3 U.S. Companies Ready to Face Trump's New Tariffs

The announcement of President Trump's new tariff system has sent shockwaves through global financial markets, with stock markets tumbling and investors seeking safety in bonds, gold, and the yen. The S&P 500 futures dropped by 3%, indicating deep losses for Wall Street. While the economic impact of these tariffs is still unfolding, some U.S. companies are already strategizing to weather the storm. Here are three companies that are well-positioned to navigate the challenges ahead.



Penny Linn Designs: Absorbing the Costs

Krista LeRay, owner of Penny Linn Designs, a needlepoint canvas business based in Norwalk, Connecticut, is facing a significant challenge due to the new tariffs. Her company does business with manufacturers in China, where total U.S. tariffs will jump to 54%, and buys needles, thread, and other crafting tools from wholesalers who also source products from overseas. LeRay fears that her 36% profit margin will shrink, and she is unsure whether to raise prices or absorb the extra costs herself.

LeRay's strategy is to absorb the costs as much as possible, stating, "I feel wrong raising prices when I work so hard to keep them down [or] lower." However, she acknowledges that this approach may not be sustainable in the long term. "It feels like I should take on the burden as 'the cost of doing business,' but some items, I just simply don't have the margins to do that for," she says.

Freja: Raising Prices Strategically

Jenny Lei, founder of the luxury handbag company Freja, is also affected by the tariffs. Freja manufactures its products in China, and Lei is concerned about the impact on her company's margins. Freja's strong margins will allow it to "absorb the tariff for a bit while we wait to see how it impacts us," but it will eventually have to raise prices. Lei plans to tie the price increase to new, more premium items and an elevated packaging experience to make the increase more palatable for consumers.

Lei's strategy is to increase prices but to do so in a way that adds value for the consumer. "We are launching lots of new, more premium items, as well as an elevated packaging experience, within the next few months — and [we'll] tie our price increase to that, so it feels more palatable for the consumer," she says.

Burlap & Barrel: Cutting Costs and Improving Efficiency

Burlap & Barrel, a New York-based company that sells high-end spices sourced from small-scale farmers in countries around the world, is also impacted by the tariffs. The company's costs will likely increase from tariffs on countries like Vietnam and India, where they source spices. Trump's announcement included a 46% tariff rate on Vietnam and a 26% rate on India. Burlap & Barrel does not plan on renegotiating with farmers or raising prices for customers but has instituted a hiring freeze and paused the release of multiple new products in anticipation of the tariffs.

Co-founder Ethan Frisch stated, "We've been making contingency plans since the election, but the extent and breadth of the tariffs have taken us by surprise." While this strategy can help manage immediate financial pressures, it may also limit a company's ability to innovate and grow in the long term.



In summary, while the new tariffs announced by President Trump present significant challenges for U.S. companies, some are already strategizing to mitigate the financial impact. Penny Linn Designs is absorbing the costs, Freja is raising prices strategically, and Burlap & Barrel is cutting costs and improving efficiency. These strategies may help these companies weather the storm in the short term, but their long-term competitiveness will depend on how they adapt to the changing economic landscape.