On Monday afternoon, Sandya Dandamudi had five trucks racing to cross the Canadian border by midnight.
The trucks, full of American granite that was fabricated in Canada, needed to be in the U.S. or they risked being slapped by President Donald Trump’s 25% tariff on Canadian imports.
Dandamudi, president of Chicago-based stone supplier GI Stone, said the last truck came in at 11:30 p.m. — a half-hour before the tariffs went into effect.
Her goal was to have 10 trucks cross the border, but half of them didn't make it due to truck and labor shortages as other companies were also scrambling to reach the Canada-U.S. border.
On Tuesday, Trump put 25% taxes on imports from Mexico and Canada, taxing Canadian energy products such as oil and electricity at a lower 10% rate. The president also doubled the 10% tariff he placed on China to 20%.
As the stock markets took a dive and Mexico, Canada and China announced plans to tax U.S. products, the White House announced Wednesday that it would grant a one-month exemption on imports from Mexico and Canada for U.S. automakers. White House press secretary Karoline Leavitt said the president is “open” to hearing requests from other industries seeking exemptions as well.
But pausing the 25% taxes on autos traded through the United States-Mexico-Canada Agreement would only delay a broader reckoning to take place April 2, when Trump is set to impose broad “reciprocal” tariffs to match the taxes and subsidies other countries charge on imports. He also wants to impose more tariffs on the European Union, India, computer chips, autos and pharmaceutical drugs.
In another reversal, Trump announced Thursday that he would postpone 25% tariffs on most goods from Mexico for a month. “After speaking with President Claudia Sheinbaum of Mexico, I have agreed that Mexico will not be required to pay Tariffs on anything that falls under the USMCA Agreement," Trump said on Truth Social. Then a couple hours later he announced a similar exemption for Canadian imports.
From breweries to farms, businesses are bracing for higher costs as well as product and supply chain disruptions. GI Stone's last-minute rush is just one example of how Chicago companies are navigating Trump's quickly changing tariff policies, which have economists concerned about a trade war, higher inflation and slower economic growth.
Dandamudi’s grateful some trucks were able to make it into the U.S. tariff-free but knows it will affect future shipments of granite.
“We are exposed,” she said. “I wouldn't say as heavily as before, but we’re definitely exposed.”
A recent survey of more than 600 businesses by global supply chain compliance company QIMA found owners had the most pessimistic outlook for 2025 than in the last four years.
One-third of respondents said they anticipated “worsening supply chain disruptions,” and Trump’s presidential win “significantly contributed” to the forecast, QIMA found. The majority of businesses (62%) who expect a strong or medium impact on the supply chain in 2025 said they anticipate charging customers higher prices. And 61% of businesses said they expect to source products from different countries this year.
Companies feel vulnerable
Tariffs bring about one of the most dangerous things for businesses — uncertainty.
“Every single person that I’ve talked to is furious,” Dandamudi said. “Suppliers are not going to eat the tariffs because the suppliers are going to go, ‘Hey, I’m in the driver’s seat.’ Maybe they’ll eat the tariffs two years from now, and everything gets adjusted, but right now, they’re in the driver’s seat because we need the goods.”
Nancy Qian, economics professor at Northwestern University’s Kellogg School of Management, said tariffs are tricky because there’s often little sense of how long they’ll last or what countries will be hit. And much of the uncertainty stems from who ultimately pays for the tariffs.
The Trump administration has said foreign countries pay for tariffs. But research on Trump’s first term in 2018 — when he also implemented tariffs — showed the cost was almost entirely paid for by the American importer, Qian said.
Rising business costs will likely be passed on to the consumer through higher prices. Qian said prices on produce — like avocados from Mexico — are expected to rise.
Raiye Rosado, co-founder and president of Homewood-based Rabid Brewing, said she expects the brewery’s bills to jump as high as 20% because of the tariffs. A lot of the grain American brewers use to produce beer is from Canada, she said.
“We get almost all of our grain from Canada,” Rosado said. “I would say at least two-thirds of a beer’s cost comes from grain.”
The industry stands to be hit “double hard," Rosado said, when also factoring in aluminum imports from countries like China and Mexico. Larger breweries are able to stockpile materials, but for a small business like Rabid Brewing, that’s out of reach.
The company plans to change the brews it produces based on costs and availability. Rosado is trying her best to stay aware of any poilcy changes, but she said there’s a lot of misinformation on tariffs and not a lot of concrete information for brewers.
“Everybody I have talked to is just kind of throwing up their hands and going, ‘I don’t know,’” Rosado said.
Retaliatory tariffs
Qian said there has been “intense concern” among dairy producers over another trade war. Farmers are “very vulnerable" because China is a big market for agricultural exports.
Illinois is the nation’s second-leading exporter of both soybeans and feed grains and related products, according to the Illinois Department of Agriculture. About 44% of grain produced in Illinois is sold for export.
The Illinois Farm Bureau on Tuesday urged Trump to find alternative methods to solve issues at the border.
“We remain deeply concerned with the use of tariffs and their potential to spark retaliation on America’s farmers,” Illinois Farm Bureau President Brian Duncan said in a statement. “Illinois farmers’ products — from grains and feed, corn, soybeans, ethanol, beef, pork and more — rely on access to foreign markets and will undoubtedly be impacted by these new tariffs either through increased prices or decreased market access.”
Canadian Prime Minister Justin Trudeau said Tuesday that his country would plaster tariffs on over $100 billion of American goods over the course of 21 days.
Mexico indicated it would announce countermeasures Sunday, but it's unclear if those plans will be postponed after it received a temporary tariff reprieve Thursday.
Beijing responded with tariffs of up to 15% on a wide array of U.S. farm exports. It also expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen.
“If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” China’s embassy to the U.S. posted on X Tuesday night.
For GI Stone, a reversal of Trump's tariff policy in the next few months will be too late.
“I haven’t seen the light at the end of the tunnel,” Dandamudi said. “The damage has already been done; the chaos has been created. People have to do strategic plans for their businesses. They’ve got to do budgeting.”
When Trump implemented tariffs on aluminum during his first term, Rabid Brewing almost didn’t survive. Rosado said the brewery drastically cut back on canning and hasn’t focused on it since.
“We’re just going to have to see how [it] pans out,” Rosado said. “It’s scary times. It’s really terrifying to not be able to plan for your future.”
Contributing: AP
This story has been updated with Trump's latest tariff policy for Mexico and Canada.
