MARY LOUISE KELLY, HOST:
Imagine placing an order and having no idea what the price will be once the goods are delivered. That is the situation that a lot of importers are facing right now. On Friday, a federal appeals court ruled that most of President Trump's tariffs are illegal, which could make imported products a lot cheaper. But that ruling is on hold for now as we wait to see what the U.S. Supreme Court may decide. NPR's Scott Horsley is with me. Hey, Scott.
SCOTT HORSLEY, BYLINE: Hi, Mary Louise.
KELLY: So I would think a lot of American importers would be celebrating this federal appeals court decision, but I gather they are not popping any champagne corks yet.
HORSLEY: No, not until they know if that 15% tariff on champagne and all other European goods is going to stick around. The appeals court ruled that tariff, like the others that President Trump ordered under a 1970s-era statute, are illegal. But it put the decision on hold for at least six weeks to give the administration time to appeal to the Supreme Court. So for now, importers are stuck in this kind of tariff limbo. Patrick Allen, who's a wine importer in Columbus, Ohio, says, unfortunately, that's what he's been wrestling with for months now.
PATRICK ALLEN: We've been kind of ordering in fits and starts, and our inventory is much lower than it normally would be. So as a result, we've got lost sales and lost income.
HORSLEY: Allen says European wineries have absorbed some of the cost of tariffs, but the rest is starting to show up in the prices that consumers pay. You know, Trump's imposed tariffs ranging 10- to 50% on just about everything the U.S. imports. The appeals court said that was an overreach, and ultimately, it will be up to the Supreme Court to see if those cost increases stick.
KELLY: And Scott, go back to the American importers. How are businesses coping with all the uncertainty?
HORSLEY: It depends on what kind of goods we're talking about. Some businesses can afford to wait to see what that final ruling might be. Others, though, cannot. Barton O'Brien, for example, runs a business in Maryland that sells collars and harnesses and life jackets for dogs. Springtime is his big selling season, so he's got to place orders with factories in Asia soon, not knowing whether the tariff will still be in place once those goods arrive.
BARTON O'BRIEN: We have to roll the dice. I will say this, I'm not rolling the dice with the stuff made in India. Because a 50% tariff isn't a tax. That's an embargo.
HORSLEY: O'Brien had to cancel an order that was going to be made in India because the tariff that Trump ordered on those goods was so high.
KELLY: Now Scott, the Trump administration would weigh in here and say, look, American businesses can avoid these tariffs if they just manufacture here in the U.S. Are we seeing evidence of companies shifting production from overseas?
HORSLEY: Undoubtedly some companies are looking at that, but, you know, how much is a company going to spend building a new factory in the U.S. if it's not sure that Trump's tariffs are going to still be in place six weeks from now? Jonathan Silva runs a board game company based in Massachusetts. He is moving production of one game - a specialty edition of Monopoly - to the United States. But overall, he says the tariff roller-coaster has been a real challenge because the rules keep changing.
JONATHAN SILVA: You can't do business that way. You can't grow. You can't hire. You can't invest. Having no certainty has handcuffed us in making any decisions of moving forward. We're just tired, and we're just hoping for some level of certainty.
HORSLEY: You know, every month, the Institute for Supply Management surveys factory managers in the U.S., and for months, those managers have been saying how damaging these tariffs have been. One was quoted in a survey out today saying his company's raised prices 24% and still had to lay off 15% of their workforce. So not a good sign for the domestic factories these tariffs are supposed to help.
KELLY: Scott Horsley, thank you.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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