Southern California’s businesses took a collective breath on Friday, pondering their next steps and potentially cheaper inventories, after the U.S. Supreme Court struck down sweeping tariffs imposed by the Trump administration.
Before they could consider a lot of savings, President Donald Trump was threatening a global 10% tariff to replace the hundreds of tariffs the court said were imposed illegally.
Some experts and business owners interviewed early Friday expect a rush to place orders on everything from lumber to stainless steel before the buying opportunity window closes.
“So much of our soft timber that goes into homes comes out of Canada. So, this would actually lower the cost of goods and services for that L.A. rebuild component,” said Peter Tateishi, chief executive of the California chapter of the Associated General Contractors of America in Sacramento. “This will put pressure on us to start moving quickly, which is good. We have the capacity to do that,” said Tateishi.
Main street blues
Main Street small businesses were somewhat optimistic about the ruling.
Andrew Flores, president of the family-run Independent Forge Inc. in Orange, is expecting more orders by aircraft vendors who need machine work. His metal forgery makes aluminum parts for aerospace giants Boeing and Airbus SE.
“We’re weathering the storm, and we’re still here to support vendors,” said Flores. “I have a feeling that we’re going to see, in a very short term, an influx of work from people who want to get items passed through the supply chain before another (tariff) ruling comes out.
Also see: California builders warn of price hikes should Trump tariffs begin Feb. 1
Meanwhile, other businesses that struggled to digest the tariffs in the past year are taking a wait-and-see approach on whether they’ll see price relief.
For Luis Sardinas, co-owner of the Potting Shed in Orange’s Historic downtown plaza, the tariffs have had an across-the-board effect on plants, pots, soil, candles and houseware items.
In the past year, he’s seen a K-shaped economy develop, in which one side of thrives while the other lags.
“What we see are people who have money, and can spend it. But there are other people who are watching their budgets,” Sardinas observed. “In the past, things were more steady. People are definitely watching their budgets where we didn’t see as much of that in the past.”
Tariffs have touched everything in the store that he runs alongside partner Jack Carlisle.
He cited a line of candles they sell from Irvine-based Voluspa that were hit by price increases from the tariffs. It wasn’t the wax that cost more but the jars that came from China. And chocolates they sold also saw price hikes thanks to a spike in price for imported cocoa beans used in the candy.
“Our plants we sell are grown locally, but the mulches and soils have components that come from Canada. Even the plastic containers that they are grown in are imported from China. We adjusted our prices where we can, and vendors did the same,” Sardinas said.
He doesn’t know how the ruling will change pricing on products at his store.
“We price everything based on what we pay for it. If the price goes up, our prices get impacted. I’m keeping my fingers crossed that there is some pricing relief on the horizon — but we’ll see.”
Markus Hayman, a manager with Huntington Hardware along Holt Avenue in Pomona, said he’s doubtful prices will fall as a result of the ruling.
Huntington is a family-run door hardware distributor that began selling handles, door knobs, hinges, kick plates and other products in 1954.
“Once pricing is increased, it never goes down,” said Hayman, noting that his store absorbed 3% price increases before last year’s tariffs. Now they’re ranging between 6-12%.
“Tariffs have inflated everything,” he said. “There’s no way the suppliers will reduce the cost of their products and pass it along in savings. I’ll believe it when I see it.”
‘Sound and fury’
Todd Tomalak, a Southern California building products adviser with Zonda Home, sees challenges ahead with “uncertainty in prices” for the residential repair and remodel spending market.
The court’s ruling contains a lot of “sound and fury,” signifying there is “still quite a bit of leverage” that can be pushed by the Trump administration to raise and control prices through anti-dumping duties in Section 232 of the Trade Expansion Act of 1962, according to Tomalek.
This week Tomalak was at the international builders’ show for the National Association of Home Builders in Orlando, Florida, where he hobknobbed with manufacturers, many of whom see challenges ahead for residential repair and remodel spending, a market he predicts will generate $1 trillion a year in revenue.
Companies that compete in this market range from Kohler Co., which makes plumbing, kitchen and bath fixtures, to US LBM, which runs a network of lumberyards, distribution centers, kitchen and bath showrooms, hardware stores and truss manufacturing plants.
“A lot of these manufacturers are in a tough spot,” Tomalak explained, citing what he heard from manufactures at the convention. “The builders are leaning on their suppliers, and I talked to some of the largest manufacturers, like leaders in their category — many of them are experts at navigating tariffs — and they were absolutely feeling the impact of tariffs and trying to pass those costs along,” he said.
“Now it looks like a little bit of reprieve.”
