Shopper demand on much-needed appliances outweigh tariff concerns, as Trump's trade war heats up
Hanna Roesch, who lives in Barrington, was shopping at Abt Electronics for a new dryer after her 10-year-old machine overheated.
The timing is less than ideal, as shoppers face higher prices due to tariffs.
President Donald Trump announced last week a slew of new tariffs on more than 60 countries, which is expected to go into effect Friday. Goods that are already on ships before the deadline and reach the U.S. before Oct. 5 will not be subject to the tax, according to the administration.
Trump announced the new taxes a day before his self-imposed Aug. 1 deadline, when he required some countries to negotiate a trade deal to avoid high tariffs. While some like South Korea and Japan negotiated a deal last week, other countries are still in talks with the U.S.
For shoppers at Glenview's Abt Electronics, the impact of tariffs wasn't a concern because buying a new appliance was essential.
“My dryer almost [caught] on fire. So no, the tariffs are not impacting whether or not to buy,” Roesch said, adding that her biggest concern was getting a replacement fast and ideally a model she is used to operating.
Abt Electronics, a family-run business that started in Chicago in 1936, is one of the Chicago area’s largest retailers for electronics and appliances. It has a 200,000-square-foot showroom and an 800,000-square-foot warehouse.
Mike Abt, co-owner and son of founder Bob Abt, said customers looking for appliances are different than those in the market for, say, a car.
“They can’t wait. If you need a washer or dryer, you have to buy it today,” Abt said.
While customers are seeing price increases from vendors already, Abt began stocking up on inventory shortly after Trump's inauguration. Abt wanted to be prepared in case the White House put tariffs on countries that would impact its brands.
“Right now, we have 37% more inventory than at this point last year,” he said. “That will keep our prices from rising a little longer.”
He said some products have already increased in price, but it's largely held the line on most products, especially those made in the U.S.
“Our stereo stuff went up; TVs went up. Some things that come from the U.S. like Whirlpool, which is 80% from here, is solid,” Abt said. But even products made in the U.S. often rely on parts imported from other countries and may be subject to tariffs, he said.
Trump began putting tariffs on a number of products like aluminum and Canadian lumber, shortly after stepping into the White House. In less than six months, Trump has announced additional tariffs, changed the rate, suspended them and came up with new ones — a series of actions that have created uncertainty for Chicago area businesses.
Abt said the uncertainty around the administration's tariff policies has been the biggest challenge for both his store and its vendors.
“You can either act, or wait and buy as needed," he said. "We acted this time, and now, I have a lot of money tied up in inventory.”
Abt said that despite fears that some manufacturers would take advantage of the situation and price gouge, so far he hasn't seen that.
“I think they’re hiking prices less,” Abt said. “I think they could hike them more, but they are holding off because it’s all about market share. They’d rather have market share than make money, it seems.”
La Grange resident Jeff Grand was looking to replace a cooking range.
“It feels to me like the tariff prices may already be baked in,” Grand said. “I don’t think there’s much a consumer can do about it except look for sales.”
The Federal Reserve's Beige Book reported in July that all 12 of its districts across the country reported increased costs, with seven districts characterizing price growth as moderate and five as modest. The book, which details regional economies based on data collected from businesses, organizations and other sources, also speculated that prices may soon rise faster.
“Many firms passed on at least a portion of cost increases to consumers through price hikes or surcharges, although some held off raising prices because of customers’ growing price sensitivity, resulting in compressed profit margins," according to the book. "Contacts in a wide range of industries expected cost pressures to remain elevated in the coming months, increasing the likelihood that consumer prices will start to rise more rapidly by late summer.”
Dean and Peggy Stiegemeier, of Gilberts, were at Abt Electronics on Friday to replace their washer and dryer, after their current units started making odd noises. “We gotta do it," Dean Stiegemeier said. "Tariffs are not on our mind.”