Local businesses, services begin to feel impacts of federal cuts, tariffs & tension with Canada
April 27, 2025 | By Sandy Yusen | Correspondent
U.S. Sen. Peter Welch, D-Vt.,(standing), speaks during a panel discussion at The Alchemist in Stowe with business owners including (from the left) Caleb Magoon, owner of Waterbury Sports & Power Play Sports, Eric Warnstedt of Heirloom Hospitality restaurant group, and Christa Bowdish, owner of the Stagecoach Inn. Photo by Gordon Miller
After facing a pandemic, flooding, and seasonal fluctuations over the last few years, Waterbury businesses and organizations are now navigating a new threat: federal funding cuts and tariffs.
From tourism to manufacturing to social services, the turbulence in the national economic landscape is creating ripple effects across every corner of our local economy.
On April 14, more than 60 leaders from local businesses and nonprofit organizations gathered at The Alchemist Brewery in Stowe with Sen. Peter Welch, D-Vt., to discuss the impact of the federal government’s trade war on the local economy.
Welch kicked off the event with a sharp criticism of the administration’s actions: “When the history of these tariffs are written, it’s going to go down as one of the biggest economic blunders in the last century in this country,” he said.
“At every single level, these tariffs make no economic sense, are going to cause enormous pain, and inject this profound unfairness and corruption into our economic system,” said Sen. Peter Welch, D-Vt. Photo by Gordon Miller
The event was part of a series of roundtable discussions Welch has been hosting across Vermont and even nearby in Canada. The panelists represented a cross-section of businesses in the outdoor and tourism economy, including Waterbury’s Old Stagecoach Inn, Waterbury Sports, and Heirloom Hospitality, parent company of local restaurants Hen of the Wood, Gallus, Prohibition Pig, and Doc Ponds.
Panelists shared frustrations with rising costs, operational and supply chain disruptions, and a fractured relationship with Canada. Burton Snowboards’ CEO John Lacy summed up the common sentiment: “How can you navigate a playbook when you don’t know what the rules on the board are?”
Since the new federal administration took office in January, the White House has rolled out a barrage of trade actions, including a 10% universal tax on all imports and a tariff on China of 145%. Other reciprocal tariffs on imports from a list of countries, albeit with some exemptions, have been paused for 90 days.
Welch said he was eager to collect stories of how federal actions are affecting Vermonters to share with his Congressional colleagues. The senator is also supporting bipartisan legislation pushing back against the tariffs.
Outdoor companies reel from economic uncertainty
Regional outdoor recreation and manufacturing companies are wrestling with unknowns while bracing for impact from the federal tariffs.
Caleb Magoon, owner of Waterbury Sports and Power Play Sports in Morrisville, shared on the panel that he works with more than 100 vendors, many from outside of the U.S. The threat of tariffs has already spurred some of his vendors to pause product shipments.
Magoon aims to keep prices affordable and competitive, but is monitoring the landscape closely. “We live and die by how much snow we get here and in the current state of climate change, that's a really uncomfortable place to be, so adding more cost and more uncertainty is not awesome,” he said.
Magoon, who grew up in Hyde Park and participated in local ski programs, added, “It makes me really sick to the stomach to know that some kids might not be getting into skiing and snowboarding because of the increasing cost.”
Waterbury Area Trail Alliance Trails Director Alex Showerman shared Magoon’s concerns about people being priced out of outdoor recreation. In looking to the future, Showerman fears a triple whammy for WATA – potential cuts to the federal funds the organization relies on for trail maintenance and expansion, reductions in Canadian tourism, and tariffs that will increase the cost of gear for outdoor enthusiasts.
Mark Yardley, senior VP of global sales at Darn Tough Vermont, comments on the challenges of adapting a global business to current economic uncertainties. Photo by Gordon Miller
Darn Tough Vermont opened a manufacturing facility in the former Green Mountain Coffee Roasters plant in Waterbury in 2021. The sock maker is also trying to adapt its global business to the current economic climate. Darn Tough sells its socks in 25 countries. Its wool is sourced both domestically and outside of the U.S., and the knitting machines the company uses come from Italy.
Mark Yardley, Darn Tough’s senior vice president of global sales, attended the panel discussion with Sen. Welch. He said the uncertainty around tariffs makes it difficult to predict the effect on pricing. There are also potential longer-term implications for the brand’s trajectory.
“We’ve built our brand on ‘Made in Vermont, Made in America,’” Yardley said. While there is an upside to manufacturing domestically, there is a new downside for U.S. businesses that sell globally. “Now we’re starting to see in our feeds, especially our social feeds, in Europe and the U.K.: ‘love your product, not going to buy it anymore.’”
Mavic, the France-based bicycle equipment company that established its North American base in Waterbury in 2023, says its reliance on Europe for 90% of its goods will allow the company to minimize price increases compared to others in its industry. “We'll stop the import of our goods that are coming out of China and Taiwan, which are in categories of minimal focus for the U.S. growth strategy, and double down on goods of European origin,” said Josh Saxe, sales and marketing manager.
Canadian boycott hits Vt. tourism and hospitality
Seated beside Caleb Magoon, owner of Waterbury Sports & Power Play Sports (left), Heirloom Hospitality restaurant group owner Eric Warnstedt says: “My bigger concerns are more broad, big-picture social concerns and bigger economic concerns—and how they’ll be making their way to Vermont.” Photo by Gordon Miller
President Trump’s plans for tariffs on goods from Canada and threats of annexation have angered Canadians, fracturing the relationship between the two countries and triggering Canadian boycotts of U.S. products and travel.
On Welch’s panel, restaurant owner Eric Warnstedt reported that he has already seen a drop-off from some loyal customers from north of the border. “We’ve had people that have been coming to us for almost 20 years [say]: ‘We love you, thank you, just so you know we’re not coming this summer.’ That hurts, that’s disappointing,” he said.
As a business owner with 180 employees, Warnstedt sais his approach is to “slow our roll.” He said, “For us, it's showing up, and putting our head down and focusing on our people and our community.” But he said he worries about the broader social and economic concerns of a constrained economy and how that might impact people coming to Vermont in the long-term, either to visit or to put down roots. “The best thing we can do right now is be patient and know that it's a moving target and we'll morph when we have to,” he said.
Old Stagecoach Inn owner Christa Bowdish also relies on Canadian visitors, who make up approximately 15% of the inn’s overnight guests. On the panel, she shared statistics showing a downward trend in reservations over the last months and a sharp reduction in Canadian traffic to her website, with Canadian web searches for her business down from 27% to just 1.6%.
Old Stagecoach Inn owner Christa Bowdish comments on the recent steep drop in business from Canadians. Burton Snowboards CEO John Lacy (center) and Sen. Peter Welch, D-Vt., listen. Photo by Gordon Miller
Bowdish said she worries about the longer-term impact on her business and for Waterbury from a damaged relationship with Canada. “While people aren’t visiting Vermont, they’ll be finding new places to visit, making new memories, building new family traditions, and we will not recapture all of that,” she said.
And Bowsish emphasized the importance of local residents supporting local businesses when tourism ebbs. “We need to the extent that they can for locals to get out and support local businesses because all the businesses are feeling the pinch, whether it's the yarn store or the beer store or the restaurants,” she said, adding a reminder that the inn serves breakfast on weekends and its pub is open nightly.
More than 60 leaders from local businesses and nonprofit organizations gathered at The Alchemist Brewery in Stowe with Sen. Peter Welch, D-Vt., to discuss the impact of the federal government’s dramatic shifts in trade policy on the local economy. Photo by Gordon Miller
Vermont Artisan navigates global supply chain complexities
For Vermont Artisan Coffee & Tea, the tariffs and economic volatility add new layers of uncertainty to an already complex coffee supply chain. Although company officials did not participate in the panel with Sen. Welch, they discussed the issue in interviews afterward.
Vermont Artisan Coffee & Tea will look to adjust its offerings to offset supply cost increases. File photo
Since it was established in 2001, the coffee roaster and tea company has grown into a sizable business, with 22 full- and part-time employees and a 15,000-square-foot facility in Waterbury Center that houses a cafe, roastery, coffee lab and training center.
With a few exceptions, coffee can only be grown outside the U.S. and Vermont Artisan sources its beans from more than 20 different countries and roasts 250,000-300,000 pounds of coffee per year.
Even before tariffs were proposed, green coffee prices were at near-record highs due to weather and currency fluctuations. Founder Mané Alves says Vermont Artisan is now paying three times more for coffee than last year. Tariffs only add to that burden. In addition to a 10% blanket rate, proposed tariffs include a 46% levy on Vietnam imports and 32% for Indonesia, two major coffee suppliers. “I'm not going to buy anything that is going to have a high tariff attached to it because I cannot pass it along,” Alves said.
Decaf coffee adds another layer of complexity. Alves notes that there are only two places that use the non-chemical decaffeination method the company prefers – and they are based in Mexico and Canada.
The National Coffee Association is lobbying for coffee to be exempted from tariffs, since it can’t be grown domestically. But for now, the trifecta of high costs, looming tariffs, and market uncertainty is daunting. “All of that has a huge impact on a company our size, said Vermont Artisan General Manager Renée Adams. “Our margins are already so tight, because we want to be able to keep supporting our community.”
Vermont Artisan had already raised prices 8-10% to offset green coffee costs, but the team worries about how much more customers can absorb. “I think coffee and specialty coffee would be one place that people might pull back on if they’re really faced with a tough decision,” said co-owner Holly Alves who oversees marketing. “It's an expensive everyday luxury.”
The team is exploring new opportunities for revenue. Their current facility, built in 2017 after the previous space flooded during Tropical Storm Irene, can provide some flexibility. Mané Alves said he is downsizing the coffee lab from 3,000 square feet to 250, in order to sublet the remaining space. Plans are also underway to offer tours, tastings, and public workshops on topics like barista training and latte art.
In the meantime, Adams says their Waterbury roots help sustain the business during challenging times. “We're not just a tourist destination – we're a local business that really appreciates the community support,” she said.
SunCommon’s Vermont operation is based in Waterbury along U.S. Route 2. File photo by Gordon Miller
SunCommon looks on the bright side
SunCommon is no stranger to volatility, having weathered many changes since its founding in 2012, including mergers, changing ownership, the bankruptcy of its previous parent company, and shifting regulations. Now under the parent company Clean Royalties, the company operates independently with 60 employees in Waterbury and an additional 20 in upstate New York.
According to Sales Director Mike McCarthy, the current economic turmoil creates both a threat and an opportunity for clean energy companies. “It's a double-edged sword,” McCarthy said. “The biggest impact that tariffs and the specter of tariffs is going to have on industries like ours isn't the direct price increase. The general problem that we'll have is if people aren't buying things because they're scared.”
On the flip side, he said, “The thing that we offer that helps us in these times of uncertainty is the peace of mind that people get around sustainability and resiliency.”
For example, the company offers customers the option to finance their solar tech purchases – a factor they hope will help buyers move ahead with their plans to invest in solar. “Not only is it a good economic investment, but in uncertain times, it gives people certainty that the power is not going to go out,” McCarthy observed. “There's nothing more fundamental than that, right?”
And although equipment costs are rising, McCarthy said that SunCommon has warehoused supplies to buffer customers in the near term from price increases. He emphasizes that with the labor, permitting, and engineering SunCommon provides, equipment is just one piece of the package. He also noted that many of SunCommon’s equipment suppliers now manufacture domestically as a result of the Inflation Reduction Act of 2022 which included major investments in clean energy technology and production.
“We talk in the solar industry about there being a solar coaster,” McCarthy said, referring to the company’s need to stay nimble and innovate. In addition to rooftop solar installations, the company now offers ground-mounted solar arrays, canopies, energy storage, EV chargers, and full-home electrification.
Despite the headwinds, McCarthy remains optimistic. “This is an amazing time to be in the energy business,” he said. “The reality is we have all the technology that we need to solve climate change.”
McCarthy said SunCommon will keep that big picture in mind and hopefully customers will, too. “So, that feeling of anxiety that people have about the current state of the economy and the world – we offer an antidote to that,” McCarthy said. “I'm hoping that we can offer people solutions that help redirect their fear and anxiety to doing something about it. I think that empowering people to take control over their energy and their lives in that way in their homes or their businesses – that's a powerful thing.”
Other business panelists on the right from Sen. Welch are Mimi Buttenheim, president of Mad River Distillers, J Skis founder Jason Levinthal, and Jen Kimmich, co-founder of The Alchemist Brewery. Photo by Gordon Miller
Federal cuts disrupt local services
In Waterbury, the pain points for the town’s operations and service organizations are less related to tariffs than to recent funding cuts at federal agencies by the Trump administration’s Department of Government Efficiency (referred to in short as “DOGE”).
Earlier this month, the administration cancelled the Building Resilient Infrastructure and Communities grant program, or BRIC, administered by the Federal Emergency Management Agency. The fund allocated $2.7 million annually to Vermont for disaster preparedness projects. According to Municipal Manager Tom Leitz, the grant application, totaling $166,500, would have updated a hydrology study allowing the town to test scenarios for flood prediction, response, and mitigation.
On the brighter side, some funding remains intact for the town and local service organizations. Leitz reports that he recently signed the grant agreement for the first $150,000 of FEMA reimbursement claims for the 2024 flooding, which indicates that funds have been sent from FEMA to Vermont Emergency Management en route to the town.
Waterbury Ambulance Service also has received its anticipated allocation of $700,000 in federal funding to complete construction on the ambulance station and headquarters on Demeritt Place off South Main Street. And funding for the Waterbury Area Senior Center Meals on Wheels program remains in place at least through the end of this fiscal year in September, according to board Treasurer Maureen White.
Waterbury Public Library Director Rachel Muse reports that the library has received its expected $1,000 in direct grant funds. She adds, however, that when it comes to funding for the statewide library system, “Things are very uncertain and confused.”
That’s because the Institute of Museum and Library Services (IMLS), the federal agency that supports public libraries and museums across the country, was targeted by DOGE reductions. In March, nearly all employees were put on administrative leave, and grants to state libraries totalling $1.2 million for fiscal year 2025 were paused. Muse says that IMLS funds about a third of the budget for the Vermont Department of Libraries, which covers shared resources such as digital resources and databases, interlibrary loans, staff training and support, and materials for the blind and visually impaired.
“Every single library in Vermont is going to be impacted by these cuts,” Muse said. “Of course, there are still some big question marks and we’re all waiting to learn more.” According to a newsletter from State Librarian and Commissioner of Libraries Catherine Delneo, the federal administration has not provided any update on the grant program, although it has been nearly one month since the executive order was signed.
The dismantling of the IMLS also hit the Waterbury Historical Society. In early April, a $140,000 IMLS grant to the Vermont Historical Society was cancelled. This would have forced the organization to terminate a program to help local historical societies organize and modernize their catalog collections and make them accessible to the public. The Waterbury Historical Society was in the first cohort for the state program, which was slated to run through 2027.
In a positive twist, less than a week after the grant’s termination, multiple donors stepped up to support the Vermont Historical Society and fund the program through October for the first cohort of local historical societies.
Waterbury Historical Society President Cheryl Casey expressed her gratitude: “Vermonters have a long history of showing up for each other and this instance is another piece to add to that story.”