Tariff Talk: A Conversation with Kelli Courtney of Margaret's Boutique

Be the reason your community stays informed—give to local journalism now! DECORAH — As a small business owner, Kelli Courtney, the owner of Margaret's Boutique in Decorah, is no stranger to the complex world of tariffs. A member of the Small Business Retail Council for the National Retail Federation (NRF), Courtney brings a wealth of insight into how tariffs can affect not just her boutique, but small businesses across the nation. What is a Tariff?Many people may hear the word "tariff" and assume it's just another political buzzword. However, for business owners like Courtney, understanding tariffs is critical. In essence, a tariff is a tax on goods coming into the United States, and it directly affects the prices businesses pay for imported products. "Tariffs have been around, they aren't inherently political. They are a tax," Courtney explains. "It's important for small business owners to understand that China doesn't pay the tariff—we do as importers." Courtney points out that the current tariff on Chinese imports, including everything from car parts and screws to clothing and assembled goods like computers, doesn't discriminate. Even if an item is purchased through an American-based company, it is not immune from tariff pricing pressures. While large industries such as steel, aluminum, and domestic solar panel manufacturing have seen growth due to tariffs, small retailers face more challenges in adjusting to rising costs. "80% of my store is retail from U.S.-based sellers, but many of those items contain components made overseas," she says. "Because labor costs are cheaper in China, most U.S. goods are sent there for assembly. Anything with a 'Made in China' tag could have just been sent there to be assembled. Regardless, if it comes back to the U.S. from China, there will be a tariff." Whether it's fabric from Bangladesh or assembled clothing from China, Courtney emphasizes how interconnected the global economy is, especially in the apparel industry. "The television industry is another good example," she points out. "It's incapable of producing parts in the U.S. In the same way, the apparel industry relies on international sourcing for many of its components and labor." The Impact on Small BusinessesTariffs can significantly affect the way small businesses operate, especially those in retail. Since they often rely on imported goods, even slight price increases can ripple throughout their operations. Prior to the Trump administration, Margaret's Boutique wasn't seeing major price adjustments tied directly to tariffs. However, during Trump's first term, higher tariffs were implemented and remained under Biden's administration. Now, under a second Trump administration, a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China are being implemented. One of the administration's key arguments is that tariffs level the playing field for American companies that struggle to compete with low-cost foreign goods. By making imported products more expensive, the hope is that businesses will shift production back to the U.S., boosting domestic job creation and re-introducing life to manufacturing sectors. Supporters of this approach argue that, while tariffs may cause short-term pain for some businesses, they serve the long-term goal of strengthening the U.S. economy by reducing reliance on foreign goods. The critical dialogue begins when these costs get passed down to consumers and small businesses, making it harder for them to stay competitive. While Courtney has yet to see an impact on the spring merchandise she's already ordered, she is aware that prices for fall inventory could be subject to change depending on tariff decisions. She notes that while the tariffs didn't appear to have a noticeable impact during Trump's first term, the continuing uncertainty and possible increases make planning for the future difficult. "Right now, it's too soon to say how the increases will affect us. With 10%, people can work that in. But 25% is a whole different ball game. The administration is moving quickly, and the topics are changing all the time," she adds. "It's hard to plan when there is so much uncertainty." A Voice for Small BusinessCourtney's role on the NRF's Small Business Retail Council has given her a platform to advocate for small businesses and ensure that their voices are heard in Washington, D.C. She and other members of the council meet with lawmakers to discuss issues that directly affect small businesses, such as tariffs, credit card swipe fees, labor policies, and organized retail crime. For Courtney, tariffs are one of the most pressing issues. In April, she plans to head to D.C. to meet with Iowa Senators and Representatives once again to discuss how tariffs could potentially impact her business. But this is more than just about her boutique—Courtney works to ensure that the broader concerns of small businesses are addressed at the national level. "Some issues are more pertinent to certain businesses," Courtney says. "This year, tariffs are going to take the spotlight." The Uncertain Future: What's Next?For now, it's unclear how small businesses will respond to the ongoing uncertainty surrounding tariffs. Like many owners, Courtney is staying the course while bracing for what could come. "I'm trying to raise my awareness, whether I like it or not," she says. "I'm somewhere in the middle—confident, yet nervous. I'll continue to adapt, but I'm staying focused on my customers and my community." Like Courtney, they are still balancing the potential benefits of stronger domestic industries when the immediate financial challenges of tariffs are present. Supporting Small Businesses: A Call to ActionCourtney's message is clear: supporting small businesses is more important now than ever. "We work hard to bring in products that our customers love," she says. "The merchandise we bring in is from listening to them. Support your downtown businesses, support your local community." As small businesses like Margaret's Boutique continue to navigate the complexities of tariffs and other challenges, it's essential for both consumers and policymakers to understand the impact these decisions have on the hardworking entrepreneurs who make up the fabric of small-town America. Feed your curiosity! 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