For nearly 90 years, getting a tool at a reasonable price
was a given at the Raleigh-based hardware store Burke Brothers.

“We’re part of the community,” Jeff Hastings, owner of Burke
Brothers said. “We have to look the customers in the eye when they come in.
They know who we are.”

But trade talks and tariffs are trickling into their
hardware store.

“Some of our major tool companies that do stuff offshore
have announced increases of 5% to 7%,” Hastings said.

This comes on the heels of a better-than-expected jobs report
and positive consumer sentiments about the economy. The U.S. added 147,000 jobs
in June, with the jobless rate dropping to 4.1%. On the consumer side,
sentiments are up too. But how long that will last is uncertain. While consumer
sentiments are up, consumer confidence is down.

“We’re more likely to see those two measures moving in the
same direction,” said Sarah Dickerson, research economist for the Kenan Institute. “It’s always a little bit of an interesting story when we see them moving
in opposite directions.”

Dickerson says tariff talks are progressing with trade partners
like China and the United Kingdom, giving some optimism to consumers.

“I suspect that’s something that’s encouraging to consumers,
especially when you think about just how many of our products in this country
are imported from China,” Dickerson said. “It’s still not the rosiest of
circumstances when we talk about tariffs.”

Consider the big dogs. Dickerson says Amazon sources 70% of its products from China. Walmart, about 60% . She says, those
companies have said they’re doing their best to relieve customers from bearing
the burden, but a cost-to-click increase isn’t off the table.

According to a Federal Reserve Bank of New York Consumer
Expectation Survey, 75% of the firms responding say those costs are
being passed onto consumers.

“I think a lot of businesses, big and smaller, are in a difficult
position right now when it comes to tariffs,” Dickerson said.

Each time the bell on the door at Burke Brothers rings,
Hastings is there to meet the customer with a smile and an eagerness to help
them navigate the maze of tools and supplies.  The seemingly infinite number of tiny drawers
holding tens of thousands of screws appear cheap.

One reads 25 cents, another is 31 cents. A quick scan doesn’t
see a single screw over two quarters.

However, that’s not where customers will gripe, Hastings says.

“It may not matter on 49 cents,” he said. “They’re not going
to argue if it’s .49 or .53. But when I go from $27.99 to $29 or crossing the
$30 boundary [for a box], that’s when it starts becoming more impactful on
their business.”

It’s a decision he takes seriously. The local corner
hardware store is as quintessential as apple pie on the 4th of July.
It’s a place people go to know they’re not getting gouged.

It’s why Hastings is getting creative with his business
model. He’s looking at what he can buy domestically, like certain hobby knives
out of Tennessee. They can purchase those for the next six to 12 months until
things settle down.

And don’t let the weather fool you. Christmas is around the
corner, at least from a business perspective. Hastings says lights, stands,
ornaments and the rest of the items that pop up around the holly jolly season
often come from China. Right now, it’s facing a roughly 30 percent tariff.

Those costs may lighten the load on stockings come December.

“We’re just trying to make sure that we have something that’s
affordable,” Hastings said.

But he remains optimistic that things can stay level.

“We know the consumer that’s buying it is probably pinching
pennies and they’re worried about the cost of living, the cost of food on their
end, just like we are,” Hastings said. “So we’re trying to cut back some things
on our end, just like I know that the consumers are doing on theirs.”