Small businesses, including those in Tahoe, grapple with tariffs

The merry-go-round of on-again, off-again tariffs is leaving Lake Tahoe businesses dizzy.

Some on the South Shore  already feeling the financial hit, while others are in wait-and-see mode.

“We have already seen an 8 percent price increase in distributors’ tires. We were just sent an email not too long ago that there is going to be another 8 percent hike on tires here soon in the next month or two,” Kenny Selby, manager at Ken’s Tire Center in South Lake Tahoe, said in late April. “We are getting hit pretty hard based on what’s going on with the tariffs.”

The problem is most tire manufacturers are outside of the U.S.

“We are trying to soften the blow as much as we can,” Selby said. “Inevitably we have to pass some of the prices along. We try to be as fair as possible.”

Ken’s Tires is also seeing auto parts increase. The shop has limited space so it’s unable to stock up on much inventory at cheaper prices.

Tires are one of many items at Ken’s Tires in South Lake Tahoe that are sourced outside of the United States. (Image: Jaime Borge)

Taking a hit

Gary Bell, owner of Sierra Ski and Cycle Works, also has a space problem. It’s impossible for him to purchase a bunch of bikes in anticipation of tariffs.

During an interview April 18 Bell opened an email from a distributor that said prices would immediately be going up 15 percent, and three days later to expect a 25 percent increase on everything else.

That company deals with electronics—things like lights, heated gloves and vests.

“We have gotten messages from different suppliers that they are expecting some changes in prices. Some of them have admitted to probably 35 percent increases, but they don’t know yet,” Bell said.

He would like to buy U.S. made items, but few exist for his business and those that do are ultra expensive.

Bell isn’t convinced the tariffs will translate to more manufacturing here.

“You hear people saying it’s going to bring manufacturing to us,” Bell said. “The truth is American workers don’t want to do that small, tedious work that would make American manufacturing come back.”

Because most of Frank’s TV and Electronics’ jobs are custom it’s hard for owner Frank Giardini to stock up on things.

The problem with electronics, he said, is that nothing is made in the United States. Distributors have warned Giardini that increases are likely this spring.

Accurate Audio Visual wouldn’t provide specifics, but admitted the business is affected because “everything comes from China.”

South Shore Glass and Door has received notification of a 5 percent increase on hardware. However, much of their product comes from the Midwest.

“I’m expecting it will trickle into other products like windows and things. Even though they produce some of the material domestically, the components that make up  doors and things have tariffs,” said Alan Russell, former owner who now does quotes and bids for his brother and sister-in-law who own the South Tahoe store.

Russell believes tariffs are a good thing, even if there might be financial pain at the get-go.

“I believe we need to do (the tariffs) because it has been unfair to America for years,” Russell said. “We can’t just be a consumer nation. We need to make our own products here and be able to export on equal terms. It may be hard for people for a while, but I think it will ultimately pay off.”

When Elliott Graham, owner of Busby Cellars in Somerset, puts in his next glass bottle order he expects the invoice to be more than he’s used to. That product comes from China.

While corks for the winery come from Portugal, so far that is less of a worry based on what countries are affected by tariffs.

Graham, though, has other concerns to factor in. If a recession hits, which some say we are already experiencing, luxury goods are one of the first things to go. Wine falls into that category.

The El Dorado County winery is also anxious if there will be employees, who are often immigrants, for harvest and summer work.

Sports Ltd. is bracing for increases throughout much of the store, with mountain bikes already being hit.

Herbs are bugaboo product at Grass Roots Natural Foods because so many are not grown in the United States.

“There are some people who base their whole health on that herb section. We will try to balance out prices with others that are less expensive,” Tori Bowler, general manager, said.

She said it’s too early to tell if people’s buying habits will change.

“We got a notification (April 17) that as of midnight everything that is not from the U.S. is going up between 9 and 11 percent, and things sourced from China, which is most of our teas, will be doubling. Bulk herbs are up 145 percent,” Pete Fink, who does the bulk herb buying for Grass Roots, said.

Clyde’s Coffee Roasting Company in Stateline said tariffs just add to a spreadsheet filled with price spikes that started in 2020 with shipping during the pandemic.

“I think the focus on tariffs has just made everyone realize that coffee prices as well as all food supplies have increased 60-100 percent in many cases for most businesses since 2021,” owner Marlo Quillin said. “As a business owner, we cannot pass down that kind of increase to our customers. The tariffs are a minor concern of 10-15 percent versus the 60-100 percent over the past four years. We’ve been making adjustments to our business model as any business must do to keep up with the changing times.”

Facts and uncertainty

One of President Trump’s main reasons to impose tariffs is to reduce trade deficits. In 2024, the deficit with China was $295.4 billion. China, though, has retaliated with its own tariffs.

California imports more from China than any other state and is the second largest exporter to that country. The state has filed a lawsuit in federal court challenging Trump’s tariffs.

It’s those imports that are impactful to Tahoe companies. Car parts, hardware, clothing, toys, food and so much more are all subject to new tariffs.

Sometimes a business will absorb the expenses, sometimes they are passed onto the consumer, sometimes they are shared.

What is unknown is how consumer spending will change. Will people drive longer on worn tires? Will they forego a certain herb? Will they wear that ski jacket another season? Will they skip the guacamole?

If people are spending less, that could mean businesses have to lay off people. This means the unemployment rate goes up.

If people are spending less, that means less sales tax revenue for jurisdictions—which in turn can affect services for the community.

The Commerce Department on April 30 released figures showing the U.S. gross domestic product, adjusted for inflation, declined at an 0.3 percent annual rate in the first quarter of 2025. This comes after there had been strong growth at the end of 2024.

It could be worse going forward because several businesses were actually spending more in the first quarter to have inventory on hand before tariffs took hold, and consumers did the same—especially when it came to buying big ticket items like vehicles and appliances.

Gavin Smith works on a door at South Shore Glass and Door in South Lake Tahoe. (Image: Vicki Paschal)

Cautiously optimistic

When it comes to product, Round Hill Jewelers owner Tim Rubsam is not feeling any pain from tariffs. The economic uncertainty is actually helping him because he is a gold broker.

“When the market goes up or down people are selling. I don’t care if they buy or sell I make money if they are coming or going,” Rubsam said.

As for the tariffs, he said, “It appears a lot of noise. Personally it has not impacted me. I think if there is a road block, you take another road.”

While Nathan Minnis, store leader at Holiday Market in Meyers, doesn’t actually set the prices—that’s done at corporate headquarters in Shasta County—he’s not too worried today.

“With me eyeballing things I haven’t seen anything jump up other than a few pennies,” he said.

It was cost prohibitive because of tariffs to reorder one item he wanted—a toy bird that makes noises.

Jin Jung, general manager of Jim Bagan Toyota in South Lake, said customers are asking about tariffs, but has no information to share with anyone.

“Toyota has no information at the moment about how it’s going to affect us,” Jung said. “We have a person working directly with the Trump administration regarding this tariff information.”

Crazy Good Bakery and Café in South Tahoe has been contending with price increases well before Trump took office, and doesn’t see tariffs being an issue any time soon.

Alpine Carpet One has seen shipping costs increase a bit, but so far tariffs are not a factor.

“We are definitely in the waiting period right now. Probably nothing will be certain for another six months to a year out,” Paul Friederici, owner of the South Lake Tahoe store, said.

He said some of the larger mills have the ability to shift more manufacturing to the U.S. Most carpet comes from the U.S., while other products are a mix of U.S. and foreign made.

Economists are predicting it won’t be until this summer or later in the year that the true impact of tariffs are in full effect.

Note: A version of this story first appeared in the Tahoe Mountain News.