The federal government is being forced to return more than $165 billion in collected
tariffs to domestic importers, and the online portal to request those refunds went live
this week. The U.S. Supreme Court struck down President Trump's tariffs, resulting in the
order to refund the import taxes. Wisconsin businesses are looking to get some relief,
including Verroqua-based Wonder State Coffee with its three locations across the state.
CEO T.J. Sumanche joins us now from Verroqua, and thanks a lot for being here.
It's good to be here. Thank you. So first question, how much did tariffs cost you?
Yeah, we paid almost $140,000 in tariffs last year. That's a big number for any business,
but in this tariff discussion, is coffee unusual because it's almost all imported?
Yeah, we've been saying this from the get-go that we really didn't understand the purpose or the
intent of taxing and terrapping a product that we can't even promote domestic production of.
All coffee is grown in the tropics. There's a tiny bit grown in Puerto Rico and Hawaii,
but not close to being able to meet the U.S. demand. So we were paying attacks that we didn't
understand what the impact was for. So describe from me where you source your coffee from. What
country? Yeah, we source a lot of coffee from Latin America, from places that people think about
when coffee like Colombia, but also Peru, Guatemala, Honduras, Mexico, and then also in Africa.
We bring in a lot of coffee from Ethiopia, which is the birthplace of coffee, and also
smaller countries like Rwanda and Burundi, Kenya. Did you ever reach out to your U.S. representatives
or others, trade officials about the fact that coffee is almost 100% imported?
I did, for sure. Yeah, I reached out to all of our elected officials, Derek Van Orden here in
our Congressional Third District. And I even went to D.C. last year and got a chance to speak to
some senators and share our frustration and trying to just lend our voice as a small business,
but also a small business that is importing what is an international product.
What have the cost of the tariffs meant for your business? Yeah, last year it was really
challenging. It was unexpected. In my 25 years into coffee, we've never even once considered a
tariff on our coffee that we import. So it was a curveball and already in a challenging business
climate where other costs are going up, like health care, shipping costs, things like that,
that this was just one more headache and again, not being expected at all. We had to deal with
these costs. One of the things that people don't quite realize is we had to pay for the tariff
before we even got the product in the country. So this is before we could even sell it. We had
to borrow money to pay the tariff. So we were then paying interest costs on the money we borrowed
for the tariffs. So all these things were compounding and just making it harder and harder for us.
Have you gone online to request a refund? And if so, how is that process going?
Yeah, we technically are not the importer of record. So we work with brokers who do a lot of
the logistics for us. So their names are the ones that are on record for being the importer.
So we're working with them and they, as one of their clients, and they are
they're applying for those refunds. And we haven't gotten any word of what the progress is or you
know, there's a lot of uncertainty on how this process is going to unfold.
To those tariffs as significant as they were for a small business get passed along then
to your customers? Yeah, in some way or fashion they did. We had again, last year was challenging
a lot of ways. Coffee itself, the cost, the commodity price of coffee skyrocketed last year.
So we were paying a tariff on what was already a historical cost for coffee. So all these things
were compounding and we did have a price increase last year that we passed on to our customers.
And and tariffs were a part of that. So the, you know, how much of that was the tariff?
It's a little confusing and, you know, just because there was a lot of factors.
Well, what has business planning been like over the course of these changeable tariffs?
I mean, the change that just the recent change in tariffs or just the changing back and forth.
The changing back and forth and through the course of it and the uncertainty and how to
how to plan for, you know, future business? Yeah, yeah. I mean, we had to reforcast our profit
and our budget last year. We even pulled back on some investments in growth. We decided not to
buy a piece of equipment last year just because of the business climate. This would have been
expanding our production capabilities. And we, you know, this was a piece of equipment that
the one that we're looking at was mostly built in Wisconsin. So we did not, you know, invest and
we did not make that purchase. So you could see even where the ripple effects might be. But we
did pull back on our kind of expectations for growth and profit and even hiring and being able
to invest in our staff. That, you know, coming into 2026 with the change in tariffs and it feels like,
you know, we are a little more optimistic kind of going, we're going back a whole year where we kind
of came into 2025. We're kind of coming back into 2026 with that perspective. But I would say that
it felt like a whole year of just kind of a holding pattern. How optimistic are you that you will
get the tariffs that you paid refunded? I'm a pretty optimistic person. So I put our chances
that better than 50%. But again, I'll believe it when the money is in our bank because again,
this has been such a uncertain process from the beginning. We're hoping that the administration
doesn't fight as the, you know, as this portal is open and money actually starts flowing that they
don't cut off those funds. But we don't, you know, we don't know. We're not counting on it until we
actually have the money in our bank. Which might be months or a year from now. We don't know.
Not banking now. All right. TJ, some action. Thanks very much.
All right. Thank you.
Thank you, sir. All right. You're welcome. Now back to coffee roasting and
tasting and veg and selling back to it. Yeah. Thank you so much. Yeah. You have a good day. Take care.