries about the impact of higher tariffs on his travel gear business as well as the lapse of a trade program intended to encourage U.S. businesses to move manufacturing to developing countries. He has joined efforts by the Boulder-based Outdoor Industry Association to urge Congress to renew the Generalized System of Preferences program, or GSP, which expired in December 2020.
The GSP has received bipartisan support since its start in 1975, Campbell said. The program eliminated duties on thousands of products from 119 designated countries. Campbell bought Eagle Creek after Denver-based VF Corp., a global footwear and apparel maker well-known for its outdoor brands, decided in 2021 to sell it.
Campbell, who used to work for VF, and his family moved the business to Steamboat Springs and “doubled down” on their focus on adventure travelers. The company’s business model was upended when the GSP program expired and tariffs on imports went from zero to more than 17%.
“Like lots of manufacturers, that’s caused us to pass some of those costs onto our consumers,” Campbell said. “But it was such a big swing we didn’t feel we could pass it all onto our consumers, so we’ve just been far less profitable.”
As a result, Eagle Creek’s ability to hire people, invest in the community “and all the good things we want to be doing with the business,” are affected, Campbell said.
Eagle Creek sells its products around the world and employs 30 people. Campbell said if the trade program isn’t renewed and higher tariffs are imposed, the company will have to make some hard choices.
“We’re in an economic cycle where I don’t think a lot of businesses feel like they can pass their cost increases onto their consumers. We feel that way,” Campbell said.
The outdoor industry was hit hard when the Trump administration hiked tariffs on products from China in what it said was a fight against unfair trade practices. Kent Ebersole, president of the Outdoor Industry Association, said the organization estimated that since the GSP expired, the industry had paid $1.7 billion in additional tariffs by this spring.
“I would just like to see no matter who’s elected get back to the spot where there’s bipartisan support for the companies in this industry, many of which are in the state of Colorado,” Ebersole said.