without that. >> All right. Well, Steve
Vavrus, thanks very much and thanks for your work.
>> Thank you. >> 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 Viroqua based Wonderstate
Coffee, with its three locations across the state.
CEO T.J. Semanchin joins us now from Viroqua. 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 that's a that's a big number for any business.
But but in this tariff discussion is coffee
unusual because it's almost all imported.
>> Yeah. We have been saying this from the get go
that we really didn't understand the purpose or
the intent of taxing and tariffing a product that we
can't even, you know, 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, you know, paying a tax that we didn't even
understand what the the impact was, was for.
>> So describe for 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.
>> What of the cost of the tariffs meant for your
business? >> Yeah, last year was
really challenging. It was unexpected. You know, my 25
years in coffee, we've never even once considered
a tariff on our coffee that we import. So it was a
curve ball. 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, 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,
we had to pay for the tariff before we even got
the product in the country. So, you know, this is
before we could even sell it, we had to borrow money
to pay pay the tariff. So we were then paying
interest costs on, on the, 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, 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 in 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
historical costs for 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
tariffs were a part of that. So the you know how much of
that was the tariffs gets a little confusing. And you
know just because there was a lot of factors.
>> What has business planning been like over the
course of these changeable tariffs.
>> We had to reforecast 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 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 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, 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 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 at 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 starts flowing, that they don't cut off those
funds. But we don't, you know, we don't know. We're
not we're not counting on it until we actually have
the money in our bank, which might be months,
months or a year from now. months or a year from now.