WUNC - In 2021, Karina Zimmerman opened Honeypress as a pop-up stationery store, where one could purchase high quality pens, washi tape, Studio Ghibli and Moomin planners, and Lunar New Year red envelopes. Zimmerman has a boundless passion for Asian stationery, but running the business has not been easy. Honeypress briefly had a brick-and-mortar location at Boxyard RTP, which closed in 2024.
The last year was especially difficult for the shop after President Donald Trump imposed broad tariffs that hiked up the cost of imports from many countries. Zimmerman said that up to 70% of Honeypress' products are imported from Asian countries.
"My business can't run without imports because the basis of it is Asian stationary — its appeal, its novelty, the quality is what people flock to," she said.
On April 20, business owners flocked to the U.S. Customs and Border Protection's new online portal to apply for tariff refunds. N.C. Attorney General Jeff Jackson last Friday urged businesses in the state to apply for them.
"These tariffs cost North Carolina families and businesses $3.5 billion," Jackson said in a press release. "That was money people needed for food, gas, and running their businesses. I hope eligible businesses act now to apply for refunds. The newly announced system is a good first step, but we need a faster process for refunds that doesn't burden businesses."
Confusion around the online portal
When Zimmerman tried to figure out how to use the portal, she found it confusing and learned that only "importers of record" were eligible to apply for refunds. Honeypress had worked through a brokerage firm, like DHL, FedEx, and UPS, to ship products to the U.S. Those companies are authorized as importers of record to apply for refunds.
"Now, I'm left to be at the mercy of these brokerage firms," Zimmerman said. "There's no guidance in terms of when we would be issued (the refund) or what they would consider as eligible. So for me, as a small business owner, I'm just playing a waiting game because I am powerless to do anything of my own."
Zimmerman said the cost of paying tariffs, plus the removal of the de minimus trade exemption, ate roughly 30% to 40% of her profits. She tried to minimize price increases to Honeypress' products — however, to keep her profit margins consistent after factoring in shipping, broker fees and tariffs, a notebook that would have cost, say, $8 to $10 before tariffs had to increase to $12 to $14.
Zimmerman said it's become increasingly difficult to sustain Honeypress as a business.
"It's like (I'm) running the business for free or even at a deficit," she said. "I've seriously had to consider whether or not I could keep going."
"Free money" for importers
Andrew Greenland, assistant professor of economics at North Carolina State University, is skeptical that businesses who worked through a third party will receive the refunds they're owed.
"Someone will get something back," he said. "The broker who imported everything and has the paperwork that shows the documentation that they paid for the tariffs and sold the (goods) onto the business owner. Any of the subsequent reimbursement — that's going to have to be a negotiation between them and the broker. It's not obvious to me that that third party has any legal obligation to pay that back. Maybe you get it back if that broker thinks that not giving it to you would mean they lose subsequent business."
Greenland further noted that it's not clear cut how much each person paid for the cost of the tariffs. The primary importer has to pay the tariff, he said, but they might pass all of it or sometimes a portion of it down to the business that wants to sell the products, and that business passes on some of the costs to the consumer. But he asserted that for primary importers, the refunds are "free money."
"Because if you're the primary importer and you pass all of the tariff costs on to people who are further down in your supply chain, well those people have already reimbursed you for the cost of your tariffs, right?" Greenland said. "So the rest of us end up paying for it. Meanwhile, you've lost businesses that have gone out because supply chains have gotten worse and costs have gone up for them."
Since the online refund portal opened last week, about 15% of tariff refund claims have been rejected, according to a legal filing by U.S. Customs and Border Protection.
Political climate forces business owners to be strategic
Sam Ratto, who founded and has operated Videri Chocolate Factory in Raleigh's Warehouse District since 2011, largely imports cocoa beans from the Dominican Republic and Columbia, as well as Ecuador, Peru, Tanzania, and Guatemala. Ratto said he had to stop importing cocoa beans from Vietnam, due to the high tariff rate imposed on Vietnamese goods.
Ratto said he tried to work with vendors who had a relationship with U.S. Customs or a tariff agency, and, in anticipation of a potential refund process, Videri shifted away from working with vendors who didn't offer to pay the tariff. He said that he has a good relationship with his cocoa bean broker.
"They started putting the tariff line item on all our invoices so they had a better shot of getting a refund if it ever came in," he said.
He didn't have an exact figure for how much he paid in tariffs last year, but said "if we spent a couple hundred thousand dollars on the cost of goods last year, I'd say you're looking at an additional 20% to 50% of tariffs we did not budget for."
"I think it's insane that somebody decided that they would pay for their tax cuts by taxing small businesses," Ratto said. "I think it's insane history is repeating itself in this way in the name of 'American security.' … It's really difficult to keep going through these cycles as a business owner, but I love what I do and I love the community that I'm in. I make bean-to-bar chocolate and I'm going to keep trying to do that as long as I possibly can."
