Ski shops fear new Trump tariffs will be knockout blow for industry

Kjerstin Klein feels like she's jogging in quicksand.

As the co-owner and chief communications officer of Willi’s Ski and Snowboard Shop in Pittsburgh, Pennsylvania, Klein is grappling with both Wall Street's encroachment on an industry that has long been the domain of Main Street entrepreneurs and a warming climate's shrinking of the winter business season.

“We’re being hit on a lot of different sides,” Klein told the Washington Examiner. “Climate change is real, and our businesses, the mom-and-pop side of things, are the canary in the coalmine. We’re already pretty well strapped.”

Forthcoming 10% tariffs on $300 billion in Chinese imports, she said, could be “the straw that breaks the camel’s back." Her family-owned business, which was started by her father-in-law in 1970, has grown to boast between 200 and 300 employees across five locations, but the economic and weather stressors are taking a growing toll.

“It’s a boxer in the ring,” Klein said“It’s not the first roundhouse that gets him.”

Klein, like other small outdoor-industry business owners, has spent the summer worrying whether the products Willi’s sells would be swept up in President Trump’s escalating trade war with China, and abrupt starts and stops in negotiations between Washington and Beijing have made planning nearly impossible.

Trump suggested in June that he would impose 25% tariffs on Chinese imports not covered under previous duties, but backed away after a meeting with Chinese President Xi Jinping at the Group of 20 summit in Japan.

The relief for businesses proved fleeting, though. Trump accused China this month of reneging on its G20 promise to purchase agricultural products from the U.S. and halt the sale of the addictive opioid fentanyl, and said he would respond with a “small” tariff of 10% on $300 billion in Chinese goods beginning Sept. 1.

Beijing was quick to retaliate, directing state-owned companies to halt purchases of U.S. crops. The Chinese yuan fell to its lowest level against the dollar in more than a decade, and the Treasury Department labeled China a currency manipulator.

Trump said that proves “Americans are not paying for the tariffs — they are being paid for compliments of China.”

But as Klein prepares to open the doors of her five stores for the winter season, she and other small business owners can’t help but disagree. Since Trump made his announcement, she has been working the phones to figure out whether her vendors will absorb the full 10% tariffs or raise the prices they charge Willi's and other shops.

"The complication comes in the timing and the lack of forethought, the lack of certainty," she said. "This is the third time we’re back and forth with things, so we have no way to strategize."

For big retailers, cutting workers or hours can cover the cost of the tariffs, but that’s not a viable option for Klein.

“My entire family works in the business,” she said. “I’m not going to tell Mom she can’t work. What am I going to do for people who have worked for me for 30 to 40 years, say, ‘Thanks, I’m going to cut your hours?'’’

Faced with the prospect of charging higher prices, Klein has considered adding a “tariff” line on merchandise tags “so people can understand where this is coming from.”

“In western Pennsylvania, if I’m going to charge people 10% more, do they have 10% more of discretionary income?” she said. “This isn’t a tax on China. It’s an attack on the United States.”

Klein’s stores open in just two months, and she already has a warehouse of merchandise ready to hit the shelves.

While those items will avoid the 10% tariffs, Klein said she is “scrutinizing records” to determine what hasn’t yet shipped from China and which goods are likely to incur the duties when they arrive. She’s particularly worried about specialty products from smaller manufacturers that can’t absorb the levies like larger, better-known competitors can.

“If we force them to absorb the 10%, that saves me, but I can guarantee you they’re not going to be in business next year,” Klein said. “They’re on a real knife edge.”

One of those manufacturers, Krimson Klover, a women’s apparel company based in Boulder, Colorado, warned the Trump administration in June that it has no good options for dealing with the duties.

Raising prices on dealers, COO Gail Ross said, would likely cause them to cancel or reduce orders, and absorbing the tariffs “is not sustainable for us as a small, lean business.” Additionally, moving production out of China would be costly, and other factories don’t have the capacity to make Krimson Klover’s products, she said.

“This is just a very haphazard approach to the situation,” said Chris Steinkamp, director of communications for Snowsports Industries America, a trade group representing the U.S. winter sports industry. “We don’t disagree that an equitable situation needs to be had with China and this has to be fair, but to put the onus on our retailers and consumers doesn’t seem like it’s going to accomplish what needs to be done.”

Of the products Willi’s sells, Klein estimates the vast majority are imported from China, while equipment like skis and ski boots are primarily made in Europe.

Trump has repeatedly advised companies worried about the impact of his tariffs to simply move manufacturing from China to the U.S. But business owners such as Klein believe that's an overly simplistic suggestion that fails to recognize the planning and capital required for such a move.

It takes between two and five years to shift production to an existing factory, she said, and many major companies whose products were hit with the 25% duties Trump imposed earlier this summer have already bought factories elsewhere in southeast Asia.

“We live in a global economy. There’s just no two ways about that anymore,” she said. “That’s why the reverberations don’t hit Wall Street as much as they do Main Street.”

Despite the legwork that would go into such a change, some companies are exploring making the move, Steinkamp said. “The winds could shift next week, but you have to plan for the worst," he added.

Moving manufacturing to skirt the tariffs and avoid the will-he-or-won’t-he uncertainty regarding Trump, may be beneficial for businesses in the long-term. But with Klein busy preparing for a preseason sale and getting ready for the arrival of customers in a few weeks, that option doesn’t alleviate the pain looming in the near future.

“We open in October,” Klein said. “When I open those doors, I have no idea whether we’re going to be able to stay in business.”

Credit: Melissa Quinn