Trump’s tariffs are estimated to cost Colorado $1.4 billion a year. Consumers could feel the pain soon.

Sandra Payne, president of Denver Concrete Vibrator, figured her company was already paying some sort of tariff because some items her company needs came from China, Canada and Mexico, where its supplier sources steel, aluminum, rubber hoses and a variety of other items the family-owned company uses to build equipment used to strengthen concrete. 

But she never knew how much. Tariffs hadn’t shown up on a bill — until Monday. 

“It was perfect timing,” Payne said during a small business panel on tariffs hosted by the World Trade Center Denver on Tuesday. “It was 25% for this product. The product itself was $3,100. The tariffs are $675. … We don’t want to raise our prices all the time. We’ve raised them a couple times in the last couple of years. But margins are tight and we will be forced to deal with this somehow.”

Those unexpected costs can really derail a small business, especially those that couldn’t order an oversupply before threatened tariffs kicked in, or find local suppliers. “We always tried to source locally, and certainly domestically, but after COVID, that all changed as so many businesses went away,” she said. 

The $675 is just part of an estimated $1.4 billion in new tariffs Colorado small businesses could pay as part of the Trump administration’s 20% to 25% tax on imports from Canada, Mexico and China, according to an analysis by Trade Partnership Worldwide, an economic research firm. The three countries made up nearly half of Colorado’s $17 billion in total imports last year. And that doesn’t include the impact of potential retaliatory tariffs from the same countries.

Local business owners shared their stories Tuesday about the challenges they’re already facing and how the added costs will have to be passed on to the end users, who are often consumers.

Jeremy Petersen, who cofounded Identity Pet Nutrition in Windsor with his brother in 2018, said they had initially set out to find a local manufacturer to help them craft high-quality pet food but couldn’t find one in the U.S. that met their standards. They found one in Quebec, Canada, and now sell pet food in all 50 states. But even though looming tariffs hadn’t started, the company was hit with negative repercussions back in January. 

“We’ve lost lines of credit and banks not wanting to work with us because of the cross-border risk,” Petersen said. “Our line of credit was cut in half.”

A week ago, Krimson Klover Chief Operating Officer Gail Ross was trying to figure out how to cover a 10% tariff increase on the sweaters it imports from China. The Boulder outdoor clothing company would cover one-third of the new cost, ask its factory to cover one-third and pass the remaining third to customers. 

Then the Trump administration added another 10%, so Chinese imports are now taxed at 20%. That essentially adds $29 per sweater, which already has a 32% import duty plus the 7.5% sweater tariff implemented during the first Trump administration. In a slide she shared, the same sweater that cost $210 last week would sell for $239 at retail. 

“When you’re staring at a 20% tariff, we can take a little of that, but not even close to one-third. Our factories also can’t really absorb a third of 20%,” Ross said. “We’re still grappling with what we need to do. … We have to see what some of our competitors do as well. Because if we’re the only one who goes up a ton, that’s going to probably cause cancellations (from customers). But if the whole industry goes up, then everything goes up, which is probably what’s going to happen. But it’s kind of hard to bet on it.”

Tariffs can help and hurt different parties, said Kishore Kulkarni, an economics professor at Metropolitan State University of Denver. It really depends on what is being taxed. Tariffs on imported cars could help the American automaker, if auto parts needed to build cars in the U.S. have lower tariffs or none at all. But when all imports are taxed, the costs add up and can hurt local manufacturers, producers and small businesses. 

Either way, consumers pay for it and they’ll probably be higher, he said. Tariffs in the first Trump administration that started with talk of 30% ended up being 10% or less.

“Consumers are going to be hurt, producers are going to be hurt,” Kishore said. “I think all of us are going to pay the price. … This time the threat is real.”

In 2019, Ross said she testified with 300 other companies in front of U.S. trade representatives about the impact of high tariffs on Chinese imports. 

“That was a whole different story,” she said. “People got to testify. The trade representative got to sit and think about what the best answer was. And they went from 25 to seven and a half (on clothing). This is a very different thing because it doesn’t seem to have any input from the trade representative and Congress. It strictly seems to be up to the administration.”