MONTPELIER — According to the Vermont Treasurer’s office, tariffs imposed by the Trump administration will cost Vermont households an estimated $1 billion annually — but how will they impact Vermont businesses?
Last Week, the White House announced a sweeping range of “reciprocal” tariffs that the administration claimed would “free” the U.S. from foreign goods, imposing a minimum 10% tax on all imports and substantially higher tariffs on major U.S. trading partners, including an additional 34% tariff on Chinese goods. Economists across the U.S. and the world have raised concerns that the tariffs, basically taxes on foreign goods imported into the country, will ultimately impact the economy.
Locally, many businesses in Bennington County, including many mom-and-pop establishments, rely on established supply chains that can and do often stretch across the world.
“Trump’s so-called ‘Liberation Day’ is supposed to free America from imported goods, but in reality, it’s just freeing Vermonters from their hard-earned money and hitting low-income individuals the hardest,” said Vermont State Treasurer Mike Pieciak. “Vermonters are already facing an affordability crisis, and the administration just hit Americans with one of the largest tax increases in U.S. history. This will raise costs on families and local businesses and hurt the economy.”
While the economic impact of the Trump tariffs on Vermont is difficult to calculate, the Yale Budget Lab, a non-partisan policy research center, estimates that the Trump tariffs to date, including the new April 2 tariffs, will cost the average U.S. household an additional $3,800 per year. For Vermont’s approximately 279,612 households, that amounts to $1.06 billion in additional costs statewide. For comparison, Vermont’s property taxes increased by about $200 million in FY24, while the State’s sales tax revenue totaled about $700 million that year.
Pieciak claims that while the administration says the tariffs will incentivize domestic production, which, according to the U.S. Bureau of Labor Statistics, can take years to achieve, it will make it harder for small businesses to compete, ultimately hurting all Vermonters.
“Our office has already heard from local businesses that can’t afford this massive tax increase,” said Pieciak. “This isn’t the kind of thoughtful policy that will help grow American industry.”
The Trump administration is pushing the new tariffs as a way to combat the perceived unfairness of global trade policies and as a way of bringing manufacturing back to America and American workers. The administration is wagering that the temporary pain felt in the economy is a worthwhile price to pay to rectify the unfair situation and bring the United States back to its “golden era,” when the country was the world leader in manufacturing.
In the 1970s, 1 in 5 U.S. workers worked in manufacturing. Today, it’s closer to 1 in 12. Most economists agree that turning the current global economy into a manufacturing economy will likely take years if not decades.
According to the Bureau of Labor Statistics, formal trade apprenticeships, a starting point from many manufacturing jobs, typically require four years. Intel, a global manufacturer of computer chips, estimates that building semiconductor fabrication plants can take three or four years or more to complete.
“This will likely affect businesses, and then, thus, indirectly, it's going to affect employees because their jobs will get cut as the economy contracts," says Christopher Macksey, owner of Haberdasher Wine and Provisions, a small specialty shop that recently opened on Main Street in Bennington. Macksey is also a professional financial advisor to the restaurant industry.
“I think the problem is prices are going to immediately go up,” Macksey said. “So, as soon as prices go up, like the basics of economics are if prices go up, demand goes down. When demand goes down, sales go down for businesses, and then they have to cut back.”
Macksey states that everything is globalized in our world, and nothing comes exclusively from one place, so it affects everyone.
“To try even to fathom the effect that this is going to have. You know, it's not like, we're going to turn around, and tomorrow we're going to decide, like, oh, okay, we're going to build this all in America. Ford, Audi, or any of these companies that build things overseas, it's going to take years for them to move all their production here. And so, it'll be disastrous for the economy, and that's what most economists are saying at this point.”
“If I apply this specifically to my shop, all of the countries that are major producers of wine have all been tariffed," he continued. "That increase in price is my margin, so I'm going to have to pass that on to the consumer. And then problem two is that if I decide that I'm going to buy exclusively American wines, or non-tariffed wines. If the world's consuming half a million bottles of wine a month, and the United States only produces 100,000 of it, and everybody turns around and tries to buy American wines because they're cheaper, the demand goes up, and so do the prices for those domestic wines because supply can't turn around, and suddenly decide they're going to produce another 400,000 bottles of wine.”
“If the prices rise because you have to meet a margin to stay in business, at some point, it's going to be priced out for consumers who, unless they have a lot of discretionary spending, might say, ‘let's pass on the wine this week.’ People will simply stop buying.” Macksey concluded. "For a shop like mine and many others, it’s devastating. It makes it close to impossible to stay in business.”
Macksey said that it's a similar situation for restaurants, even smaller, local ones.
“Most agriculture in America comes from Mexico, Canada, or South America,” Macksey says. “Domestically, we don't produce much outside major crops like soybeans, wheat, corn, and other base commodities, which will increase restaurant prices. Because inflation has already increased prices, many people are struggling to go out to eat anyway. Restaurants operate on a 3-to-5% profit margin. There isn't anywhere where they can eat up this expense. They've already eaten up much of their prior profit margin with the previous inflation numbers. I’ve had a number of conversations about restaurants that already had fairly soft demand and are going to just throw in the towel and give up.”
“I know within the jewelry industry, it’s devastating,” said Judi McCormick, a small online jewelry designer and business owner in Manchester. "Most of my components come from all over the world. Pearls from Japan and China and Vietnam, rubies from Madagascar, aquamarines and tourmalines from Brazil, emeralds from Columbia, beautifully faceted gems from India and sapphires from Thailand, coral from Italy, opals from Australia. Tariffs on all of these countries will affect my prices at least a 25% increase, if not more. The sticker shock on jewelry will put many small jewelers quickly out of business."
When asked whether the current administration might have a point about trade unfairness with other countries, McCormick says she understands things need to be addressed but that such a strong shift isn’t the answer.
“Yeah, there are issues that needed to be addressed, but not on such a wholesale level as our current administration has done," McCormick said. "They have spent no time trying to see the smaller picture, how it affects business owners and consumers, instead of just giving these massive threats to an entire country. I think there's a better, more surgical way to do this, to address those problems rather than just blowing things up.”
The mood coming from Arlington’s Mack Molding Company, a mid-sized company that produces custom plastics and metal fabrication for industry and employs approximately 600 local workers, is slightly more upbeat.
In a statement from Larry Hovish, Director of Communications, he states that, although they are concerned about the tariffs in regards to pricing in the supply chain, many of the products they use are already produced here.
“Like many manufacturers, we’re watching the evolving tariff landscape closely," Hovish said. "These measures are broad in scope and already creating ripple effects—particularly around pricing. For example, while we make many parts in-house as part of our vertically integrated manufacturing model, we rely on a wide network of suppliers for raw materials and components. Even our domestic suppliers often source steel, aluminum, and other key inputs from overseas. That puts pressure on costs throughout the supply chain, and we’re actively working to manage those impacts for our customers.”
That said, Hovish states that his company is in a strong position and that its supply chain is already heavily weighted toward domestic sources.
“That’s driven by the nature of our business,” Hovish said. “Mack specializes in big, bulky, and complex products. These are expensive to ship internationally and often require close, hands-on engineering support that’s hard to provide from afar.”
When asked if the tariffs might affect hiring, Hovish states the opposite.
“We’ve planned for growth,” Hovish says. “We have the capacity today. What we need is people. We can hire a couple dozen people right now. That might not be the case for everyone. We are in a good position because of what we do.”
The Banner reached out to several other businesses in the local area, including RK Miles, The Equinox Golf Resort and Spa, several smaller companies, and, in Bennington, Kaman Composites. Many businesses declined our invitations to discuss the issue, some citing the current politics underlying the situation.
“At the end of the day,” Christopher Macksey said, “these tariffs most acutely affect the consumer. Everybody's pocketbook right now is already stretched thin. All of the indicators, like short-term credit card debt and defaulting on auto loans, have already been creeping up over the last year or two to a kind of concerning level. Our economy before this was already pretty fragile, and now we're walking into a trade war where we turn around and increase people's cost of goods."
"I just can't see any way out of this where it actually doesn't end in a fairly heavy recession or even a depression," he speculated. "If the economy was incredibly strong and consumers were doing well, we could weather some of this, but that's not where we were heading.”
Dennis Hoffman, an economist at Arizona State University, framed the tariff impact more bluntly during a recent interview: “You end up hurting consumers across the entire United States, plain and simple.”