Written By Lexx Thornton
Sweeping tariffs took effect Thursday, and while President Donald Trump has said the tariffs would lead to factories and jobs moving back to the United States, for Black Americans and small-business owners, it is not that simple.
Prices are expected to dramatically rise for clothing and shoes; electronics like cellphones and computers; cars and auto repair; and groceries like coffee, fruits, vegetables, alcohol, and seafood. Economists say the sweeping tariffs may slow U.S. economic growth and increase unemployment. Earlier this year, Capital B reported that nearly 80% of Black Americans were preparing to change their spending habits and buy fewer things as a result.
Vera Warren-Williams started the Community Book Center in New Orleans with $300 and a dream in 1983. In the 42 years since, the Black book and clothing store went from the trunk of her car to a flagship shop and anchor of Bayou Road, a restaurant and shopping district with the city’s highest concentration of Black businesses.
She has battled through several economic downturns, including the 2008 recession and the mass destruction of Hurricane Katrina. Now, she has to face the impact of one of the Trump administration’s most drastic economic policy changes in decades: imposing tariffs on virtually every country that the U.S. trades with.
Just after midnight on August 7, goods from more than 60 countries and the European Union became subject to tariff rates of 10% or higher, according to the Associated Press.
“Products from the EU, Japan, and South Korea are taxed at 15%, while imports from Taiwan, Vietnam, and Bangladesh are taxed at 20%. Trump also expects the EU, Japan, and South Korea to invest hundreds of billions of dollars in the United States,” the news outlet reported.
As uncertainty remains, Black households and small businesses were thrown into a tailspin during the months of delays and extensions.
“It is putting people in a very uncomfortable position, and when the economy and people are uncomfortable, we’re [Black-owned businesses] the first to go,” Warren-Williams said. During the 2008 recession and the height of the COVID-19 economic downturn in 2020 and 2021, Black businesses closed at the highest rate of all ethnic groups, and Black families lost the most wealth.
Warren-Williams said the Trump administration has ushered in a perfect blow to Black businesses by weakening the economy and stunting support for minority-owned businesses with its attack on diversity, equity, and inclusion.
She estimated roughly two-thirds of her products were produced outside the U.S., which she expected would lead to increased costs for her business. And because she caters toward Black customers — who have lower disposable incomes and will need to spend their money on essentials like food over books — and corporate clients that have stopped buying as many Black books because of attacks on diversity and Black history, her sales will dwindle.
When Black businesses struggle and disappear, communities also lose social and cultural lifelines, she explained. Back in April, a group of retirees sat in her store for hours, not to purchase anything but just to congregate. They reminisced on the shifting neighborhood, thumbed through books they’d read before, and contemplated how they might prepare to face the tariffs themselves. Warren-Williams plans to replace her “busted” phone before prices skyrocket, and “Mama Jennifer,” who runs the shop with her, said she’s going to shift her grocery shopping habits.
“We offer a nice little vibe that can’t be measured by money or sales,” Warren-Williams said about the shop’s position as a community hub.
“Black families and small businesses will be more likely to experience the pain and have more difficulty navigating this,” explained LesLeigh Ford, an associate director in the Race and Equity Division at the Urban Institute, a D.C.-based research and public policy group.
“This is distressing even for the Black middle class,” she said, also pointing to the elimination of federal jobs, which has been used to create wealth for the Black middle class.
“For many Black Americans in the middle class, they are the first-time wealth builders in their families, so there are also the psychological effects of an unexpected financial crisis removing you from that stability.”
For Alonzo Knox, a Louisiana state representative and owner of Backatown Coffee Parlour, grappling with the potential impacts of tariffs on his business also means grappling with the impacts of tariffs on his customers and constituents.
Tariffs act as a regressive tax system because lower-income households spend a larger proportion of their income on essentials like food, clothing, and household goods, which are heavily impacted by tariff-induced price increases. A family living paycheck to paycheck will struggle more to absorb rising costs for imported items such as groceries or clothing, forcing them to make tough choices about cutting back on other expenses.
Knox imports his coffee beans from Costa Rica, India, and Brazil, and expects his costs to rise substantially. But his shop is also in a majority-Black ZIP code where two out of five people live in poverty, so he knows raising prices isn’t feasible. And although he pays his employees roughly double the state’s minimum wage of $7.25 an hour, he “can’t imagine reducing salaries to bring in more people because they’re not even at a livable wage already.”
Back in April, he was toying with reducing menu sizes to navigate these challenges without passing the increased costs onto its customers. But the tariffs felt like “another addition to the direct attack on Black businesses and livelihoods,” he said.
Last year, the New Orleans metro area ranked as one of the top regions for Black ownership. Still, despite Black people making up 37% of the people living in the region, just 6.2% of businesses are Black-owned. Nationwide, it is even more bleak: only 3% of U.S. businesses are Black-owned.
