Recent tariff increases are expected to raise prices across the country as businesses that rely on overseas production and materials are hit with higher costs.
“Reciprocal” tariffs from the Trump Administration were set to go into effect on Wednesday, but the White House announced a 90-day pause on tariff increases for most countries while hiking them yet again for China. Trump also left in place a 10% baseline tariff that went into effect on April 5.
The increased tariffs are likely to impact goods from countries around the globe and a wide range of businesses, including one of Colorado's largest industries – outdoor brands.
Last year, 175.8 million Americans participated in outdoor recreation and the industry’s economic output accounts for about 2% of the country’s gross domestic product.
According to the Outdoor Industry Association (OIA), a trade group representing hundreds of outdoor companies, the tariffs will make it more expensive to make outdoor gear and sell it. That’s because most outdoor gear, from waterproof jackets to hiking poles, is technical to produce and is manufactured in specialized facilities overseas.
“There aren't factories in America to do that,” said Kent Ebersole, the president of OIA. “It's just not possible. And it's not possible to build those factories either.”
Ebersole said steep duties on imports from countries that commonly produce outdoor goods, including China, pose an “existential” threat to the industry, particularly small- and medium-sized businesses.
According to OIA, 84% of its members recently surveyed report they will be impacted by the tariffs. Ebersole said companies facing higher duties will likely need to crank up the prices for consumers. The end result could have a ripple effect throughout the economy.
A start-up prepares for changes
The tariffs are hitting businesses of all sizes, including one northern Colorado business only in its second year of operating.
“The question is, do we stay where we are or increase our prices?,” said Joe Basta, the co-founder of Tellus, a Fort Collins-based outdoor clothing brand. “We would basically have to increase our prices upwards about 50%.”
Tellus has a storefront in Old Town where they design gear locally. However, to manufacture that gear, they get recycled materials from Taiwan shipped to Vietnam for production.
“I guess the biggest challenge for us is we use high quality,” said Basta. “All of our materials are made out of either recycled or organic materials. So, we already pay a premium for those materials.”
When Tellus was founded, Basta and his team searched for a factory that aligned with the values they built their company around. This brought him to Vietnam, where the company visited the facility in person to ensure it was a good fit.
Now with higher prices, they may need to look elsewhere, but Basta said the process isn’t easy, and moving production to the U.S. is not on the table for the company yet.
“Unfortunately, just due to our lower volumes being a small- to mid-sized company that's a very large challenge. We would have to find a manufacturer in the U.S. that can make an array of products, from knits to wovens, you know, from jackets to performance shirts, to other products, shorts, what have you,” said Basta. “Only 3% of the apparel sold in the U.S. currently is made domestically.”
Basta says the company is currently taking a wait-and-see approach on what comes next. As of now, Tellus has gear in stock, but production is usually done about a year out, so the brand will need to make some decisions in the coming months.
A longtime brand hits the brakes
Keeping up with Trump’s shifting tariff moves over the past week has been “very chaotic,” said Travis Campbell, the CEO of Eagle Creek, an adventure travel gear company based in Steamboat Springs.
Campbell bought the 50-year-old business in 2021 from the publicly traded VF Corporation, which had nearly shuttered it. Since then, he’s been working to rebuild the company, but now calls the government’s tariff policies a “self-inflicted” disruption.
In a letter to members of Colorado’s congressional delegation last week, Campbell tallied the impacts of the now-paused reciprocal tariffs on Eagle Creek, which manufactures primarily in Indonesia. For one outstanding purchase order, he estimated the tariff rate would’ve increased from 14% to 46%.
“For a small- to medium-sized business like Eagle Creek, that's a really large amount of money that we don't necessarily just have sitting around in our bank account on any given day,” he said.
Although Trump has temporarily paused most of the higher tariffs, Campbell said it hasn’t changed his outlook.
“I'm happy to have the 90 days,” he said. “But it actually doesn't change anything, because we don't know what's on the other side of those 90 days.”
Last week, the company paused the hiring of two people, limited spending and froze salary increases. Even with the tariff pause, Campbell said he won’t be able to pay out those salary bumps until there’s more long-term clarity.
Plus, the baseline 10% global tariffs are still in place, leading to higher costs. Campbell also worries that consumer demand may falter amid the broader trade war uncertainty–potentially leading buyers to cut back on travel and gear purchases.
For now, the company is running through a spreadsheet of hard choices: Can the manufacturer absorb some of the costs? Can it delay certain imports? And, as a last resort, how much can be passed on to consumers?
Tariff talks continue
President Trump is entertaining negotiations with countries for which he temporarily lowered tariffs. Recently, he stated he’s not against adding more tariffs, but leaders from China and the European Union said they are prepared to combat the plan with retaliatory measures.
Some members of Congress are beginning to challenge President Trump’s tariff policies, including Jeff Hurd (R-Colorado), who introduced a bipartisan bill to limit presidential authority over tariffs. He told NPR that tariffs can be a helpful negotiating tool, but “they can have major impacts on farmers, small businesses and families in districts like mine and across the country.”
