Navigating Tariffs: How a Small Business Adapts to Changes

Szeliga, the owner of Fishtown Seafood, operates three retail and wholesale locations in Philadelphia and Haddonfield, N.J. His business specializes in a variety of seafood, with briny, slurpable oysters making up the bulk of his sales. Notably, 60% to 70% of these oysters are sourced from Canada. However, the Trump administration’s inconsistent 25% tariffs on Canadian imports have left Szeliga feeling the strain, as the unpredictable nature of these tariffs complicates his business planning.

The Impact of Tariffs on Small Businesses

The fluctuating tariffs have created a chaotic environment for Szeliga, who expressed that the “chaos and shock and awe” approach to negotiations makes it nearly impossible to effectively plan for the future. “You can’t actually really business plan based on knowing what is and isn’t actually going to happen,” he lamented. This uncertainty poses a significant challenge for small business owners like him, who rely on stable pricing and supply chains.

Adjusting to Price Increases

Recently, Szeliga received notifications from most of his suppliers indicating that they would be raising prices. During the last tariff period, he made a single purchase of “sweet petite” oysters from Prince Edward Island to ensure that a wholesale client had enough product. He absorbed the entire 25% markup himself, choosing not to pass the additional cost onto his clients. This decision reflects his commitment to maintaining customer relationships, even in the face of rising costs.

While the postponement of the tariffs may provide temporary relief, Szeliga is aware that this reprieve is only for a month. He plans to use this time to adjust his inventory and collaborate with his wholesale clients to develop menus that will be less impacted by potential future tariffs. This could involve substituting higher-priced, premium oysters with more affordable domestic or lower-priced Canadian options.

Strategizing for the Future

“Now that we have a picture of what this is probably going to look like, let’s just start designing out your menus so that we’re prepared and it’s not complete bedlam again,” Szeliga stated. He is proactive in asking his clients, “What products are going to work for you in a month?” This forward-thinking approach is essential for navigating the unpredictable landscape of tariffs and supply chain disruptions.

Seafood Imports and Market Trends

The total value of U.S. imported seafood in 2023 reached an impressive $25.5 billion, with Canada being the largest supplier, contributing over $3.6 billion in seafood products to the U.S. market. In fact, imports of seafood from Canada increased by 10% in 2024, totaling $3.96 billion, according to the USDA. While oysters represent only a small fraction of this market, the demand for them has been steadily growing.

In 2022, oysters gained significant popularity, making their way onto menus in various restaurants beyond just oyster bars. Szeliga has observed this trend and is concerned that the growth may now “fade and fizzle” due to the ongoing tariff issues. He is contemplating limiting the number of oyster varieties available in his shop to manage costs effectively.

Conclusion: Resilience in Uncertain Times

As Szeliga navigates the complexities of tariffs and their impact on his business, his resilience and adaptability shine through. The challenges posed by fluctuating tariffs on Canadian goods underscore the importance of strategic planning and customer communication in the seafood industry. For small business owners like Szeliga, staying informed and proactive is crucial to weathering the storm of economic uncertainty. The future may be unpredictable, but with careful planning and a focus on customer needs, Szeliga aims to keep his business afloat amidst the chaos.

For more insights on how small businesses are coping with economic challenges, check out the original article here.