WEBVTT 00:00.000 --> 00:26.320 The federal government is being forced to return more than $165 billion in collected 00:26.320 --> 00:32.960 tariffs to domestic importers, and the online portal to request those refunds went live 00:32.960 --> 00:38.720 this week. The U.S. Supreme Court struck down President Trump's tariffs, resulting in the 00:38.720 --> 00:45.280 order to refund the import taxes. Wisconsin businesses are looking to get some relief, 00:45.280 --> 00:51.760 including Verroqua-based Wonder State Coffee with its three locations across the state. 00:51.760 --> 00:56.160 CEO T.J. Sumanche joins us now from Verroqua, and thanks a lot for being here. 00:57.280 --> 01:02.080 It's good to be here. Thank you. So first question, how much did tariffs cost you? 01:03.680 --> 01:14.320 Yeah, we paid almost $140,000 in tariffs last year. That's a big number for any business, 01:15.280 --> 01:21.760 but in this tariff discussion, is coffee unusual because it's almost all imported? 01:23.040 --> 01:27.920 Yeah, we've been saying this from the get-go that we really didn't understand the purpose or the 01:27.920 --> 01:36.320 intent of taxing and terrapping a product that we can't even promote domestic production of. 01:37.040 --> 01:42.240 All coffee is grown in the tropics. There's a tiny bit grown in Puerto Rico and Hawaii, 01:42.240 --> 01:49.520 but not close to being able to meet the U.S. demand. So we were paying attacks that we didn't 01:49.520 --> 01:58.000 understand what the impact was for. So describe from me where you source your coffee from. What 01:58.000 --> 02:04.800 country? Yeah, we source a lot of coffee from Latin America, from places that people think about 02:04.800 --> 02:12.240 when coffee like Colombia, but also Peru, Guatemala, Honduras, Mexico, and then also in Africa. 02:13.120 --> 02:18.080 We bring in a lot of coffee from Ethiopia, which is the birthplace of coffee, and also 02:18.080 --> 02:27.680 smaller countries like Rwanda and Burundi, Kenya. Did you ever reach out to your U.S. representatives 02:27.680 --> 02:38.000 or others, trade officials about the fact that coffee is almost 100% imported? 02:39.440 --> 02:46.720 I did, for sure. Yeah, I reached out to all of our elected officials, Derek Van Orden here in 02:47.360 --> 02:54.560 our Congressional Third District. And I even went to D.C. last year and got a chance to speak to 02:54.560 --> 03:03.760 some senators and share our frustration and trying to just lend our voice as a small business, 03:03.760 --> 03:08.800 but also a small business that is importing what is an international product. 03:09.600 --> 03:15.520 What have the cost of the tariffs meant for your business? Yeah, last year it was really 03:15.520 --> 03:25.040 challenging. It was unexpected. In my 25 years into coffee, we've never even once considered a 03:25.040 --> 03:34.320 tariff on our coffee that we import. So it was a curveball and already in a challenging business 03:34.320 --> 03:40.080 climate where other costs are going up, like health care, shipping costs, things like that, 03:40.080 --> 03:48.240 that this was just one more headache and again, not being expected at all. We had to deal with 03:48.240 --> 03:54.160 these costs. One of the things that people don't quite realize is we had to pay for the tariff 03:54.160 --> 03:59.120 before we even got the product in the country. So this is before we could even sell it. We had 03:59.120 --> 04:06.640 to borrow money to pay the tariff. So we were then paying interest costs on the money we borrowed 04:06.640 --> 04:10.880 for the tariffs. So all these things were compounding and just making it harder and harder for us. 04:10.880 --> 04:15.840 Have you gone online to request a refund? And if so, how is that process going? 04:17.280 --> 04:22.880 Yeah, we technically are not the importer of record. So we work with brokers who do a lot of 04:22.880 --> 04:28.720 the logistics for us. So their names are the ones that are on record for being the importer. 04:28.720 --> 04:34.160 So we're working with them and they, as one of their clients, and they are 04:35.280 --> 04:41.360 they're applying for those refunds. And we haven't gotten any word of what the progress is or you 04:41.360 --> 04:45.120 know, there's a lot of uncertainty on how this process is going to unfold. 04:46.000 --> 04:51.920 To those tariffs as significant as they were for a small business get passed along then 04:51.920 --> 04:58.640 to your customers? Yeah, in some way or fashion they did. We had again, last year was challenging 04:58.640 --> 05:05.680 a lot of ways. Coffee itself, the cost, the commodity price of coffee skyrocketed last year. 05:06.240 --> 05:14.640 So we were paying a tariff on what was already a historical cost for coffee. So all these things 05:14.640 --> 05:20.400 were compounding and we did have a price increase last year that we passed on to our customers. 05:21.040 --> 05:26.640 And and tariffs were a part of that. So the, you know, how much of that was the tariff? 05:26.640 --> 05:30.240 It's a little confusing and, you know, just because there was a lot of factors. 05:30.880 --> 05:35.440 Well, what has business planning been like over the course of these changeable tariffs? 05:38.400 --> 05:44.080 I mean, the change that just the recent change in tariffs or just the changing back and forth. 05:44.080 --> 05:49.280 The changing back and forth and through the course of it and the uncertainty and how to 05:49.280 --> 05:56.000 how to plan for, you know, future business? Yeah, yeah. I mean, we had to reforcast our profit 05:56.000 --> 06:04.720 and our budget last year. We even pulled back on some investments in growth. We decided not to 06:04.720 --> 06:09.600 buy a piece of equipment last year just because of the business climate. This would have been 06:11.360 --> 06:17.920 expanding our production capabilities. And we, you know, this was a piece of equipment that 06:17.920 --> 06:23.600 the one that we're looking at was mostly built in Wisconsin. So we did not, you know, invest and 06:23.600 --> 06:28.160 we did not make that purchase. So you could see even where the ripple effects might be. But we 06:28.160 --> 06:37.040 did pull back on our kind of expectations for growth and profit and even hiring and being able 06:37.040 --> 06:44.880 to invest in our staff. That, you know, coming into 2026 with the change in tariffs and it feels like, 06:44.880 --> 06:50.720 you know, we are a little more optimistic kind of going, we're going back a whole year where we kind 06:50.800 --> 06:56.560 of came into 2025. We're kind of coming back into 2026 with that perspective. But I would say that 06:56.560 --> 07:02.320 it felt like a whole year of just kind of a holding pattern. How optimistic are you that you will 07:02.320 --> 07:10.960 get the tariffs that you paid refunded? I'm a pretty optimistic person. So I put our chances 07:10.960 --> 07:17.440 that better than 50%. But again, I'll believe it when the money is in our bank because again, 07:17.520 --> 07:23.680 this has been such a uncertain process from the beginning. We're hoping that the administration 07:23.680 --> 07:30.160 doesn't fight as the, you know, as this portal is open and money actually starts flowing that they 07:30.160 --> 07:36.240 don't cut off those funds. But we don't, you know, we don't know. We're not counting on it until we 07:36.240 --> 07:40.320 actually have the money in our bank. Which might be months or a year from now. We don't know. 07:40.320 --> 07:43.440 Not banking now. All right. TJ, some action. Thanks very much. 07:44.640 --> 07:45.360 All right. Thank you. 07:49.040 --> 07:54.000 Thank you, sir. All right. You're welcome. Now back to coffee roasting and 07:55.040 --> 08:01.680 tasting and veg and selling back to it. Yeah. Thank you so much. Yeah. You have a good day. Take care.