“We Want Our Money Back:” Two American Businesses Address Trump Tariff Chaos

BIANNA GOLODRYGA: Now, up to $175 billion of refunds could be given back to businesses that paid import taxes after the Supreme Court ruled President Trump’s global tariffs illegal last month. But for many small American companies, the damage has been done. Some owners are doubting whether they can really claim their money back. Founder of Copper Cow Coffee Debbie Wei Mullin, and CEO of M.M. LaFleur, Sarah LaFleur, speaks to Michel Martin about how they’ve been navigating the uncertainty this past year.

(BEGIN VIDEOTAPE)

 

MICHEL MARTIN: Thanks, Bianna. Debbie Wei Mullin, Sarah LeFleur, thank you both so much for talking with us once again.

 

DEBBIE WEI MULLIN: Thank you.

 

MARTIN: So people may remember that you joined us last April when the Trump administration’s tariff scheme, tariff program was first announced. And you talked about just what chaos it kind of unleashed. So I just wanted to kind of go back to that and just ask what do you remember, you know, from over the course of the year? Like what stands out for you? Debbie, do you wanna start?

 

MULLIN: Sure. I think it’s funny because I’m sure that Sarah feels the same way that my company has lived many different lives driven by the tariff news since we came onto the show. When we came onto the show last, we had just been announced that Vietnam would have 47% tariffs. And it has taken on many other different values since then. Oftentimes, you know, you have, you have product on the water and you’re not – you have no idea how much it’s gonna cost when it gets here. And it’s, it’s just been a really, really difficult thing that we’ve all had to deal with since we were on the show last.

 

MARTIN: And Sarah, what about you? Because Debbie’s got, for people who remember and also enjoy her products, I mean, the whole, her product is based in Vietnam. Like, that’s the whole point. It’s a Vietnamese coffee, it’s single origin, you know, organic, you know, she knows the farmers. That’s like the whole point. Sarah, as I recall, you source from like China and some from Japan and some from Peru. And so what’s been the year like for you?

 

SARAH LAFLEUR: Yeah, I would say it’s been kind of whiplash after whiplash. I think after surviving the insanity that was April and May, and being on WhatsApp and phone calls with our suppliers through all hours of the night, we started to shift our focus and say, okay, are there other vendors in other parts of the world? You know, we looked at Europe and Turkey, South America. Could they be potential new partners to us? And all these things take an extraordinarily long amount of time. And so it really takes a year to, I would say, set up a new supplier. Meanwhile, there’s more tariff crisis happening. You know, there was a question about whether Europe would face new tariffs with regards to Greenland and what would happen there. And so I would say the uncertainty really never eased up. And I think we’ve, we’ve become somewhat accustomed to living with constant anxiety around these trade rules changing, potentially overnight.

 

MARTIN: You know, some people still think of New York as kind of the center of, you know, fashion in the United States, the garment district, sort of as it were. Just remind people of why you source from all these different places.

 

LAFLEUR: Yeah, of course. You know, actually when I started my business back in 2013 I picked New York in part because there was a garment district and factories with sewers. But one of the many wonderful things that happened over the past decade is that my business grew and we reached kind of small, medium sized businesses and the garment district, simultaneously, has really shrunken over the past 10 years. And so, while small batch production still does happen it really was not at the level or volume or I would say quality that we wanted to offer at my company MM LeFleur. So we started working with factories overseas. You know, a lot of the natural fibers that we get from places like Italy and Germany, we looked to manufacture those in Europe. When we’re looking at synthetic fibers out of Japan, we look to manufacture those in Asia, in places like China and Vietnam. And that is really how most of apparel manufacturing works today. 

You know, there is very little clothing that Americans purchase today that is actually manufactured in America. And I think there was a split moment where we thought, is the long-term vision here – maybe it’ll take 20, 30 years – but is the goal to bring, you know, apparel manufacturing back into the United States that would cost literally tens of billions of dollars to do. But is that the long-term strategy? And I think the whiplash that we’ve seen and the tariffs has kind of quickly shown that that is not going to be the case. And so, you know, we did not even consider bringing any manufacturing back to the United States. Our, you know, path forward was okay, where else, if not China and Vietnam, where else are we going to? Because America does not have the resources to be able to establish the level of manufacturing we require.

 

MARTIN: And Debbie, remind us again of the story of your business. I mean, there’s a reason why that you got interested in a single origin sort of Vietnamese coffee. 

 

MULLIN: Yeah. My family’s from Vietnam and I love Vietnamese coffee and I really saw an opportunity. As we see coffee getting more and more expensive, harder to grow, that Vietnam being the second largest producer in the world, actually has a certain varietal that makes it much more easy to grow organically. And how exciting that would be to be able to come into the US and bring specialty organic coffee at a much more affordable price. And I remember when the tariffs were announced, it was all of those kind of savings that we’ve worked for the last, you know, nine years to really cultivate, felt really eroded. And it’s been such a whirlwind ever since because we do have a – our brand is completely focused around a single origin story. And it’s always felt like it was this unlimited supply. It’s the second largest producer in the world. There’s, it’s okay that we’re limiting ourselves to a single origin. But then once you have such a high tariff on there and there is so much back and forth about what is the Vietnamese government doing in response? Is coffee going to be exempt? And we would hear like drips and drabs this past year for – saying that coffee might be exempt, maybe it won’t be, since we don’t grow coffee, really here. We do a little bit in Hawaii, but it couldn’t even possibly put a dent in the amount of coffee that Americans drink. And so it has to be imported and it just is really hard because it feels like these policies are being put into place. And then the, how it actually affects specific industries, that it really doesn’t make sense to have a tariff is always kind of an afterthought. 

 

MARTIN: You were telling us that the – at one point it was threatened at like almost 50%.

MULLIN: Yes.

MARTIN: Would that have – I mean, sorry, I know it’s a pain point here – but would that have shut your business down?

 

MULLIN: It would’ve, it would’ve been lethal. It would’ve been lethal. We would’ve had to have shut down the business. It would’ve been such a disadvantage compared to any other coffee growing country in the world.

 

MARTIN: Sarah, you were saying in our last conversation, in fact, you’ve said this a couple times in different sort of venues, that unpredictability is the enemy of business growth.

 

LAFLEUR: A hundred percent. 

 

MARTIN: Could you just say more about that?

 

LAFLEUR: Sure. You know, and maybe I’ll speak directly to fashion and apparel, which is what I know.
Any piece of clothing that, let’s say we release it on our website or we put it in the stores tomorrow. If you think about how long it took for that product to get to that point, we’ve probably started designing that product anywhere from 12 to 18 months before. And in order to actually even get to that point where we’re thinking about designing that product, or having to go to fabric shows and pick out the right fabrics, we’re having to go to factories and make sure that we have the right factory partners. You know, it is really at least a year to two year process just leading up to the fact that we are deciding to make that piece of clothing, let’s just say it’s a shirt.

And then after we have the factory in place and we’ve decided which fabric we wanna use, then we go and put in the fabric order. And let’s say that fabric is being manufactured in Italy, and that may take anywhere from two to four months. And then that fabric takes another two months to get on a boat and arrive to wherever it is that’s going to be manufacturing. Let’s say, you know, in this case, it’s Turkey. And, and then it takes another two months to manufacture there and it takes another four weeks to ship to our warehouse in New York. And then it takes another two weeks to then go to the store. So you can see just how long that supply chain is. And I mean, that is really one of the biggest challenges of I think any manufacturing industry that deals with physical product.

But because that lead time is so long, when these things change on a dime, you really have no way to course correct. So if we knew that the tariffs were gonna be implemented in two years time, okay, we can work backwards to say, alright, we know that this cost is gonna be there, so let’s try to factor that in. But when it kind of, gets imposed upon you, you know, and starting in 30 days, or it’s starting in two weeks, by that point the product is already made, all the investments have gone into the, into that piece of clothing. It’s too late. And so you have to release it and kind of take the hit on the margin and then ultimately a loss.

 

MARTIN: You were telling us actually this crazy story of how, was it like a spring line last year?

 

LAFLEUR: Our May collection. Yes. 

 

MARTIN: What almost got –

 

LAFLEUR: Disappeared overnight! 70%, poof! You know what happened? We had a, it was particularly a hard hit collection because so much of that was coming in from China and Vietnam, China, if you remember at one point, the tariffs were 154%. You know, it was something that would’ve cost a hundred dollars to make, suddenly was gonna cost $354 to make. And that simply was not feasible. So we just, we couldn’t even bring in the product.

A lot of our factory partners, I mean, to their credit, they were phenomenal partners to us. And I think, you know, they said to themselves like, let’s play the long game here because this is not gonna be forever. You know, I think there was a lot of talk of who’s gonna call chicken first? And so a lot of our factory partners were willing to hold onto the products sometimes for six months, sometimes up to a year. And we really worked together to overcome this crazy, crazy part of our company history.

 

MARTIN: Debbie, what about you? The farmers you work w–ith, the people that you work with in Vietnam, what kinds of conversations are you having with them? Do they feel like they’re caught in the middle? Do they feel like they’re being punished for something that they don’t even understand or didn’t do? 

 

MULLIN: Definitely. And I think that, you know, similar to Sarah, we’ve been in business for nine years. You know, we’ve, these are many, many years long relationships that we have with the farms, with all of our manufacturers. And how we have had to have those conversations about, you know, we are in this position, we need to figure out how we’re gonna make the costs work, how we’re going to be able to get product to our customers. Because similarly, what’s hard for us is that still the majority of food and beverage is sold in stores. We have a great e-commerce business, but we’re in every single Whole Foods. We’re national with Target. And we’ve been expanded heavily into Target this year. And we had sold it in at a certain price, and all of that has been shipped. And the – you can’t, in terms of shipped, it’s all been decided. It’s all been agreed upon. And you, you’re not really sure because you’re not sure if this is temporary. because if you increase the price and then decrease it, there’s penalties for that actually, with the way that the warehouses work. 

And I think that it’s been really hard for us to think about if we increase our price, how many customers we’re gonna lose, whether that’s someone walking into a store or whether that’s losing your place on the shelf and being able to try to just basically foot the bill in the short term so that you can keep that standing. Not really sure what’s gonna happen tomorrow, how much, we have no idea how much a shipment’s gonna cost when it lands in the past year. 

And I think that’s something that’s been really interesting has been that my whole time working in Vietnam, it’s always felt like the US market has been considered relatively the gold standard. Something that everyone would love to participate in, particularly in coffee. And that sentiment is really changing. And while we have really strong relationships with our suppliers today, when we’ve tried to onboard some new suppliers, we’ve had people say categorically that they don’t wanna work with American companies. They’re terrified of the volatility as well. And how that really hurts the optionality for businesses to be able to get the best manufacturing, quality, pricing for our customers.

 

MARTIN: They say to your face, they say, we’re not, we’re not doing that. We’re not –?

 

MULLIN: Literally, I’ve literally had manufacturers say given all of the tariff, given all of the tariff news that we are not interested in expanding into the US market.

 

MARTIN: Wow. So just to be clear, for some people who still may not get this, you pay the tariffs. Is this correct? 

 

MULLIN: Yes. 

 

MARTIN: You’re the one to pay the tariffs. 

 

MULLIN: Yes. 

 

MARTIN: Because the tariffs have to be paid before your products come into the country. That’s how it works.

 

MULLIN: Exactly.

 

MARTIN: Do you, Debbie, you don’t have to tell me, but I would be interested, how much do you think you paid in tariff fees?

 

MULLIN: Hundreds of thousands of dollars in tariffs last year. Unexpected.

That’s people’s salaries. That’s there. There’s a lot of things. It’s, it’s the marketing support that we need to be able to get a small brand out there that’s new. There’s a lot of things that we really had to make hard choices as those tariffs started to really roll in. And we kept, you know, every day waiting for – because we’d hear murmurs that coffee was going to be exempt, but we paid those tariffs for you know, I believe it was six months.

 

MARTIN: So that brings me to my next question. The Supreme Court struck down the president’s tariffs, tariffs program in its current form. Within hours the administration said that there was gonna be this new, across the board tariff, using a different trade law, initially 10% signaling it could rise. But some companies are already asking for refunds. Are you, Debbie, are you gonna ask for – Sarah, are you gonna ask for refunds? Fedex is already, I mean, I can name FedEx because this is a public issue. Fedex has already said they want their money. 

 

LAFLEUR: Oh, we want our money back. Let me tell you, that was one of the first calls we made. You know, we made our – we spoke to our lawyer, you know, we, we said, what do you think the chances are? Let me be clear, I’m not holding my breath. You know, I, I think we saw this with the ERC during COVID. It ultimately took two, three years. And I know that process was an absolute disaster. And I’m not sure we’re ever gonna see our tariffs back again, but, you know, I’m with Debbie on this one. We were estimating that we probably spent somewhere between a million, 2 million in tariff dollars. And to be clear, that has cost us jobs. We’ve had to eliminate roles. We’ve had to pass on some of the cost increase to the customer. It has been net negative. And, you know, I’m just, I just wanna kind of put that into very, very concrete terms because I think, you know, the thought coming out of this was that the tariffs were then gonna supposedly like fund something incredible. And I just as a, I just say this as a consumer, I have not felt the benefits of the tariffs in any part of my day-to-day living. 

 

MARTIN: And Debbie, I take it the same is true for you. 

 

MULLIN: If anything, I, I know that because so many of us view the tariffs as potentially, you know, temporary, a lot of us have just kind of foot the bill. And, the same way that if you’re a small family and you have some type of big crisis happen, do you sell your house right away? No. You, you spend your savings and assume that things are going to get better. And I think that some, a lot of great brands are gonna be at a pretty bad crossroads around how, and I think they’re, people are going to have to raise their prices. As we look into 2026, you’re gonna see prices raise a lot from these tariff dynamics.

 

MARTIN: I’m just listening to both of you and you’ve both, you have figured it out. I mean, the fact is you’re still, you’re both still here. You’ve kept your businesses going. And, you know, you’ve had new sort of products coming out, so some people might listen to you and say, Hey, well, you guys are figuring it out. So, you know.. <Corsstalk>

 

LAFLEUR: We’re certainly figured it out. Maybe I, I would say, you know, and I – our teams are extraordinarily resilient and I am so proud of them and proud of us for how we’ve met the moment. And it’s been a real challenging year, but we’re here and we’re still standing. I am so proud of that. I will also say resilience is not a strategy. You know, resilience is not what grows the company. We’re here to scale businesses. We’re here to achieve, you know, more profitability, to be able to hire more people and, and really grow the business and deliver really fabulous products to the customers who love the brand. You know, that’s the dream. The dream is not survival. And so I think the tariff over the past year has just been, it feels knee-capping and has certainly delayed the dreams that I’ve had for the business for at least a year, if not longer.

 

MARTIN: Debbie, what about you?

 

MULLIN: I agree. I think it’s impossible to have a strategy in this amount of unpredictability. And I think that that’s gonna stifle innovation. Whether that means within companies like Sarah and my own, where we have stripped down our teams due to all of these tariff costs, to be able to just fight another day. All the way to people not being able to start new companies and bring new ideas to life because it’s such a difficult environment to be able to start and grow a business.

 

MARTIN: Okay. Debbie Wei Mullin, Sarah LeFleur, thank you both so much for talking with us.

 

LAFLEUR: Take care. Thank you.

MULLIN: Thank you.