ESTES PARK >> How could the Trump administration’s steep tariffs on imports from China trickle down to tourism-dependent mountain meccas such as Estes Park?

Retailers such as Rajiv Poudel and Maureen McCann brought it home on May 5 to a roomful of business owners who attended a panel discussion at the Holiday Inn.

“Over 80% of our gift items come from China” such as shot glasses and magnets, said Poudel, owner of Estes Village.

Added McCann, owner of The Mad Moose, “When we opened our first invoice” to stock up for summer, “I was like, ‘OK, there it is. Line-item tariff. It’s here, whether we like it or not. It’s a little frightening, because I don’t want to have to increase my prices, but I think for some particular items, I might have to.”

Poudel said he saw the same thing on an invoice he received the week before: an unannounced line item for tariffs. “We’re fighting that, along with trying to keep our business afloat,” he said.

Even so, panelists Scott Applegate, president and CEO of the Bank of Estes Park, and Mark Ell, owner and financial adviser at Centennial-based Alpha Capital Management Group, tried to inject notes of optimism.

Ell cautioned Estes retailers to “brace yourself” for the rapid changes in the administration’s tariff policies as they prepare for the town’s short but intense tourist season, but Applegate noted that because of the consistent drawing power of the village at the gateway to Rocky Mountain National Park, “it will be OK.”

Rocky Mountain was the fifth most-visited national park in 2023, when it welcomed more than 4.1 million people despite imposing timed-entry restrictions during its peak seasons.

If the tariff situation “kind of corrects, and consumer confidence picks up again, they will still come from farther away. They’ll stay longer, and they’ll spend more with bigger-ticket items,” Applegate said. “If consumer confidence remains kind of subdued, which is where we are right now — there’s a lot of uncertainty because people don’t know what to expect — well, they’re going to come from closer. They’re going to come from nearby, they’re going to spend less and buy smaller-ticket items. We’re not shock-proof in Estes Park, but we’re definitely shock resistant.

“Expect Estes Park to perform better than the national economy,” he said.

When the American Society of Travel Advisors surveyed its members in early April, it found that nearly 54% of those travel agents reported a decrease in consumer demand driven by economic concerns. The MMGY Global marketing agency surveyed 1,000 adults April 3-5 and found that 83% still intended to travel — down only 4% since a similar survey in February — but a third planned to travel closer to home.

In addition, countries such as Canada, the United Kingdom, France, Germany and others have issued travel warnings for those considering visiting the United States.

Ell acknowledged that the administration’s tariff policies are “changing every day, and that’s really the tough thing to put your thumb on.

“Tariffs are implemented. They’re current. They’re existing. They’re happening right now,” Ell said. “We’re already seeing some supply delays. We’re already seeing shortages, and we’re already seeing price hikes, which is rolling into what we would call inflation. That’s already being baked into the markets.”

When reciprocal tariffs went into place on April 2, what President Donald Trump called “Liberation Day,” Ell said, “some of these countries are 10% to 50% tariffs, but the big one is China at 145%.

“That’s where a lot of our products come from,” he said. “The way U.S. imports work in China is that they send us about $440 billion worth of products every year. The U.S. sends about $150 billion of our products to China every year, so there’s a trade deficit of about $300 billion. Most of the items that are affected by tariffs coming from China that you mostly hear about are toys. Smartphones, computers and consumer electronics.”

Analysts say cumulative U.S. duties on some Chinese goods are reaching 245%, and China has slapped retaliatory levies of 125% on American products, leading to a near trade embargo between the two nations and bringing nearly $600 billion in annual bilateral trade to a near standstill. Besides unsettling the markets, the dispute has disrupted supply chains and intensified fears of a sharp global downturn that envoys of the two countries are meeting in Geneva, Switzerland, this weekend to try to dampen.

The gamble for U.S. business, Ell said, is “will deals be made? Are they going to be successful? If you’re a negotiator and you can’t seem to strike a deal, the first thing you do is extend it. You would take more time and extend the implementation of some of these tariffs to allow the deal to come to fruition. If that doesn’t work, you have to retreat on your policies. You give up. We’ve yet to see how that’s going to lay out in the coming months, but the risks are what are creating this uncertainty.”

That uncertainty has led to volatility in stock markets, he said. “We’ve actually gained back half if not a little more than half of the losses in your personal investments,” he said.

“Right now, we are not in a bear market,” he said. “We’ve seen a correction, but we are not fully into what we would call a bear market. We’re certainly not even close to what we would call a recession, even though that word has been brought up on the news.”

J.P. Morgan Research in early April raised the probability of a recession occurring this year from 40% to 60%. “The latest unwinding of the Liberation Day tariffs reduces the shock to the global trading order,” its analysts said, “but the remaining universal 10% tariff is still a material threat to growth and the 145% tariff on China keeps the probability of a recession at 60%.”

An analysis from Goldman Sachs added that even though Trump on April 9 paused most of the reciprocal tariffs he announced a week earlier, he left 25% tariffs on Canada, Mexico, and cars in place, and that whopping 145% reciprocal tariff on China.

“The remaining tariffs and the uncertain outcome of ongoing negotiations have damaged consumer and business sentiment,” according to the Goldman Sachs analysis. “The Conference Board’s Expectations Index has tanked to 54.4, the lowest since October 2011. Meanwhile, the University of Michigan’s sentiment survey shows respondents now believe inflation will surge to 6.5% in the coming year.”

In a note to clients last Tuesday, Goldman Sachs analysts wrote that “we expect the U.S. tariff rate on China to drop to around 60% relatively soon” and that China is likely to reduce tariffs on the United States by a similar amount. “The potential for a significant cut in the tariff rate on China would be a win, but it would still represent a huge new tax on imports that will likely cause U.S. companies to either increase prices or take a hit to their bottom line,” the analysts wrote. “As a result, even a significant cut in the tariff rate to 60% would be an economic headwind, keeping recession risks on the table.”

Still, Ell told the Estes Park retailers that he clings to optimism.

“I tend to try to shield myself personally from a lot of the negativity because I can only control what I can control,” he said. “So that’s what I would leave behind with you is to try to be optimistic. Hope for the best, plan for the worst. You have direct control over your companies, your personal investments, and that’s all you can do.”

The decline in consumer confidence is “going to potentially affect what happens here locally with your local businesses, tourism, spending patterns and so forth.” However, he added, “I think the data of a drop in consumer sentiment, is as it relates to the market drops we saw in mid-April. I think if you were to go out and survey again” the mood might be brighter because “data’s always late when it hits the airwaves, and it’s changing so fast. Markets have come back quite a bit.”

Ell’s optimism, he said, comes because “almost all the market strategists I talk to suggest that if we do see a recession — which would be three quarters of negative (gross domestic product) , and we’ve already had our first quarter of negative GDP — the reality of it is that it would be very shallow and short lived. It’s not something like ‘08 or ‘09 during the housing crisis, or even during COVID, when that was short but that was a fairly significant drop.

“This will be fairly temporary, and we hope that the administration would change policies,” Ell said. “Everybody that knows Trump knows he’s big on the economy, and I don’t think personally that he would let the economy fall into recession,

“And you’ve always got the dry gunpowder of the Fed lowering interest rates too to help out with some of this as well.”

That interest-rate cut didn’t happen Wednesday, however. Federal Reserve chair Jerome Powell kept the central bank’s prime interest rates steady and said he’s in “no hurry” to lower them. That prompted Trump to lash out in a Truth Social post, calling Powell a “FOOL, who doesn’t have a clue.”

What does all that mean for Estes Park business owners?

“Everything he just mentioned has the exact same impact on the value of what you’re doing for the exact same reasons,” Applegate said. “Retailers are ordering more than they might have otherwise ordered, which is why GDP was actually negative” in the first quarter.

“There’s a lot of uncertainty, which is why consumer confidence is low,” he said. “Families, where the rubber hits the road, might be trimming their travel plans. They might be looking at their spending plans.”

However, Applegate said, his optimism is fueled by Estes Park’s resiliency through such events as the Big Thompson flood of 1976, the Lawn Lake flood of 1982, the deluge of September 2013 and the evacuation of the town as wildfires threatened it in 2022.

Recalling a 1970 hit song by James Taylor, Applegate noted that “I’ve seen fire and I’ve seen rain.

“We’ve seen it all up here, but we’re fortunate,” he said. “We’ve learned that people will come to Estes Park. The day they put out the fire, people were coming up.”

That doesn’t necessarily translate to more business, Poudel said. He noted that visitation is up so far this year compared with 2024, but does that mean they’re “in our shops with people spending? Absolutely not. For rrestaurants, it’s the same thing.

“In Colorado, our population has grown so much, so Estes Park is a very viable destination for people to come and visit, only an hour and a half from Denver,” Poudel said. “Does that mean they’ll come and spend as much as they used to? We’re not seeing that.”

Applegate advised store owners to “put stuff on the shelves. The gamble is, what’s that mix? Is it big-ticket items or is it little-ticket items? On that spectrum, where are you going to fall? So that’s your math. You know your customers.”

Poudel said that before coming to the late-afternoon panel discussion on Monday, “I actually got three phone calls saying ‘I have your order ready, packed up and ready to ship, but I need a credit card. Right now, the economy is very volatile, we want payment up front if you want to get your goods to you.’

“One I was able to negotiate,” he said, “but two of them, I said, ‘Put it on hold. If you can find somebody in Estes Park to buy those goods, you can sell it to them.’”

He said some of the imported goods he’s ordered are stuck on ships in Los Angeles, Long Beach and Miami.

“When a container ship leaves China, it takes 20 to 40 days for it to get here,” Ell said. “We’re seeing a dramatic decrease in the amount of container ships that have left China, so orders have dramatically fallen off.

“What happened prior to orders falling off is that everybody stocked up. Maybe some of you have done that,” he said. “You probably were a little bit scared of tariffs so you built up some inventories to get that stuff now before tariffs go into place. What we’re seeing right now is that orders have dramatically fallen off from China to the U.S. So we do know that there’s a great potential for something maybe not so good happening in the near future with the supply chain.”

Stocking up in advance is exactly what McCann did, and now she admits it “frightens me a little bit.” She even added an extra storeroom to hold it all. But now what?

“Hopefully the crowds do come, but I don’t want to have so much merchandise on my shelves going into October, November, December,” she said. “From Memorial Day to Oct. 15, that’s 70% of my business. That’s a big chunk.”

Her inventory is “up about 20%, 30% over what we normally would be” at this time of year, McCann said, but added that she stocked up with caution as well.

“We knew tariffs were coming,” she said, “but we also made the strategic decision. We really went into our data and mined it and said, ‘What are the tried and true?’ I used to take risks; we’d go to shows and buy some merchandise. But this year, I only purchased tried-and-true things that I knew would sell: T-shirts, stickers, magnets, shot glasses.”

Applegate advised Estes Park retailers to “order ahead to avoid tariffs but don’t over-order. If you order too much, tariffs could be gone next week. Tariffs could be gone by June. And you ordered inventory to last you through November, you now have this carrying cost that’s just sitting there. And if you put it on your line of credit, now you have interest carrying.”

To procure that extra inventory, retailers such as McCann and Poudel used credit cards, and McCann acknowledged that “it’s nerve-wracking to put all this money on credit cards because our cash flow is low right now because we don’t start our busy season until Memorial Day.”

Also, Poudel added, “with credit cards, now a lot of vendors are tacking on a 3% processing fee. Just between credit-card fees and shipping, we’re looking at 15% to 20% more costs.”

Still, Poudel said, “the line of credit helps because we are approaching summer, with a bunch of employees coming, so we can’t just cut hours to save money.

“I’ve got payroll and rent,” he said. “I’m not trying to put my vendors on the back burner, but they are.”

Applegate said he understood the cash-flow dilemma but noted the risks of using credit to pad inventory.

“Be liquid. Be liquid. Be liquid. Be liquid,” he said.

“I can’t just say get a line of credit. I have to say it because I’m a banker,” Applegate said. “You need to not use your credit card if you can avoid it, and you don’t just need a line of credit, you need a right-sized line of credit. You need a line of credit you are able to revolve that lines up with what you’re going to spend and so that what you sell will pay it off. A good banker will be able to come up with that really easy.

“Cash is king,” Applegate said. “It solves problems. It secures discounts. It gets responses now. It expedites processes. And it’s the best favor you can do for yourself in an environment exactly like this — and most other environments.”

He also cautioned against over-ordering.

“Get what you know that you’re going to need for the period of time you know that you’re going to be busy,” he said. “Don’t go too long, and definitely don’t go past summer. You have other vendors, you have other products.”

That’s what Poudel is doing, even though he also ordered about 30% more inventory than normal.

“We’re targeting local companies, Colorado-based companies that are actually producing. We’re working with Colorado companies so we can actually drive to Longmont and pick up the items just to save that fraction of the cost.

“We’re seeing as retailers that shipping costs are 10% to 15% more,” he said. “If we’re driving down the hill and picking those things up, we’re saving that 10% to 15% in order to not have to pass that along to the customers but still try to maintain our profit margin.”

Poudel came from Nepal as an international student and moved to Estes Park shortly after graduating from West Virginia University. His wife, Vita, came to the United States from Ukraine as a work and travel student. Along with other business partners, they own and operate Estes Village along with Lonigan’s Irish Pub and the Himalayan Curry and Kebob restaurant.

“At Estes Village, we take pride in supporting local Colorado artisans,” Poudel said. “We’re focusing on promoting those items that support each other and the local economy. That’s how we’re thinking about tackling this tariff crisis.”

One way McCann is trying to boost sales at the Mad Moose is that “we’re trying to create some experiences to keep people in the store longer. We brought in some life-sized animals so kids can play, and I noticed this over the weekend: Kids are playing, so Mom and Dad are shopping longer.”

Another key, she said, is for retailers to work together. During construction of the Downtown Estes Loop project last year, she and several other merchants created a “Retail Rally” punch card.

Visitors could get a hole punched in their cards for every $20 they spent at participating stores between Memorial Day and Labor Day. Once they collected 15 holes, they could drop their card into a box at any of the stores and be eligible for a $1,000 prize at that store. She’s working with Visit Estes Park to get retailers to participate in the promotion again this summer before a deadline this Thursday.

Ell repeated that he hoped events surrounding tariffs would settle down soon.

“I believe if we sit down and have this same roomful of people in July, my hope is that it’s a completely different conversation in the sense that you’re going to have the customer counts that you’re hoping for. The big question is, what are they going to buy? What’s the per-person transaction cost going to look like?

“I think it’s going to be temporary if there’s any sort of pullback in consumer spending,” he said. “You have really low unemployment. It’s roughly about 4%, which means people in the United States are getting paychecks. In the United States, we spend our checks. Will that be travelers coming from the East Coast, West Coast coming here to our national park? That part, I’m not sure. But there’s 4½ million people here in Colorado that can easily jump into a car, or come from Kansas City, come from Texas, come from Montana, come from Utah, that probably are going to be here.

“I think that your counts are going to be normal. It’s just a matter of getting them to spend the money to take these store-bought items home. So I’m optimistic. I believe that will probably come to fruition.

“The whole tariff thing: I’m optimistic that there’s going to be resolutions and deals made,” Ell said.

“It may not be with China, so maybe you’ve got to switch suppliers and find somebody that you’re not even aware of. I think you have to be nimble, and I think that message was loud and clear.”

Even though he predicted resolution by July or August, he admitted “that’s already past a lot of your tourist season. But I do think you guys are going to be fine. That’s just my hope, but I’m hoping it’s reality.”

To make sure of that, Applegate advised, “Don’t wait. Spend time now. Consider alternative products, alternative vendors. Look for those other things you can put on the shelves that aren’t going to have those tariffs, that are going to fall into the right price lines for

your customers.

“And don’t roll over for your vendors. They don’t make the rules. They act like they do just because they put the line item on the invoice. Negotiate or renegotiate it. Change vendors if necessary. Ask them to absorb the tariffs. If it wasn’t quoted on the order, push back. Ask them to split the cost with you. Ask them to allow more time to pay that portion of the cost. They don’t make the rules. Until you pay them, you hold the cards. You can send the product back, and you can get a different product.”

Most importantly, he said, “you know your customers best. You know what they won’t spend if you add to the price, and you know what they will spend. You know what they’re interested in.

“So protect your margins. If you’re paying that extra shipping, and you’re adding that tariff, you know they’re not going to pay that. Go find a different product. Find a different vendor. Do that work now, and put those things on your shelf. Maybe they will pay it.

“No matter how you slice it, folks, it is going to be a year to watch expenses, to stay liquid and pay attention,” Applegate said, “but it is going to be OK.”

And Poudel added that “my grandma used to tell me, everything is temporary. It will pass.”

This article was first published by BizWest, an independent news organization, and is published under a license agreement. © 2025 BizWest Media LLC.