Trump's tariffs could hit Chicago businesses hard
Trump's tariffs could hit Chicago businesses hard
President Trump?s newly imposed tariffs are expected to have widespread economic effects across the country, including in Chicago.
CHICAGO - President Donald Trump’s newly imposed tariffs on imports from Mexico, Canada, and China are expected to have widespread economic impact across the United States.
In Chicago, local businesses that rely on imported goods are bracing for potential price hikes as they navigate the ongoing trade war.
What we know:
The tariffs add a 25% tax on imports from Mexico and Canada and double tariffs on Chinese imports to 20%.
The move affects a broad range of goods, from cars and groceries to leather products and other retail imports. Chicago businesses, particularly those dependent on imported goods, could see their costs rise.
Alcala’s Western Wear is a family-owned store in Chicago’s West Town neighborhood that has specialized in Western fashion since 1972. The shop sources much of its inventory—cowboy boots, custom-shaped hats, belt buckles, bolo ties, and more—from Mexico, Canada, and China.
"We're curious to see where this is going to go," said Mani Alcala. "With it being an increase in leather goods themselves, and half of the Western world is leather. Bringing them across the border and shipping them and all, it definitely has increased."
Alcala, who is an owner and manager of the store, said the company is already discussing strategies with suppliers to manage the rising costs.
"The last thing we want to do is make our customers feel affected by it," Alcala said. "We have had conversations with a lot of manufacturers in figuring out ways how they can help us at least with the cost because they understand they are also going to be affected by it as well."
Alcala’s Western Wear was founded by Luis Alcala who came to the U.S. from Mexico in the 1940s. His grandson, Mani, is among the Alcala family members who work at the niche boutique.
"It’s never a good thing when we have to increase prices," said Alcala.
Just as the shop has weathered changing fashion trends—they will weather this, too.
"The early 80s and 90s were the highlights, that’s when Western wear was really taking off," said Alcala. "I think they’re right when they say history repeats itself. Up until now, it's coming right back!"
According to the Illinois Department of Commerce & Economic Opportunity, the state ranks 4th among all 50 states in both imports and exports from Mexico.
What we don't know:
It remains unclear exactly how businesses will pass these increased costs on to consumers.
While some may absorb part of the cost, others could be forced to raise prices, potentially affecting customer demand.
The long-term impact on supply chains and the broader Chicago economy is also uncertain.
What's next:
The tariffs have sparked criticism from U.S. trading partners, with Mexico and Canada signaling they will impose retaliatory tariffs of their own.
Meanwhile, Illinois lawmakers, including U.S. Sen. Dick Durbin, have voiced strong opposition to the tariffs.
Durbin slammed the tariffs during a Senate floor speech on Tuesday morning.
"The president has spent his time trying to systematically dismantle the federal government—creating rifts with our closest allies and now imposing destructive tariffs on our biggest trading partners," Durbin said. "Tariffs are taxes, they are taxes that the consumers of America will have to pay. These levels of concern have not been seen since the trade wars in President Trump’s first term, and as Americans already struggle under the weight of high housing costs, these tariffs will make things worse."
Durbin added that tariffs "will hurt American consumers and supply chains, and undermine American manufacturing."
As the trade dispute unfolds, Chicago businesses will continue assessing the impact and adjusting their strategies.
Other industries that could see a spike in prices include lumber, steel, and aluminum. Craft brewers are even raising concern over the potential for a hike in beer prices if the cost of cans goes up.