UPDATE: Los Gatos small businesses are reeling from the impact of President Donald Trump’s tariffs, prompting store closures and significant price hikes. Local business owner Sara Fung, who has operated her home furnishing store, Cotton Works, for nearly 25 years, announced she will close the shop six months shy of its anniversary due to soaring costs linked to the tariffs.
Fung revealed that costs surged after the announcement of the “Liberation Day” tariffs in April. “It’s just hard to have a price so high, and I don’t see the economy’s going anywhere except down,” she stated. The cumulative effects of inflation and tariff-induced price increases have left her with no choice but to retire earlier than planned.
The impact of these tariffs is evident across Los Gatos. Domus Gift Shop owner Margaret Smith reported that many of her imported items, including linens from India and salad bowls from Brazil, face tariff rates as high as 50%. “The companies who import have to pay that tax, and then they pass it on to me, and I’m passing it on to my customers,” she explained.
Dining establishments are not exempt. Sunny Choi, manager of Danbi Korean Restaurant, expressed concern that the increased costs of imported goods from China and Korea, with tariffs up to 30%, could force her to raise menu prices. “This actually trickles down, so it’s like a butterfly effect,” Choi warned, indicating potential layoffs if customers shift to takeout or stop dining out altogether.
Luxury businesses are also struggling. Babak Falasiri, owner of Serapi Rug Gallery, noted that handmade rugs imported from multiple countries are now prohibitively expensive due to tariffs. “Even for a few hundred dollars, for the customers, it’s difficult to justify,” he lamented, highlighting the precarious balance between maintaining customer satisfaction and sustaining business viability.
The Los Gatos Chamber of Commerce is stepping in to assist affected businesses. Executive Director Jennifer Lin announced a workshop scheduled for November 2025, aimed at educating local business owners about the provisions of Trump’s recently passed economic legislation and its impacts.
As local businesses face an uncertain future, Professor Alan Sykes from Stanford University emphasized the broader implications of these tariffs on U.S. trade policy. He noted that while the tariffs aim to reduce the trade deficit, they are heavily impacting local economies, particularly in areas with a strong commitment to supporting small businesses.
With the situation evolving, many business owners are considering protests or boycotts against the tariffs. Sykes suggested that citizens dissatisfied with the current tariff policy should advocate for politicians who support open trade.
As Los Gatos businesses brace for the fallout, the urgency for change is palpable. The ongoing effects of the tariffs are reshaping the landscape for local entrepreneurs, raising critical questions about sustainability in the face of mounting challenges.
