Trade Tariffs Surge in Tennessee: Business Owners Struggle to Cope

Trade Tariffs Impact Tennessee Businesses as Costs Surge In September, Greg Asadourian, a businessman from Tennessee, received alarming news from the U.S. Department of Homeland Security. An invoice for his shipment of materials from China included an unexpected 80% tariff, a considerable increase that has left many businesses in turmoil. The imposition of tariffs has escalated since President Donald Trump initiated a global trade conflict in February. As part of this trade strategy, numerous tariffs have been introduced, modified, or delayed, creating a challenging landscape for business owners who are uncertain about the future of their operating costs. Trump stated that these tariffs aim to encourage consumers and businesses to prioritize American-made products. They also serve as leverage in negotiations with foreign leaders to reduce tariffs on U.S. goods. “We will take in trillions and trillions of dollars and create jobs like we have never seen before,” Trump remarked to Congress ahead of the initial tariff hikes. “Tariffs are about making America rich again and making America great again.” However, many economists, including those at Middle Tennessee State University's Business and Economic Research Center, have raised concerns about the negative effects these tariffs could have on the Tennessee economy. Business leaders report that they are starting to feel the ramifications of these tariffs after depleting their existing inventories. Asadourian, whose company primarily sources materials locally, still relies on international shipping for a small portion of his supplies. For a recent order worth $14,413, Allvan had to absorb nearly $12,000 in tariffs, an unsustainable burden for many businesses. Compounding the issue, a fire at one of the few remaining aluminum factories in the U.S. has left many manufacturers, including Allvan, scrambling for new suppliers. “But the world marketplace is off limits,” he emphasized. “For the little amount that we buy offshore, it’s becoming a lot to manage, and it’s not China paying for these tariffs, it’s me.” Recent surveys from the University of Tennessee Boyd Center for Business and Economic Research highlight the widespread impact of tariffs on state businesses. Approximately 76% of business leaders indicated they are facing adverse effects due to the tariffs, and about half reported transferring some of these costs to their customers. Business owners do have a few strategies to navigate the tariff landscape beyond simply raising prices. These methods may include absorbing the costs internally or negotiating with foreign suppliers for better pricing in light of the tariffs. However, many companies reliant on international markets may find it increasingly difficult to avoid passing costs to consumers. “The administration was very vocal about preferring that companies not pass those costs onto their customers,” Bruce noted. “Now we’re seeing companies that depend heavily on the international markets have no choice.” Amid these fluctuations, the cost of groceries has also been rising, with food prices increasing by 0.6% from July to August, the largest monthly increase since October of the previous year, according to the U.S. Bureau of Labor Statistics. While inflation and supply chain issues play roles in these trends, tariffs significantly impact certain imported goods. Price hikes have been observed across various products, from coffee to fresh produce, largely influenced by the financial burden of tariffs on imports. Despite these challenges, business leaders in Tennessee retain a generally optimistic outlook regarding the state’s economic prospects. About 69% of respondents in the Boyd Center survey believe the state is moving in a favorable direction, attributing their confidence to strong investments and effective government leadership. “We’ve attracted a large number of new businesses and new residents to the state over the last five to 10 years,” Bruce added. “There’s no sign of that changing in the near future.” For more information, you can access the original article <a href="https://www.tennessean.com/story/money/2025/10/02/tariffs-tennessee-business-economists-trump-groceries/86334785007