Central Oregon businesses navigate Trump tariffs, trade war

Businesses across the country are watching and waiting to see how President Donald Trump’s tariffs will impact their operations — and a number of them are Central Oregon born and bred.

Several high profile companies based in the area — including Hydroflask, Les Schwab, RuffWear, BasX and Epic Aircraft — could feel the pinch of the 145% duty on imported goods from China. Tariffs on many other countries have been paused but could return if deals are not struck with the Trump administration.

Trump’s trade war began as a cudgel to punish other countries for not doing enough to stop the flow of migrants and fentanyl into the United States. Although tariffs on Mexico, Canada and other nations were paused in early April, tariffs on China have only increased.

Holding pattern

Companies contacted by The Bulletin routinely said they are in a holding pattern and watching the situation develop.

On Thursday, Trump announced a trade deal with the United Kingdom and said he plans to work on a deal with the European Union. But the sky-high tariffs on goods from China remain on the table for now.

Businesses have responded by keeping their container shipments shelved — shipping traffic into the Port of Los Angeles is down around 40% currently. And as of Thursday, there were no container ships docked at the Port of Seattle.

One local business that could be impacted is Les Schwab, which employs around 2,600 people in Oregon. It does not make tires but it does sell tires made by companies with operations in China and elsewhere.

“We will continue to do everything we can to mitigate impacts of tariffs on our customers,” Greg Waring, chief marketing officer for Les Schwab, said in a statement.

“The dynamic nature of the current regulatory environment is a challenge for all businesses, and consistency and certainty around tariffs and other policies help ensure fair pricing and high levels of customer satisfaction,” Waring added.

Another local business, Lonza, is not based in Bend but does have significant operations here. The pharmaceutical developer said in a statement to the Bulletin that they are “following developments closely” and that Lonza “prioritizes domestic sourcing.”

Managing costs

Jon Stark, chief economic officer of Economic Development of Central Oregon, said the tariffs are making companies more cautious with their cash flow to help them manage costs. The tariffs are also forcing local companies to think outside the box and figure out new supply chains.

“There is some good coming out of this too. We are seeing some reshore activity on the rise,” said Stark.

Companies need to be nimble and be prepared to change their product line if their normal source of materials becomes unavailable, Stark said. Companies are also being pushed to outline strategies over different timeframes.

“They’re positioning themselves for how much runway they have with cash flow and how much runway they have with their current inventory, and trying to project whether or not they can absorb that 145% in three months, six months, nine months,” said Stark.

Stark said he has spoken with different companies around Central Oregon that are running through various hypothetical situations to prepare for all kinds of outcomes.

“The real message is there’re so many unknowns,” he said. “There are too many unknowns to predict the future.”

One of those unknowns is just how long the 145% tariff on goods imported from China will last. President Trump has already paused large tariffs on other countries and many believe the same could happen for China if talks between the two countries get on track.

To stockpile or not to stockpile

Mike Schindler, the co-owner of Sunnyside Sports in Bend, is one of those business owners who believes that the unpredictability of the tariffs mean people in his situation can’t do much right now.

Schindler said he isn’t stockpiling overseas goods ahead of the higher tariffs, even though most bike manufacturing occurs in Asia. Some of his products are from China but his showroom includes bikes and parts from other countries, including Vietnam, Cambodia and Taiwan (each of which are also facing possible tariffs of 32-49%).

For now the price increases have been modest. Over the past few weeks most prices in the shop have risen by around 10%. If the tariffs do escalate he will cross the bridge when it arrives. “If it ends up being a big issue then I think we will just have to face it at that point,” he said. “There isn’t any point of completely stressing out about it until things become more clear.”

Pocketbook pressure

Product developers and importers aren’t the only ones that could be feeling economic pressure. Local food and beverage manufacturers source some of their packaging from overseas. And when their customers are feeling pocketbook pressure, it may mean fewer people entering restaurants and brewpubs.

“Tariffs aren’t affecting our cost of goods significantly,” said Larry Sidor, the co-founder at Crux Fermentation Project. “Our biggest issue is consumer spending trends. Customers are going out less and spending less when they’re out.”

Sidor said he’s not certain why spending is down at his brew pub. He suspects it’s confidence in the economy or less discretionary income or a cultural shift.

“Whatever it is, it’s affecting our keg and pub business significantly,” he said.

As local businesses ponder their options, the Trump administration is also plotting its next move. U.S. officials will meet a high-level Chinese delegation this weekend in Switzerland for the first major talks between the two countries since the recent round of tariff hikes.

For Stark and others impacted by the skyrocketing tariffs, that looks like an opportunity to turn back the clock.

“We could write this (tariff) story today and tomorrow the Chinese tariffs could be pulled,” Stark said.

–Michael Kohn, The Bulletin