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without that.
>> All right. Well, Steve

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Vavrus, thanks very much
and thanks for your work.

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>> Thank you.
>> The federal government

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is being forced to return
more than $165 billion in

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collected tariffs to
domestic importers and the

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online portal to request
those refunds went live

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this week. The U.S. Supreme
Court struck down President

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Trump's tariffs, resulting
in the order to refund the

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import taxes. Wisconsin
businesses are looking to

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get some relief, including
Viroqua based Wonderstate

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Coffee, with its three
locations across the state.

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CEO T.J. Semanchin joins us
now from Viroqua. And

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thanks a lot for being here.
>> It's good to be here.

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Thank you.
>> So first question, how

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much did tariffs cost you?
>> Yeah, we paid almost

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$140,000 in tariffs last
year.

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>> That's that's a that's a
big number for any business.

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But but in this tariff
discussion is coffee

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unusual because it's almost
all imported.

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>> Yeah. We have been
saying this from the get go

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that we really didn't
understand the purpose or

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the intent of taxing and
tariffing a product that we

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can't even, you know,
promote. Domestic

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production of all coffee is
grown in the tropics.

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There's a tiny bit grown in
Puerto Rico and Hawaii, but

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not close to being able to
meet the U.S. demand. So we

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were, you know, paying a
tax that we didn't even

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understand what the the
impact was, was for.

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>> So describe for me where
you source your coffee from.

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What country?
>> Yeah, we source a lot of

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coffee from Latin America,
from places that people

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think about when coffee
like Colombia, but also

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Peru, Guatemala, Honduras,
Mexico, and then also in

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Africa. We bring in a lot
of coffee from Ethiopia,

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which is the birthplace of
coffee, and also smaller

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countries like Rwanda and
Burundi, Kenya.

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>> What of the cost of the
tariffs meant for your

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business?
>> Yeah, last year was

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really challenging. It was
unexpected. You know, my 25

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years in coffee, we've
never even once considered

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a tariff on our coffee that
we import. So it was a

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curve ball. And already in
a challenging business

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climate where other costs
are going up, like health

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care, shipping costs,
things like that, that this

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was just one more headache.
And, and again, not being

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expected at all. We had to
deal with these costs. One

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of the things that people
don't quite realize is we,

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we had to pay for the
tariff before we even got

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the product in the country.
So, you know, this is

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before we could even sell
it, we had to borrow money

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to pay pay the tariff. So
we were then paying

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00:03:03,116 --> 00:03:05,919
interest costs on, on the,
the money we borrowed for

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00:03:05,986 --> 00:03:08,388
the tariffs. So all these
things were compounding and

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just making it harder and
harder for us.

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>> Have you gone online to
request a refund and if so,

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how is that process going?
>> Yeah, we technically are

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not the importer of record,
so we work with brokers who

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do a lot of the logistics
for us. So their names are

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the ones that are on record
for being the importer. So

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00:03:28,242 --> 00:03:32,312
we're working with them and
they as, as one of their

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clients and they are,
they're applying for those

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refunds. And we haven't
gotten any word of what the

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progress is or, you know,
there's a lot of

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uncertainty on how this
process is going to unfold.

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>> To those tariffs, as
significant as they were

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for a small business get
passed along then to your

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customers.
>> Yeah. In some way or

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fashion they did. We had
again, last year was

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challenging in a lot of
ways. Coffee itself, the

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00:04:01,375 --> 00:04:04,878
cost, the commodity price
of coffee skyrocketed last

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00:04:04,945 --> 00:04:09,616
year. So we were paying a
tariff on what was already

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00:04:10,717 --> 00:04:13,820
historical costs for for
coffee. So all these things

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00:04:13,887 --> 00:04:17,157
were compounding. And we
did have a price increase

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00:04:17,224 --> 00:04:21,128
last year that we passed on
to our customers. And

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00:04:21,195 --> 00:04:25,098
tariffs were a part of that.
So the you know how much of

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that was the tariffs gets a
little confusing. And you

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00:04:27,734 --> 00:04:30,337
know just because there was
a lot of factors.

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>> What has business
planning been like over the

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course of these changeable
tariffs.

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00:04:35,576 --> 00:04:39,746
>> We had to reforecast our
profit and our budget last

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00:04:39,813 --> 00:04:44,351
year. We even pulled back
on some investments in

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00:04:44,418 --> 00:04:48,522
growth. We decided not to
buy a piece of equipment

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00:04:48,589 --> 00:04:50,657
last year just because of
the the business climate.

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This would have been
expanding our production

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00:04:55,729 --> 00:04:58,899
capabilities. And we, you
know, this was a piece of

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equipment that the one that
we're looking at was mostly

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00:05:01,668 --> 00:05:05,105
built in Wisconsin. So we
we did not, you know,

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00:05:05,172 --> 00:05:07,574
invest. And we did not make
that purchase. So you could

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00:05:07,641 --> 00:05:10,310
see even where the ripple
effects might be. But we

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00:05:10,377 --> 00:05:14,848
did pull back on, on our
kind of expectations for

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00:05:15,449 --> 00:05:19,419
growth and profit and even
hiring and being able to

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00:05:19,486 --> 00:05:24,124
invest in our staff that,
you know, coming into 2026

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00:05:24,191 --> 00:05:27,027
with the change in tariffs.
And it feels like, you know,

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00:05:27,094 --> 00:05:30,464
we we are a little more
optimistic kind of going,

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00:05:30,531 --> 00:05:33,400
we're going back a whole
year where we kind of came

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00:05:33,467 --> 00:05:36,770
into 2025. We're kind of
coming back into 2026 with

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00:05:36,837 --> 00:05:39,506
that perspective. But I
would say that it felt like

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00:05:39,573 --> 00:05:42,009
a whole year of just kind
of a holding pattern.

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00:05:42,075 --> 00:05:44,945
>> How optimistic are you
that you will get the

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00:05:45,012 --> 00:05:48,015
tariffs that you paid
refunded?

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00:05:50,050 --> 00:05:52,586
>> I'm a pretty optimistic
person, so I put our

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00:05:52,653 --> 00:05:56,390
chances at better than 50%.
But again, I'll believe it

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00:05:56,456 --> 00:05:59,493
when the money is in our
bank. Because again, this

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00:05:59,560 --> 00:06:03,530
has been such a uncertain
process from the beginning.

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00:06:03,597 --> 00:06:06,200
We're hoping that the
administration doesn't

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00:06:06,266 --> 00:06:10,070
fight as the, you know, as
this portal is open and

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00:06:10,137 --> 00:06:13,340
money starts flowing, that
they don't cut off those

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00:06:13,407 --> 00:06:16,476
funds. But we don't, you
know, we don't know. We're

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00:06:16,543 --> 00:06:19,179
not we're not counting on
it until we actually have

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00:06:19,246 --> 00:06:21,448
the money in our bank,
which might be months,

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00:06:21,515 --> 00:06:26,186
months or a year from now.
months or a year from now.