LEXINGTON, KY. (LEX 18) — President Donald Trump is threatening to impose a 25% tariff on countries that do business with Iran, a move that could significantly impact Kentucky businesses already struggling with existing trade restrictions.
Trump announced the proposed tariff on social media, calling it "effective immediately," though no official executive order has yet been issued.
The potential policy would particularly affect goods coming from China, Iran's biggest trade partner, leading to increased costs for Kentucky retailers and consumers.
Jeremy Rice, owner of House by JSD, a home goods store, had hoped to leave tariff discussions behind in 2025.
"How much more do we have to bear this, right?" Rice said.
Rice's business is already feeling the strain from existing tariffs implemented last year. A topiary that would have cost around $100 in 2024 now runs customers about $160.
"It is our vendors and us to end up paying for it, and then the consumer ends up paying for it, versus someone outside of the country," Rice said.
If the new tariff moves forward, Rice estimates his store will face an additional $120,000 in markup costs.
"The biggest challenge of all this is the uncertainty," Rice said.
Dr. Omar Ayyash from the World Trade Center Kentucky, who helps companies navigate trade advisory issues, warns the policy could have widespread consequences despite its intended target.
"Kentucky thrives when trade rules are clear, predictable, and stable. The policy might be aimed at Tehran, but its real impact will be felt on factory floors and loading docks across Kentucky," Ayyash said.
Kentucky's economy is particularly vulnerable to trade disruptions, given its heavy reliance on international trade.
"In terms of GDP, we rank second in the nation as it relates to international trade. So, at the end of the day, we're gonna have definitely an impact, whether you're a small, medium, or large company," Ayyash said.
For businesses like Rice's, the uncertainty creates additional challenges in planning and pricing.
"How do we make this work for customers?" Rice said.
