$42 million.
That was the estimated increase in the cost of goods Lee Mayer calculated her company would have to pay after April 2, when President Donald Trump announced sizable reciprocal tariffs on goods imported from other countries.
Havenly, which Mayer cofounded in 2014 in Denver, is one of the nation’s largest online interior design companies that connects designers virtually to consumers. It also sells furniture, including custom sofas, primarily made in Asia. The U.S. trade war with China ratcheted up quickly in early April to a 145% reciprocal tariff on Chinese imports, essentially turning a $1,000 sofa into a $2,450 one. The rate has since fallen.
“So, $42 million is a big number for a company like ours,” Mayer said while on a panel about trade during the Colorado Business Economic Outlook and Forum last week. “That number has gone up. It has gone down. I think the lowest estimate sometime during the pause was $8 million. Now we’re back up to 24. It’s not a small challenge.”
Since that day in April, described by Trump as “Liberation Day,” many Colorado companies have made fast decisions about orders, prices and operations. Some are hoping for the U.S. Supreme Court to invalidate the tariffs, a decision that is expected soon.
But many had to move ahead with major decisions, as Trump’s trade war continues eight months later. Finnish quantum-laser developer Vexlum paused its U.S. expansion in Broomfield due to the uncertainty. Golden-based Vescent, a quantum laser maker for atomic clocks that employs about 60 people, is now planning to move some production to Europe to save money.
Scott Davis, Vescent’s CEO and cofounder said that some key components are only available from Europe and that means having to pay a tariff greater than 50%. European competitors don’t have to pay that.
“They then incorporate those components into their products and ship to the US at only a 15% import tax,” Davis said in an email. “We are going to be moving some manufacturing to Denmark which will save us tariff costs.”
Philip Makotyn, president of Vexlum US, said the company passes costs on to customers. And customers have limited choice. “If you want the laser we build, they’re only available from one company, my company,” he said.
The commercial quantum industry is small, fragile, spread out around the globe and that causes inflexibility. Many of the companies rely on government funding, as part of research grants, and you can’t just ask for more money later on.
“There was a lot of scrambling having to be done, of ‘Oh shoot, I have this critical piece of technology sitting on the dock but I can’t pay my shipping company because my budget is really fixed,’” said Makotyn, who was on the same panel. “That didn’t allow for flexibility for many of these government lab or academic researchers who are making many of these breakthroughs to adjust to the tariff policies unfortunately.”
Havenly has adjusted to policy moves and out-of-its-control forces before. It made changes after the first Trump administration and during the COVID pandemic.
And the company continues to look for new sources of materials in case taxes on components, like wood, suddenly spike. For some products, Havenly added an import fee that changes with the tariffs and could one day be removed. It’s considered assembling furniture in the U.S. to reduce costs of shipping in finished products. And it sources manufacturers with plants in more than one country, “so that on a day’s notice, we can transfer future orders to another factory,” Mayer said.
That’s helped the company survive. Customers have also returned since April. “We saw a pretty strong Black Friday,” Mayer said.
Even the state of Colorado is still assessing the impact and working on responding. In September, a report from the governor’s office calculated that Colorado’s effective tariff rate was now 21%, compared with 3% last year. In a report last month, the state’s agriculture, labor and economic development agencies shared tariff-impacted nuggets like these:
- Tariffs were viewed as more negative (86%) than positive (14%) primarily due to the extra costs that directly hurt the business and the loss of sales in international markets, according to Office of Economic Development and International Trade interviews with business leaders. One put the loss at $2 million to date, while others were spending as much as 100 hours navigating the changing trade policies.
- However, the potential increase in domestic business was a highlight though “leaders indicated that this benefit has not been realized yet.”
- 80% of the 16 respondents to an agriculture survey expect sourcing difficulties, delivery delays and higher prices on raw materials, fertilizer and equipment.
- There also has been a loss of sales of dry beans to Europe and Mexico, while the state’s top commodity exports, wheat and beef, are seeing foreign customers look for non-U.S. alternatives.
- One benefit is the new federal trade policies, like with Japan, which have opened the Colorado potato market to a new consumer.
The state’s Economic Development Commission also approved $1 million for tariff mitigation. Most of the funds will go to OEDIT to partner with the World Trade Organization Denver to advise and provide training to small businesses. About $175,000 will be used to promote and market the effort to make sure those who need it, hear about it. This launches in early 2026.
“Across Colorado, business owners are feeling the weight of changes caused by U.S. Tariff Policy. As the cost of doing business rises, they face tough decisions like raising prices, reducing salaries, letting go of employees, or whether they can even keep their business open,” Eve Lieberman, OEDIT’s executive director, said in an email. “We are here to help them chart a path forward, so we can work together to retain Colorado jobs and keep our economy strong.”
U.S. tariff collections triple, as Colorado exports rise but import values fall
The Trump administration rolled out the reciprocal tariffs in an attempt to balance the U.S. trade deficit and pay off the national debt. Since higher tariffs and potential retaliation from America’s import partners were anticipated, many companies front-loaded their orders in the first quarter.
In February, Colorado’s import values grew 1.4%, from a year earlier. But by August, the state’s imports had fallen 2.8% from a year earlier, according to the most recent federal data available. For the first eight months of this year, the state’s imports have fallen 2.6% to $11.1 billion compared with the same period last year.
However, exports, which were down 7.9% in February, improved. In the same eight months, Colorado’s export values grew 6.3% to $7.6 billion, according to U.S. Census Bureau’s USA Trade Online.
The state has seen declines in import and export values with its three top trade partners: Canada, China and Mexico. We’ve charted the one-year changes for the three countries for the first eight months of 2025 compared with 2024 in this chart:
Nationwide, more money was collected at the nation’s borders. The latest U.S. Treasury report had customs duties bringing in $30.76 billion in November, compared with $6.71 billion a year ago. The total collected so far this year is around $240 billion, or triple the approximately $72 billion in collections for the first 11 months last year, according to Treasury data.
That helped shrink the trade deficit, which dropped to its lowest level since June 2020, at $52.8 billion, The New York Times reported. The White House linked to The New York Times story in its statement touting the achievement and added that U.S. exports grew 6% over last year.
“President Trump’s tariffs have actually secured trillions in investments to make and hire in America as well as historic trade deals that finally level the playing field for American workers and industries,” White House spokesperson Kush Desai said in an email.
But Trump has apparently noticed that some are reeling from the policy changes, including farmers and families. The president has talked about sending $2,000 checks to taxpayers as a tariff dividend, though he’d exclude “high income people.”
Last week, the Trump administration made $12 billion available to American farmers “in response to temporary trade market disruptions and increased production costs,” according to a news release from the U.S. Department of Agriculture.
It’s too soon to know how this will roll out but Glenda Mostek, executive director of the Colorado Nursery and Greenhouse Association, said there’s apparently $1 billion earmarked for specialty crops, including fruit, vegetables, nursery, greenhouse and timber.
“CNGA will be following with great interest to see how that is structured,” Mostek said in an email.
Would you buy a $1,400 sofa for $4,000?
It’s not so easy to move production back to the states, especially for small and medium-size businesses. And if they did, it’d be tough to compete with companies tapping into the manufacturing ecosystem China has perfected over several decades.
Mayer, with Havenly, said she’s tried.
“We’ve priced out manufacturing in the United States,” she said. “Our flagship sofa, called the Sloan sofa, costs about $1,400. It’s custom made. Was out of China, now Vietnam. We priced it here in the United States and for the same quality, so no improvement in quality, same material, it would probably cost at retail value $4,000. So, you’re asking people to pay significantly more for the same amount of quality, for what, the privilege of having American hands?”
Making sofas isn’t the same as producing tons of computer chips, which have higher margins and a more willing U.S. workforce but also national security concerns. That didn’t stop the reciprocal tariffs from being based on country, not on specific items, like in Trump’s first administration.
“It’s clear that there are some areas where the United States wants to and should put their thumb on the scales to help both enabling technologies and manufacturing here. That makes total sense,” she said. “The hard part for industries like ours is if you think about it this way, it’s sort of low value. It turns out, (no one’s) standing in a factory all day stitching cushions. It’s not fun work. No one wants to do it. It’s actually a skilled trade. (But) you don’t really have upholsterers in the United States anymore.”
Mayer’s been thinking more about the unorthodox methods the Trump administration has brought to the federal government, like making deals with chipmakers Intel and Nvidia. She’s not advocating for the federal government to swap investment for equity in private companies but to find more ways to get capital to American businesses that could really use it.
“I’ve said it before, it makes sense to encourage American manufacturing of strategic industries, whether through sticks (like tariffs, applied more surgically) or carrots (like investment or tax credits), but these tariffs are broad based, so it will be interesting to see what transpires,” she said in an email. “I’d bet economists will be studying this period for many decades to come.”