Detroit City Wire

John Murray and his wife launched Modern Natural Baby in Ferndale, Michigan, 16 years ago with the intention of avoiding products made in China. However, they soon realized that most car seats and strollers are manufactured there. Despite consumer interest in U.S.-made goods, higher prices deterred customers, leading Murray to source approximately 80% of their inventory from China.

The recent trade tensions initiated by President Donald Trump have led to fluctuating tariffs on Chinese imports, reaching as high as 145% before being temporarily reduced to 30%. This situation has created challenges for small retailers like Modern Natural Baby. Essential baby items such as car seats and strollers face potential scarcity and price hikes due to stockpiling amid uncertainty over future shipments from China.

Murray described the dilemma facing small businesses: "You either stay the course or what you have to do is you have to panic buy." Panic buying can lead to debt, while staying the course might result in empty shelves within weeks.

A survey by the Michigan Retailers Association (MRA) revealed that over 60% of Michigan businesses import goods from other countries. Many retailers are reconsidering suppliers or altering orders due to tariff impacts. Some have canceled orders altogether, while others focus on maintaining inventory levels rather than expanding them.

Andy Linn, co-owner of City Bird and Nest in Detroit's Midtown neighborhood, reported receiving notices of impending price increases from suppliers due to rising costs. The MRA survey indicated that nearly 37% of retailers are considering supplier changes because of these price hikes.

Linn expressed concern about making changes amid the current unpredictability: "You'll have these long relationships with a supplier... changing is not very attractive."

To cope with increased costs without cutting staff hours, Linn has reduced advertising expenses and other operational costs by about 5%.

According to the MRA survey, two-thirds of retailers have raised prices due to tariffs. Nearly 17% reported significant price increases. Business conditions remain challenging for many small retailers like City Bird and Nest as they experience decreased customer traffic and describe operations as "wild," "bumpy," and "rough."

William Hallan, president and CEO of the MRA, highlighted the difficulties posed by inconsistent tariff applications: "The week-to-week and day-to-day changes are hard for local retailers."

Some sectors remain unaffected or even benefit from tariffs. Approximately 6% of surveyed retailers anticipate positive impacts over the next year—primarily antique stores, thrift shops, and those selling handmade or local products.

Despite selling locally made goods at City Bird, Linn notes that some components are sourced internationally: "We're finding that's an area that's been the most complicated." He cites challenges in securing stable pricing for materials used in their products.