He tariffs me, he tariffs me not

What it's like to be a florist now View in browser The costs of  the trade war a...
What it's like to be a florist now
View in browser
Bloomberg

The costs of  the trade war are becoming more obvious. Take, for example, a florist who talked with Stacey Vanek Smith about the challenges of different levies on different supplies—and how he's passing them along to customers. Plus: The billionaire founder of Rocket Mortgage faces challenges of his own, and the Elon, Inc. podcast takes stock of where the "first buddy" stands. If this email was forwarded to you, click here to sign up.

Rose is a rose is a rose is a rose, unless you're talking about tariffs. In that case, an Ecuadorian rose is subject to an extra 10% charge from his suppliers, while a rose from Colombia is going to cost him about 20% more, says Jean-Pascal Lemire, owner of Jean-Pascal's Florist in Beverly Hills, California. 

Prices have been changing so fast, Lemire says, that he can hardly keep track—President Donald Trump has, by some counts, changed his tariff policies over 50 times since taking office. That's more than two changes per week. "At some point it just becomes a bit ludicrous," he says.

After all, Lemire has blooms coming in from all over the world: Africa, Asia, Europe and South America. Along with a singular scent, color and shape, each bloom comes with a unique tariff. The worst so far? "Orchids from Thailand. I'm paying an extra 35%." 

Roses from Colombia. Photographer: Allen J. Schaben / Los Angeles Times/Getty Images

Lemire says navigating the extra costs is beyond overwhelming. "It's difficult already owning a small business. These tariffs just make it …" he says, his voice trailing off. 

Uncertainty has been the only constant in Trump's trade war, and companies have been scrambling to adapt. Big corporations often have a certain amount of flexibility: They can shift costs around, squeeze suppliers for deals, whisk off to private meetings with the president or even airlift 600 tons of product from China

Small businesses, generally considered those that employ fewer than 500 people, don't have the same ability to adapt. Perhaps it should come as no surprise that it was a group of small businesses—not wealthy corporations with their armies of lawyers and deep pockets—that banded together to sue the Trump administration in the US Court of International Trade over his use of executive power to levy tariffs. They didn't have many other options. 

For the Everybody's Business podcast, I spoke with several small-business owners who are grappling with changing costs, tariffs and regulations. Small businesses are a vitally important part of the economy: Almost half of the people who work in the private sector work for a small business. 

Lemire says he looked into domestic suppliers, especially for the cellophane, boxes and other packaging materials he mainly sources from China. "I tried to buy American, I really did," he says. "Everything was too expensive." Lemire pays about $1 for a box from China; the same box in the US would cost him about $7.  As for flowers, Lemire says local production is a bit of a nonstarter. "US farms tend to produce more of your filler flowers," he explains, "sunflowers, foliage, things like that." 

He's not alone in the struggle. A survey last month from the National Federation of Independent Business found sentiment among small-business owners dropping for the third month in a row, with owners citing poor sales and high interest rates as their top problems. Almost 30% said they planned to raise prices. 

Lemire saw that as his only option. He added a surcharge to each of his bouquets of $10, which he flags on his website for customers when they add flowers to their virtual cart. "Due to tariffs on imports from the Netherlands and Ecuador, a small fee has been applied," it reads. "We appreciate your understanding as we continue sourcing the world's finest blooms."

In Brief

A Midwest Champion Pushes Forward

Dan Gilbert at his office in Detroit. Photographer: Nic Antaya for Bloomberg Businessweek

When the company behind Rocket Mortgage—the largest retail home loan originator in the US—went public in 2020, Americans enjoying cheap money and still-warm stimulus checks were happily refinancing at a rapid clip. The lender, then called Quicken Loans, generated the vast majority of parent Rocket Cos.' $15.7 billion in revenue that year, making majority owner Dan Gilbert one of the richest people on Earth. In the five years since, the federal benchmark interest rate has ballooned to a punitive 4.5% on the upper end, and analysts estimate Rocket will record about $5.5 billion in annual revenue in 2025, roughly a third of its pandemic high. Its stock is down almost 30% since the initial public offering. "I've got to stay positive. There's nothing else you can do when you don't have any control," says Gilbert, 63. "You got to play the cards you're given."

The billionaire founder and chairman of Detroit-based Rocket knows a thing or two about that. Six years ago, he suffered an ischemic stroke on the right side of his brain while watching a light show over the city's river. He lost the use of the left side of his body and has been undergoing intensive physical rehabilitation ever since (while taking testosterone shots to stimulate muscle growth and stem cell injections to turbocharge his brain's healing). Just recently, he took a few unaided steps without a cane. "It's been a rough, rough ride, a slow comeback," he says in a Detroit conference room adorned with paraphernalia and trophies from the Cleveland Cavaliers, the NBA team he purchased in 2005. Gilbert uses a wheelchair much of the time, standing only with an occupational therapist by his side to greet a visiting reporter, and he apologizes that he can't take the titular "walk" with Bloomberg Businessweek on his feet.

Businessweek Editor Brad Stone talked with Gilbert for the A Walk With series, about his corporate and personal challenges: Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again

Musk Goes Back to Business

Photo Illustration by 731. Photos: NASA (1). Getty Images (5)

In a new episode of the Elon, Inc. podcast, host David Papadopoulos is joined by Bloomberg Businessweek senior writer Max Chafkin and Bloomberg tech editor Sarah Frier to discuss Elon Musk's supposed exit from the White House, how damaging his time in politics has been and what his ambitions might be.

Listen and subscribe on AppleSpotifyiHeart and the Bloomberg Terminal.

The Future of NYC

34%
That's the share of New Yorkers who rate the city's quality of life as excellent or good, according to the latest resident survey from the Citizens Budget Commission, up slightly for 2023. Democratic candidates to be the next mayor will square off in a debate tonight, but you can hear where they stand on many issues here.

A New Supervisor at the Fed

"We've created a much stronger, safer, sound banking system." 
Michelle Bowman
Trump's pick as the Fed's top regulator
She's on track for approval as the Federal Reserve's vice chair for supervision as early as Wednesday. The banking industry has praised her nomination, as she's expected to be friendly toward Wall Street.

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