World · NBC 60
As new U.S. tariffs on Canadian goods take effect and Canada is expected to respond with tariffs of its own, Georgia businesses and consumers could be particularly exposed to the economic fallout. Canada is Georgia's largest international export market, and a new report from the Georgia Chamber Foundation says more than $13 billion in trade moves annually between Georgia and Canada. The latest tariff fight comes as businesses are already confronting higher costs — some of which ultimately make their way to consumers.
Importers pay tariffs to the federal government when goods enter the United States. Businesses can absorb those costs, pass them along through higher prices or use some combination of the two. For Paul McClure of Fairview Flower Shop in Decatur, those decisions have become increasingly familiar.
Over the past two years, McClure said he has watched the cost of flowers — and nearly everything that goes with them — rise. "We've noticed an increase in our product flowers because of where they come from, but also our hard goods, our easels, flower paint, sprays for the flowers," McClure said. CBS News Atlanta For a small business, higher costs eventually force a decision: absorb them or pass at least some of the increase along to customers.
"Since we have to buy it from somewhere else, you do kind of need to be aware of that," McClure said. "There's probably going to be a bit of an upcharge." "In a business where the margins are pennies, we're having to spend more dollars for those same pennies," he added. Another florist in Metro Atlanta, who asked for anonymity, tells CBS Atlanta, tariffs have increased her costs as much as 17%.
She says prices for her customers have remained stable, and that she hasn't yet passed her increased costs onto them yet. However, she added, "It hasn't been a good year for us." The Yale Budget Lab estimated last week that current tariff policy will ultimately cost the average U.S. household between $1,100 and $1,800 annually. And Chris Clark, president and CEO of the Georgia Chamber Foundation, said those estimates don't necessarily capture every expense Georgia families could face.
"That's not counting what we're paying more in gas prices as well," Clark said. Georgia could be particularly vulnerable to an escalating trade dispute with Canada because of the depth of the state's economic relationship with its northern neighbor. "We have over $13 billion a year of international trade between the state of Georgia and Canada," Clark said.
The Georgia Chamber Foundation's newly released tariff briefing examines that relationship at a time when Canada is at the center of the latest round of tariffs. Georgia imports a number of agricultural products from Canada, including grain and wheat products, Clark said, potentially putting additional pressure on food prices. "We get a lot of grain and wheat products out of Canada," Clark said.
"And so we're going to have that additional impact on Georgia families. We could see sandwich or bread prices increase anywhere from 25-50%." The risk isn't limited to what Georgia imports. If Canada retaliates with tariffs on American products, Georgia companies that sell goods north of the border could also face higher costs or reduced demand.
Clark said Canada is Georgia's largest foreign purchaser of poultry and is also a major market for the state's peanuts, agricultural and wood products and aviation industry. At the same time, Georgia manufacturers rely on Canadian materials. "We don't make aluminum in Georgia, but we have certain providers out there that use a lot of aluminum that comes out of Canada," Clark said.
Higher aluminum costs can ripple through the economy, potentially increasing costs for products ranging from beer and soft drinks to other canned and manufactured goods. There is another side to the tariff story: Some of the money paid under earlier tariffs is now making its way back to Georgia businesses. According to the Georgia Chamber Foundation, several of the state's largest companies have sought or received more than $1.5 billion in federal tariff refunds.
Home Depot accounts for $730 million of that total, while UPS accounts for $500 million. Carter's is seeking or receiving $132 million, Newell Brands $126 million and Floor & Decor $87 million. CBS News Atlanta For smaller businesses, however, recovering money paid because of tariffs can be far more complicated.
"It is daunting. It's challenging," McClure said. "But we are certainly looking at trying to get back what we can out of what we spent as far as the tariffs are concerned." And consumers are in a different position altogether.
While businesses may be able to seek refunds for certain tariff payments, consumers who paid higher retail prices as those costs moved through the supply chain have no federal process for claiming that money back. Clark said some companies are exploring ways to return recovered money to customers, but there is a fundamental problem. "You can't go back and retroactively do it," he said.
"Those purchases have already been made." That means even when a tariff payment is eventually refunded, the higher price a consumer already paid doesn't automatically disappear with it. And if the United States and Canada fail to reach a new trade agreement, Clark's prediction for Georgia businesses and consumers is succinct. "More pain," he said.
"Washington's got to get this right and do it quickly." The Georgia Chamber says international trade among the United States, Canada and Mexico has been a critical part of the regional economy for decades. For Georgia, Clark said the best outcome would be a renegotiated agreement that provides stability for businesses, keeps trade moving and ultimately helps bring prices down. In: Small Business Georgia Economy Tariffs
Source: CBS News
