‘How are we going to survive that long?’: Spokane-area companies adjust to ‘inefficiencies’ of tariffs

Tom Barany, part-owner of Spokane’s the General Store, was at the Toy Fair in New York in March looking at the newest and greatest offerings when, on the second day of the event, President Donald Trump’s 25% tariffs on Canada and Mexico and a 20% tariff on China took effect.

“The tone became a bit subdued. There was a lot less enthusiasm,” Barany said. “On day one, the vendors were willing to lock in orders. On day two, they wouldn’t commit.”

Trump has raised and lowered tariffs dozens of times since he took office. The current level is a base of 10% against all countries and is sometimes higher depending on the goods, such as aluminum or steel. The 145% tariff on China was lowered earlier this month to 30% for most things for 90 days.

Those changing targets have left national and local companies scrambling to respond, leading to confusion, higher costs and uncertainty about how to proceed.

In the meantime, the administration has attacked any announced price hikes, including a reported plan by Amazon to list the cost of tariffs on the price of items it sells online.

“This is a hostile and political act by Amazon,” White House Press Secretary Karoline Leavitt said last month responding to the Amazon proposal, which was never put in place.

Walmart CEO Doug McMillon said last week that his company would raise prices because of Trump’s tariffs.

The president then responded last weekend, posting on his social media platform, Truth Social, that Walmart should “EAT THE TARIFFS” and “not charge valued customers ANYTHING.”

Trump added: “Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” according to the Washington Post.

In Spokane, owners of the General Store at 2424 N. Division St., founded in 1946, responded to that uncertainty by going on a buying spree.

Owners Bruce and sons, Miles and Tom Barany, dipped into their operating capital and preordered all of the top-selling 75% of items they had sold in 2024 “with the hope that we wouldn’t have to raise prices and hopefully ride it out,” Tom Barany said.

They purchased toys from Mattel, pallets of ammunition and inflatable rafts to last the season. And just this week, the receiving crew unloaded three Ace Hardware trucks filled with items ordered before the tariffs took effect. The store houses an Ace franchise.

“We’ve gotten ahead of the curve with most of our vendors,” Tom Barany said.

But about 95% of the shoes they sell come from China. The store recently got in shipments of Heydude, Brooks and Skechers-brand shoes on which it had to pay tariffs, Bruce Barany said.

“To maintain margins, I won’t say we have been raising prices across the board,” he said. “I won’t say we are having terrific price increases. But, to pull a number out of the air, the overall price increases from Ace is about 3 to 5%.”

Scott Tate, president of Tate Technology Inc., of Spokane Valley, said he wishes he could have afforded to order enough stock for the year, like the General Store, to fill his orders.

Tate Technology is a contractor that builds complete electronic assemblies for customers in the aerospace, medical, military and telecommunications industries. As part of his business, Tate orders nearly all of its parts from Asian countries.

“I call the electronics industry the tip of the spear in terms of these tariffs,” he said. “With the huge tariffs that were levied against China of up to 145%, it affected us the first day it went into effect.”

Hidden costs

Tate said most of the parts he orders are delivered by airplane. In one instance, he ordered some parts from Taiwan only to have Trump raise the tariff on that country to 32% after the part had shipped.

“When the vendor shipped it, there was no tariff,” Tate said. But the 32% tariff was put in place after the airplane had lifted off.

When it arrived in Spokane two days later, the UPS driver refused to hand over the box unless Tate gave him a check for $1,600 to cover the 32% tariff.

“But the day the freight carrier showed up, (the tariff on Taiwan) had gone down to 10%. I turned the truck around twice. On the third time, he said, ‘If you don’t take it, we will return it to Taiwan on your dime.’ I handed him a check for $1,600, which felt weird.

“That’s how quickly it changes,” Tate said. “All of this is disruptive, which means it costs money somewhere.”

Most of the work for which Tate Technology contracts comes from orders that are built and shipped out some eight weeks later. Tate said he buys parts from hundreds of factories worldwide, with about half located in China.

“So right now, we can quote our customers a cost. But I don’t have any certainty that that will be the cost by the time we order, build and ship it to our customers, because the tariffs keep changing,” he said.

Beyond the higher-price confusion, the tariff hikes have bred a secondary issue that has also caused Tate serious problems.

He explained that he pays for an automated computer-search service that can conduct a search of all manufacturers of a needed part.

The service reduces to minutes searches that could take days or weeks if he had to do it manually, he said. Tate gets a list of the item, its cost and how many the company has in stock.

But the vendors have not figured out how to factor the corresponding tariff prices onto their websites. Even though it may be listed as the cheapest part, Tate doesn’t know the actual cost until he’s ready to purchase the item.

“It may have a tariff. It doesn’t tell you until the end,” he said. “So now we have to take all those items and manually go into the website, copy and paste it and add it to the cart and check out. And only then does it tell me what the tariffs are.

“I buy 300 items a day. More than 70% have a tariff. That means I’m looking up 700 tariffs manually a day,” Tate said. “Meanwhile, customers are screaming at us, ‘When can I have my quote?’ This is one of those unintended consequences. What additional inefficiencies does this create?”

It’s a misnomer to believe that the items Tate is ordering from China only face a 30% tariff. The U.S. government has set up myriad categories and subcategories of rates for different items.

For instance, Tate searched for a fiber optic connector. Its tariff from China is 45%. If he wanted to buy a high-definition video display not exceeding 35 centimeters, the tariff is 60%.

“How are you supposed to know that?” Tate said. “Our vendor doesn’t always know.”

Uneven consequences

The National Retail Federation, which represents some of the biggest retailers in the country, has lobbied against the new tariffs, which are not paid by countries but by businesses that import items from those nations and then decide how to recoup that added cost, which boils down to raising prices to customers or absorbing the hit.

“Small and medium-sized businesses will be disproportionately affected by the tariffs, with many saying they will have to raise prices or shut down,” the federation wrote on its website. “Unable to absorb the cost of increased tariffs, small business retailers would be forced to pass those additional costs along to their customers in the form of higher prices.”

Jim Coburn, the general manager of Ziggy’s Home Improvement in Spokane, said it’s unlikely that customers buying lumber from his business would be able to tell any price differences as a result of the tariffs.

“It’s kind of hit and miss on everything,” he said. “Some aluminum out of Canada has seen increases. But we buy a lot of our lumber and plywood domestically. I wouldn’t say overall” the tariffs have had much impact.

The same could be said for Spokane Valley-based Spokane Industries, which was founded in 1952 and has about 100 employees.

Spokane Industries is a foundry that makes heavy-duty chrome and steel parts for rock crushers and other heavy equipment, said Don Riley, who is in charge of inside sales.

Riley said the tariffs have not forced the company to raise prices because the company gets much of its raw materials from other U.S. suppliers.

But Spokane Industries has fielded dozens of inquiries from other companies about what it can do for them, he said.

“They are getting more quotes from us because they do purchase from China. Our prices are usually about 20 to 30% higher than what they pay China,” he said. “They are just trying to figure out if it’s worth it to get it here.”

But those calls have not led to new customers, he said.

“Has business increased? Maybe a little,” Riley said, “but nothing like everybody thinks.”

Tate, president of the electronics company founded in 1992, said he’s not sure how the current tariff hikes are going to make companies turn back to American suppliers.

“We need to take a step back and look at the objective. If you want to build our own stuff and not be reliant on other countries, that’s a great objective,” he said.

Tate has fielded questions about why he doesn’t just buy the parts he needs from American suppliers.

“They don’t understand. There is nowhere else,” he said. “If the objective is to reshore and build things in the U.S., I’m on board. But in the meantime, if there is a tariff on everything I buy, there is a higher price tag on everything I build.”

He estimated it would take hundreds of factories to supply the number of specialized parts he purchases every day. Who is going to spend the money for these factories, and where will they find the employees, he asked.

“If my margin is 10% … and what you are buying from me is 15 to 20% more, at what point do you stop buying it? This is such a big problem, which means it’s going to take time,” Tate said.

“It’s going to take decades. How are we going to survive that long?”