There’s a quote often credited to Russian revolutionary Vladimir Lenin (although there is no evidence that Lenin ever spoke or wrote these words):
“There are decades where nothing happens; and there are weeks when decades happen.”
The month of January felt like some of those weeks. Long periods of slow change are often punctuated by sudden, intense periods of rapid transformation, leading to significant shifts in society, economics, politics, and technology. Despite possibly not having been written by Lenin at all, it nonetheless expresses a sentiment that resonates today It highlights how history’s biggest events, like revolutions or major breakthroughs, can unfold in incredibly short time frames after long buildups of tension or development.
Geopolitical conflict will continue to loom amid negotiations over Greenland, U.S.-backed leadership in Venezuela, the ongoing war between Russia and Ukraine, Israel and Gaza, as well as persistent tensions between the U.S. and Iran as well as with our friends in Canada. Not to mention the rest of the world that is looking at other markets to deal with to avoid participating in the tariff war. We also must watch rising social unrest domestically (in part in response to Immigration and Customs Enforcement activity). AI is changing the world as well on many things including the job market as well as the energy sector.
In recent weeks, Trump has threatened tariffs against Canada, South Korea and eight European countries, invoking the tool as means of exerting pressure over a range of foreign-policy issues. Solid economic growth looks like it will continue for 2026. This growth may be tempered possibly by a weaker employment market
Short Term Predictions
2025 was marked by escalating tariffs in the United States. Duties on Ecuadorian flowers rose to 21.8%. The sector is awaiting a statement from the U.S. government and is moving forward with efforts to exclude this product from the surcharge. As of October, the United States remained the leading buyer of Ecuadorian flowers.
Ecuador is currently negotiating the elimination of that 15% surcharge as part of a group that includes Argentina, El Salvador, and Guatemala. If successful, the country would return to paying only the 6.8% tariff. This would improve Ecuador’s relative position compared to Colombia, whose tariff would not benefit from such an exemption.
Gustavo Petro is the current president of Colombia and is the country’s first left-wing leader. As of February 2026, he is engaged in high-level diplomatic meetings, including a recent, surprisingly cordial, and constructive meeting with U.S. President Donald Trump at the White House regarding regional issues. Perhaps the relationship between the two countries will improve.
Not surprisingly, Washington politics will also be a major factor in the economic outlook. Mid-term elections are coming soon and hopefully some of the current politicians are replaced and the uncertainty of what is happening can be corrected and we can continue a more even course with less disruption.
The stock market could be affected by a series of unknowns, including the potential for another government shutdown and the upcoming mid-term elections. There will certainly be some impact on Fed policy with the appointment of a new Fed chairperson, with Chairman Powell’s term up in May. Tariffs remain a major concern as the U.S. Supreme Court is expected to announce its decision on a court case challenging the legality of recent tariffs, and as Trump threatens additional tariffs, most recently on European countries related to administration’s interest in Greenland. The Supreme court has met at least three times to determine if these Tariffs are legal but have not made a decision. Maybe it has to do with who appointed the majority of Supreme Court Judges. Floradamus hopes the tariffs will be removed on all flowers and avoid the possibility of shrinking the Floral Industry which is already challenged by pricing increases.
It will certainly be tough with the new minimum wages for the Colombian flower growers. Since Covid, high inflation, exchange rates, and tariffs prices have continued to rise. We have seen a thinning out of the number of wholesalers, growers, and even retailers through mergers and acquisitions. It is possible more mergers and acquisitions will accelerate as a way to cut costs.
It could be that as many as 30 percent of Colombian farms find themselves in financial trouble by May or June do the wage increases, tariffs, and exchange rates We have seen many retailers close in the last few years and it looks like that trend will continue. As less retailers exist it also decreases the need for as many wholesalers. Larger more successful retailers continue to grow and many buy farm direct and reinforce the need for less wholesalers. It appears that there are specialty flower growers popping up in all 50 states from very small to very large. These operations sell to retailers, event florists, wholesalers, and mass markets. Many of these farms also sell to the public, do weddings and events, and some are even event venues. These operations are further eroding imports. The big problem for the specialty growers is that most have poor logistics other than locally and have not solved the last mile solution.
More from SAF:
According to a recent SAF report they stated a few interesting statistics. For 2025, net profits for retailers had 27% reporting an increase, 34% maintaining previous levels, and 31% experiencing a decline. This means that 65% either lost money or were flat compared to the previous year. These are not great results for any industry.
Most floral businesses finished 2025 with “good” or “okay” sales but high costs, political tension and a weekend Valentine’s Day have curbed the outlook for 2026, according to respondents of a recent survey by the Society of American Florists.
SAF’s Economic Outlook survey, conducted last month, gathered insights from 166 retailers, growers, wholesalers, importers and suppliers about their financial performance in 2025 and expectations for 2026.
Overall, business sentiment is cautiously optimistic. The survey found that 45.6% of respondents described business as “good,” and 35.9% said business was just “okay.” Respondents cited tariffs, inflation and customers’ financial strain as their top challenges in 2025 and continued concerns for 2026.
Where are we headed?
Good question. Floradamus feels like everyone else in the Floral industry that we are facing lots of challenges. The Floral industry as overcome many challenges in the past and will continue to do so. The pricing for certain flowers is creating roadblocks and reducing some consumption. Growers must be more creative to figure out ways to reduce freight, increase labor efficiency, and grow more productively without sacrificing quality. The wholesale and retail industry can not continue with prices that remain high. More sales will shift to either other more competitive outlets or people will buy less flowers from traditional sources. Other than Taylor Swift and people with her economic means will use less wedding flowers if prices don’t correct themselves. In a nutshell it is basically harder and more complicated to do business. Keep Calm and continue to be resilient.
See you in the future,
Floradamus
For more on tariffs, the economy, logistics, inflation, and more, see The Wizard’s Wand News!
To say a lot has been happening in the last couple of months would be an understatement. Recently we have had lots of serious and interesting events. Venezuela, Greenland, Minnesota, unrest in Iran, minimum wages in Colombia, ups and downs in the stock market and bitcoin, currency exchange rates and many more.
Colombia News
As we have all heard by now the minimum wage in Colombia increased by over 23%. Prices of flowers will be adjusted by most farms. Also, there has been a decrease in the exchange rate which decreases revenue. Today’s exchange is approximately where it was at in 2021.
Colombia supplies 60-70% of the flowers imported to the US. In a recent letter written by Augusto Solano Mejía and shared by ASOCOLFLORES with industry partners, context was provided around Colombia’s newly announced 23.7% minimum wage increase, effective January 1, 2026. This was the largest labor cost increase in Colombian recent history.
Labor accounts for 40-60% of the total production cost depending on the product and intensity of labor to produce it. This will certainly have an impact on pricing especially when you couple it with tariffs and exchange rates. Most pricing increases will take place right after Valentines Day.
The dollar is giving the Colombian peso over 17% less pesos from a little less than a year ago. This is another big challenge for Colombian growers.
Weather has been wreaking havoc in the states in mid-January to early February. Bad weather in Europe also affected flower prices in early to mid-January.
Cold weather has threatened flower and greens crops in the United State and forced farms to use freeze protection.
Florida plays a critical role in the U.S. floral supply chain, serving as a primary source of greenery for designers across the country. Right now, that supply is under strain as a prolonged freeze moves across the state, bringing consecutive nights of sub-freezing temperatures during the year’s most important harvesting window.
According to the Floral Greens Farmers of Florida, Growers report more nights in the low 20s and below freezing than they have experienced since 1989. The timing could not be more challenging, as the freeze is unfolding during the peak Valentine’s Day harvest season. This could cause issues well beyond the Valentines holiday.
Winter weather has disrupted transportation in the U.S. All modes of transportation have been affected
Airlines canceled thousands of flights in January for a large winter storm which covered from Maine to Texas in snow and ice. The storm was January 23-25,2026 and resulted in all kinds of logistic disruptions in close to 40 states.
Winter Storm Fern has disrupted logistics across the US, affecting 40 states with heavy snow, ice and extreme cold. The American Logistics Aid Network reports significant disruptions, including flight and rail cancellations, power outages and suspended trucking operations. Spot rates for dry van and refrigerated freight are expected to rise, similar to trends seen after previous major winter storms
Commercial traffic across the Great Lakes is also being disrupted due to icy conditions, exacerbated by insufficient Coast Guard resources to break up the ice.
The bomb cyclone came next. It impacted the Carolinas and the Mid Atlantic and caused disruption on the I95 corridor. This cold isn’t going anywhere, and another blast is forecast for early February. February 8th hit record low temperatures in much of the Northeast. It has been at least 10 years since we have had a winter as bad as this.
Economic News
US GDP grew at an annual rate of 4.4% in Q3 of 2025, its fastest pace since 2023, driven by strong consumer spending and business investment in artificial intelligence, according to the Commerce Department. While consumer spending rose 3.5%, business investment excluding home-building increased 3.2%. The job market, however, remains weak, with only 28,000 jobs added monthly since March, compared with 400,000 during the post-pandemic hiring boom.
Sales rose across the board in December as consumers didn’t let economic uncertainty and other concerns get in the way of holiday spending.
Core retail sales (excluding restaurants, auto dealers and gas stations) rose 1.6% month over month in December and increased 3.58% year over year, according to the CNBC/NRF Retail Monitor released by the National Retail Federation. Core holiday retail sales (Nov. 1 through Dec. 31) grew 4.1%, based on Retail Monitor data.
According to a recent Bloomberg article, shopper attitudes remain below where they registered a year ago, data showed. Consumer sentiment ticked higher in February for the second consecutive month as inflation fears appeared to ease, though shopper attitudes remained well below levels registered a year ago according to the data from University of Michigan.
At its low point in November, consumer sentiment fell close to its worst level since pandemic-era inflation. Modest gains in recent months indicate some positive momentum for shoppers.
Year-ahead inflation expectations dropped from 4% in January to 3.5% in February, the data showed. The outcome anticipated by respondents would put inflation above its current level of 2.7%.
The labor market has slowed in recent months, while inflation has hovered above the Federal Reserve’s target rate of 2%.
Despite these challenges, some major economic indicators remain upbeat.
In the fall, shoppers helped achieve the fastest quarterly U.S. economic growth in two years, federal government data in December showed.
Meanwhile, a relatively small fraction of American adults are unemployed and looking for work. The unemployment rate dropped to 4.4% in December from 4.6% in November, the U.S. Bureau of Labor Statistics said, putting unemployment at a low level by historical standards.
Domestic Farmers
Domestic growers must battle higher wages that put more pressure on selling prices. According to the American Farm Bureau Federation State wage shifts raise labor costs for U.S. agriculture. National data show that average farm wages exceed minimum requirements. According to Occupational Employment and Wage Statistics, crop farm workers average US $18.20 per hour, and livestock workers average US $18.55 per hour, both higher than the highest state minimum wage.
US agriculture continues to face cost pressure linked to trade policy and labor availability. Tariffs introduced under President Donald Trump have increased farm input costs by more than US$33 billion in 2025, according to a December report from North Dakota State University’s Agricultural Trade Monitor. This estimate does not include lost export sales following retaliatory tariffs on US crops.
To offset higher production costs, the administration announced a US$12 billion aid package described as a bridge payment. The support is expected to begin in late February 2026 and will be capped at about US$155,000 per business, with a focus on smaller family farms.
Tariffs
Global merchandise trade growth slowed in the last quarter of 2025 as the earlier surge from pre-tariff order front-loading diminished, according to the World Trade Organization.
Import volumes at major US container ports have continued to decline, with October 2025 recording a 7.9% year-over-year drop, and November and December suggest even steeper decreases, according to the Global Port Tracker from NRF and Hackett Associates. For the full year, NRF anticipates a 1.4% decline in total container volume compared to 2024. Import demand is expected to remain weak into 2026 because of tariffs and policy uncertainty.
Amid ongoing tariff uncertainty, conducting regular and thorough impact assessments has become essential for businesses. These assessments help organizations understand their exposure to current and potential tariffs. Rather than being a one-time exercise, impact assessments should be updated routinely, particularly following new or revised tariff announcements.
It appears that a significant portion of the tariffs have been absorbed by businesses and their supply chains, rather than fully being passed on to consumers. There is always a possibility that this could change, and more could be passed on to the consumer.
The effects of tariffs are major concerns for retailers, who are seeking stability in trade policy to maintain smooth supply chain operations. Tariffs are forcing companies to reevaluate their costs, risks, and liquidity.
Overall tariffs have reduced import volumes and raised consumer’s costs. According to CNBC that in 2025 each household’s expenses increased by $1000 and this is expected to increase to $1300 in 2026.
Labor Market
Job openings in December 2025 fell sharply to 6.5 million, the lowest number recorded since 2020, according to the latest Job Openings and Labor Turnover Survey. Layoffs rose slightly, from 1.7 million to 1.8 million, while quit rates remained stable at 2%. The decline in openings highlights a cooling in labor demand as the job market continues to soften into 2026.
The US economy added 64,000 jobs in November as the unemployment rate crept up to 4.6%, according to Labor Department data. The unemployment rate hit Its highest level since 2021.
US job growth slowed in December according to the Bureau of Labor Statistics, with non-farm payrolls increasing by 50,000, compared with a revised 56,000 in November, while the unemployment rate decreased to 4.4%. The slowdown is attributed in part to import tariffs and rising investment in AI that may be offsetting hiring.
More jobs were added in January than expected. Non-farm payrolls gained 130,000 jobs in January, according to the Bureau of Labor Statistics, exceeding expectations. The unemployment rate edged lower, declining to 4.3%.
Major US companies are making significant job cuts, citing over hiring during the pandemic as the primary reason. The trend is most pronounced in the tech and logistics sectors, which saw the most hiring during the pandemic. Although the job market remains relatively healthy, hiring has slowed, and those laid off are finding it harder to secure new positions.
The Fed
Prіϲеs are still climbing faster than paychecks. Even as the Fed signals a pause, some everyday Americans keep paying double-digit interest.
A divided Fed held rates despite lots of political pressure. The Federal Reserve held its target federal funds interest rate in the 3.50%-3.75% range at the January meeting, matching investor expectations. Most Fed voting members supported the decision, while two dissented and preferred a 0.25% rate cut. The Fed kept policy unchanged to balance still-elevated inflation, a soft but stable labor market and the cumulative effects of rate reductions delivered across the prior three meetings. Chairman Powell summarized the backdrop by noting, “The risks to both (inflation and labor markets) are a little less (than they were).” The decision was made with dissenting votes from two governors who favored a rate cut. The Fed’s stance follows repeated political pressure. The central bank’s next move will depend on developments in the job market and inflation.
Logistics
Military forces will assist one of the largest container shipping alliances in its return to a violence-plagued Middle East trade route.
A.P. Moller-Maersk and Hapag-Lloyd said that they are routing one of their shared services through the Red Sea and the Suez Canal. All transits will be secured by naval assistance, the companies said in an announcement.
The service connecting India and the Middle East with the Mediterranean will Begin in mid-February. This key Mideast route that could mean lower rates for shippers from Asia to the United States Major container lines and tanker operators diverted traffic away from the region in early 2024 after Houthi rebels in Yemen attacked Israel-linked merchant ships in solidarity with Palestinians. The United States and European Union in 2024 and 2025 bombed Houthi positions and provided escorts for commercial vessels. But the region has proved too unstable and carriers continue to divert ships on the Asia-U.S. route on longer voyages around the tip of Africa.
Ocean container freight rates on the eastbound trans-Pacific have given up gains won in 2026 as muted demand marks a lull that could last until the peak shipping season according to Freightos. “And while ocean rates typically ease as the holiday approaches, they normally remain elevated relative to levels before the rush until after the post-holiday backlog is cleared,” said Freightos.
The Freightos Baltic Index shows Asia-U.S. West Coast prices tumbled 21% to $1,916 per forty-foot equivalent unit (FEU) in the latest week. Asia-U.S. East Coast rates fell by 10% to $3,457 per FEU.
The National Retail Federation U.S. ocean import report projects March volumes will dip 5% month-on-month. First-quarter demand is projected to trail year-ago levels by 7% year as retailers exercise caution and totals are compared to volumes front-loaded in Q1 last year.
UPS began a phased draw-down of the aging tri-engine aircraft but said on that it has accelerated the retirement plan and will replace the aircraft with more efficient twin-engine Boeing 767-300 cargo jets.
The MD-11s have been parked since Nov. 8, when the Federal Aviation Administration ordered UPS, FedEx and Western Global Airlines to ground their MD-11 fleets until inspections and any potential corrective steps can be completed after the fiery crash of UPS MD-11 in Louisville, Kentucky, that killed 15 people. Investigators are focusing on why the engine and engine pylon, which was discovered to have structural fatigue cracks, separated from the left wing as the plane moved down the runway.
UPS has decided to permanently retire its fleet of 27 MD-11 aircraft and take a $137 million after-tax write off instead of returning the wide-body freighters to service even if they are cleared to fly again by aviation authorities following the crash of one of its planes in early November.
UPS said it would eliminate an additional 30,000 frontline jobs and at least 24 facilities as part of a multiyear strategy to recharge growth through a planned decoupling from Amazon, lower-yielding Chinese e-commerce volumes and downsizing of its parcel delivery network to match lower volume flow.
In general, the U.S. trucking industry continues to face a tough economic reality: spot rates have failed to keep pace with inflation, squeezing carrier margins and contributing to significant financial pressure on truckers nationwide.
The Flower Business
The End of the Affordable Care Act Subsidies Poses New Challenge for Florists and Other Small Businesses. For florists, especially small studios, expiring credits have direct consequences for business planning, staffing, and personal finances.
While red roses will always be a Valentine’s staple, customers are increasingly drawn to refined, elevated interpretations rather than oversized or overly embellished designs. Clean lines, intentional color palettes, and premium blooms are replacing novelty-driven arrangements.
We have noticed traditional retail florists ordering varieties and species that have higher perceived value. Peonies, ranunculus, garden roses, anemones and other high-end products are being asked for more for this Valentines Day than usual. Roses still dominate but other products are making inroads.
Conclusion
Trade policies are among the top supply chain challenges for 2026. According to Sedgwick’s 2026 Forecasting Report Two-thirds of executives report that US trade policies have had a negative impact on their business, while only 3% claim they have had a positive effect. Other risks include AI advancement, labor shortages and the extreme weather we have been seeing this winter.
There has been a lot going on this year. The Wizard feels like we are on a News overload. AI spending is high and still increasing, we survived a very short government shut down that was settled the first week of February. Are we facing another shutdown soon? The Venezuelan president was captured by the US military, Trump spoke of seizing Greenland, and the Epstein files were released. Powell has a criminal investigation being conducted by the Justice department. We have had two Americans shot in Minneapolis by ICE. Our federal government lead by Donald Trump want to change the current election process and protocol. Chinese President XI fired a senior military general.
The external environment is changing, and the old rules of thumb may be losing relevance. The U.S. economy is becoming increasingly K-shaped. Higher-income households continue to see rising wages, wealth gains, and stronger spending power—while lower-income households face slowing wage growth, rising delinquencies, and weakening confidence. How does this relate to flower purchases. Can the flower business afford to lose a good percentage of their consumers.
Looking Ahead to Valentine’s Day Florists have low expectations for Valentine’s Day 2026, with 44% predicting decreased sales. Consequently, 42% are pre-booking a lower percentage of product than last year. We will see very soon how accurate these predictions are!
The world has changed more than anyone could have expected. First the tariffs increased a lot of the prices on imported flowers and hard goods from many nations. Then we had the exchange rate dilemma causing countries to try and make up the difference of the currency by raising prices. Now Colombia has a very large increase in labor that puts them more on level field with Ecuador. It is going to be an interesting season. We continue to hope that the Trump administration will reduce or eradicate tariffs on Flowers and help the industry. We do not want to see any sector of the Floral Industry become upside down financially. Small business confidence is decreasing and wage inflation continues to increase. The Flower industry has been resilient over time and hopefully these conditions will be overcome and adapted to as everyone must become more efficient!
Breaking news as this is being written
Once again, we have a government shutdown! This one is being called a partial or limited shutdown and the third shutdown under Trump’s second term in only a little over one year. Negotiations between the White House and Democrats in Congress failed to agree on new restrictions for federal immigration agents. The shutdown will last at least 10 days as congress is on a 10-day break.
However, Republican leaders in Congress have said that negotiations would continue, and that members should be ready to return to Washington subject to an agreement.
The shutdown affects about 13% of the federal civilian workforce and is confined to agencies under the umbrella of the Department of Homeland Security (DHS), including the Transportation Security Administration (TSA), which screens airline passengers.
Air traffic controllers employed by the Federal Aviation Administration will receive paychecks as usual, reducing the risk of widespread flight cancellations. In October and November 2025, a different set of issues caused a broader shutdown of the federal government for a record 43 days.
Stay Tuned!
Thanks for reading my rants,
The Flower Wizard
To contact David Kaplan (also known as the “Flower Wizard” or “Floradamus”) at Above All Flowers Email: aboveallflowers@mac.com Call 401-486-0525
Are you wondering if you should really trust this Floradamus man?
Let’s take a look at the first article that Floradamus published in October 2010 on Flowers & Cents, and see what’s happened since then.
Changes and Challenges for the Flower Business for 2011
THEN: As most of the Flowers & Cents contributors and readers can tell, the flower industry is currently in a great deal of flux, turmoil, and some scandal for lots of reasons.
NOW: Mostly true but with less scandal.
THEN: For the first time a major recession has had a great impact on what used to be viewed as a recession proof business.
NOW: No recession, and hopefully one does not come!
THEN:World economic conditions now impact North America more than ever.
NOW: Even more true today!
THEN: Some of these reasons go back to the problems of the USA Floral and Dole purchases and eventual sales. (All at discount prices) Not to mention outside capital propping up the industry such as AIG.
NOW: We are definitely in an age of mergers and acquisitions at the retail, wholesaler, importer, and grower level.
THEN:In many cases we have been left with a fragmented and challenged industry that does not always work logically in the economic sense.
Exchange rates, which used to be a profit center for farms have now forced many growers to reconsider why they are even in the flower business.
NOW: Exchange rates continue to rattle growers especially from Colombia where rates have dropped to the 3700 and change rates per dollar in November of 2025 from the 4500 rate in April of 2025.
THEN:Bankruptcy is pushing many farms out. Some of the surviving farms are cutting corners that result in less than stellar quality. Weather issues have also been a major factor in resulting in lower productivity in Central and South America not to mention the massive storms the United States had during Valentines.
Breeders are avoiding markets that are becoming more and more financially challenged. Many breeders cannot collect royalties due to the large amount of farms that are under financial protection. Only a small percentage of Colombian growers are planting new varieties and maintaining their farms in a manner that will produce high quality product. These are the growers you must support in order to see the business stay viable. The old constant over supply may become a thing of the past.
THEN: Airlines are challenged as well. Volumes and schedules have been off as they find other commodities in other locations are willing to pay more per kilo than flowers.
NOW: Freight rates have recently increased to the states from South America and for many airlines other markets have recently become more appealing.
THEN: We all agree (as many posters comment) how essential the cold chain is.
THEN AND NOW: So what does the future need for future success at all levels?
THEN: We have to analyze the current distribution network and make it more efficient. In this last recession all kinds of businesses restructured the way they operate. This is often painful in the short term, but if we do not fix the inefficiencies the flower business will shrink to a model that only appeals to a small percentage of the population.
NOW: We continue to improve this but lots of work still needs to be done!
THEN:The Flower Industry was “fat” at all ends for many years in the last century. Growers made money – even with latent over production. Distributors and wholesalers made money – even with costly physical structures, extremely high overhead, and inefficient models.
NOW: It’s very hard to make this happen today with inflation and the labor market.
THEN: What do we have to do to restore the Gleam back to Flower Industry? NOW: Great question!
1) Become more efficient at all levels NOW: Still very true
2) Shorten the “distance between producers and end users” NOW:This is happening more and more. Increase education to buyers with hands-on interactionNOW: This needs to happen more.
3) Everyone has to realize that in the long-term it is better to give producers a fair return that allows the farm a chance at survival and provides its owners with an investment that makes sense and is practical. NOW: This still needs to happen to keep a level playing field.
4) Revisit how flowers are sold throughout the chain and fix inefficiencies, reduce overhead, allow the industry to grow,NOW: Again, this must happen continuously.
5) Reduce the high cost of distribution with better logistics, technology, and packaging-old fashioned distribution at the grower and some wholesale levels has to be reinvented.NOW: Continue to become a more sustainable industry.
6) Retailers as well as mass markets need to be more committed to handling quality product and varieties. This will keep their customers coming regularly rather than being disappointed on occasional events.NOW: This is happening as the variety of novelties and high quality flowers continues to increase.
THEN:It is not just the grower or the buyer that has led the market to evolve to today’s state.
All sides have been guilty to some degree. We have to have an industry that allows all sides to win.
NOW: A win-win has to be the way, including for the consumer.
THEN: Retailers are squeezed more and more everyday.
NOW: This continues, just check how many retailers have closed in the last 15 years.
THEN: The percentages they pay order gathers and “wire services” keep increasing. This results in the consumer being provided with less value because the retailer cannot make money without skimping. So less repeat business and a declining market for everybody in the chain.
Everyone can see the numbers of how many fewer retailers there are now as compared to 10 years ago. Many retailers also have issues that are unrelated to the flower business as well. The current residential and commercial real estate market makes it extremely challenging for retailers to downsize their physical location if they own their building because they cannot afford to take the hit. Declining business has resulted in many retailers being in a building too large for their needs. Some foreclosures have resulted from this economic dilemma.
Many wholesalers have structures that only work when they pay low prices and are able to make large margins. Many distributors have large overheads and have to pass these costs on. The current situation is starting to unravel as we read on Flowers & Cents about all the changes and some scandals. Some wholesalers are closing or selling because they are finding it difficult to make money and collect money.
NOW: Today with ACH and credit cards collection should be a non-starter and collecting money should not be an issue.
THEN: Some distributors are downsizing and moving into more economical warehouses in order to be able to survive.
NOW: Another reason why we are seeing wholesalers buying a location in a city they may have a location already.
THEN: Growers are able to get better prices by shipping to other world markets (some times much higher).
NOW: This continues today sometimes due to exchange rates, freight rates and market conditions.
THEN: Some of these markets pay almost immediately while others have very little credit risks. North American markets have to become more appealing or we will become a secondary market in the supply chain.
NOW:With Russia and Ukraine, North America became more attractive but as Europe and Asia’s economy strengthened we are seeing more competition.
THEN:As some of the posters have pointed out recently that most farms cannot live on the large low-end mass market and big box pricing models. In some cases this downward squeezing has driven out some supply and distributors.
NOW: With costs increasing, mass market pricing has risen but is still much cheaper than traditional retail. Often florists are using some mass markets to buy certain colors and items instead of purchasing from their usual wholesaler.
THEN:High quality mass markets with good customers counts are providing farms with good returns and volumes. Innovative products in all forms have attracted a large segment of the buying public to these stores.
NOW: For example, no one would believe the amount of items like dahlias, garden roses, and peonies being sold at the mass market level now.
THEN:I will leave the subject of e-commerce for another editorial.
NOW: E-commerce has grown immensely in the last 15 years.
THEN:To summarize:
This industry has to get more and more efficient.
NOW: Yup, this is happening through technology and will continue more with the evolution of AI.
THEN: General Motors knew what it was doing wrong for many years. It took a crisis for them to eliminate brands and downsize. They knew if they did not change they would disappear. Fix the flower model or it will become a bigger problem in the future!
NOW: A lot still holds true for that statement.
NOW: I leave everyone with one thought. Will history repeat itself like it did very early in the 2000’s and the large consolidations fall apart like Dole and USA Flora or will they be incredibly successful and continue to grow?
Finally, the 43-day government shutdown is over! Trump signs bill to end the longest government shutdown on record
The bill, which funds the government through January, was passed by the House in a 222-209 vote and by the Senate with support from seven Democrats and one independent. The bill includes provisions for a bipartisan budget process, funding for the SNAP program and ensures federal workers will be paid for the shutdown period. The shutdown has delayed government economic data and has disrupted many agencies.
Consumer confidence is weakening on economic, and labor market concerns
Bloomberg reported that US consumer confidence fell for the third consecutive month in October, reaching its lowest level since April. The drop is attributed to concerns about the economy and labor market, with more consumers expecting fewer job opportunities in the next six months. US small-business optimism declined in October, with the National Federation of Independent Business index falling to 98.2 from 98.8 in September, driven by weaker earnings, labor shortages and concerns about the government shutdown and tariffs. Despite the index remaining above its long-term average, uncertainty remains high.
Retail sales rise ahead of holidays in October
Retail sales rebounded in October, climbing 0.6% over the previous month and 5% compared to the same month last year, according to the NRF/CNBC Retail Monitor. The growth follows a dip in September and signals strong consumer activity heading into the holiday season. Total retail sales for the first ten months of 2025 are up 5.11% year-over-year.
Corporate profits continue to rise amid weak job market
According to CBS News, US corporate profits are soaring to new heights, and the stock market is near record highs, but despite this financial success, companies across various industries are aggressively cutting jobs, a trend not typically seen during periods of strong profitability. Analysts point to the rapid adoption of AI, which is increasing business productivity and reducing the need for labor, as a key factor behind this unusual divergence between profits and employment.
US job losses increase in October
The US economy experienced job losses in October, particularly in the government and retail sectors, amid cost-cutting measures and increased use of AI, according to private reports. Revelio Labs reports a loss of 9,100 jobs, including a decline of 22,200 government positions. Challenger, Gray & Christmas reports a 183% increase in planned layoffs, with technology companies leading the way, while the Chicago Federal Reserve estimates that the unemployment rate rose to 4.36%.
Consumers remain resilient but much of the numbers are coming from affluent households.
Early third-quarter earnings reports from major companies highlight ongoing consumer resilience, though the strength appears to be driven primarily by affluent households.
To quote a recent Reuters article there is a widening economic divide is impacting US businesses. Companies that serve lower-income consumers are facing declining sales and profits, while affluent households continue to sustain overall spending. Lower-income consumers are delaying purchases, seeking discounts and struggling with affordability as inflation remains elevated. Some companies are adapting products for both ends of the market, while firms reliant solely on budget customers are experiencing financial strain and workforce reductions.
Aggressive immigration tactics impact US labor market
The White House’s immigration crackdown is affecting the US labor market, with aggressive deportations, stricter enforcement — and most recently a major fee hike on H-1B visas — driving out low-wage and skilled immigrant workers. Employers across sectors report acute labor shortages as the loss of immigrant labor makes it increasingly difficult for industries such as agriculture, construction and health care to fill essential roles, leading to a nationwide slowdown in hiring and job growth. We have heard of large amounts of labor not showing up for work in the Northwest to harvest Christmas greens due to not wanting to deal with Ice.
The Federal Reserve
On Wednesday October 29th the Fed approved the second interest cut of the year largely due to the faltering labor market. The Fed has a growing concern over labor market softness, and this now outweighs inflation risks.
Fed officials seem divided on December rate cut outlook
According to Yahoo Finance “three Federal Reserve policymakers – Austan Goolsbee, Mary Daly, and Lisa Cook – have expressed uncertainty over whether the Fed will cut rates again in December. Goolsbee said he’s more concerned about inflation, which remains above the 2% target, and noted limited data due to the government shutdown. Daly said she’ll “keep an open mind,” balancing inflation and job risks, while Cook emphasized her concern for employment but stressed that policy isn’t on a predetermined path and each meeting remains live.” Federal Chair Jerome Powell openly acknowledged “strongly differing views” among committee members, reflecting uncertainties over whether to prioritize signs of labor-market weakness or continued economic growth, especially heading into December. He cautioned that further cuts are not assured, noting that the lack of economic data due to the government shutdown could necessitate a more cautious approach.
Tariffs
Supreme Court appears skeptical of Trump’s tariff powers
Although no decisions have been made by The Supreme Court they have expressed doubt about President Donald Trump’s use of the International Emergency Economic Powers Act to impose tariffs without explicit congressional approval. CNBC reported Justices questioned whether the law grants such broad authority, with Justice Neil Gorsuch highlighting potential misuse by future presidents. The court’s decision could affect previously paid duties and future tariff policies.
Importers feel Supreme Court-ordered tariff refunds would be simple
A CNBC report said US importers feel refunding tariffs paid would be straightforward if the Supreme Court orders repayment, saying detailed customs paperwork tracks all tariffs paid. The Supreme Court has expressed skepticism about the legality of some of the Trump administration’s tariffs but raised concerns about the complexity of repayment. Treasury Secretary Scott Bessent says repayments could total as much as $1 trillion.
Tariffs have continued to drive up prices
Tariffs imposed in 2025 have led to an overall 4.9 percentage point increase in retail prices, according to a Tax Foundation report. Imported goods have seen prices climb by six percentage points, while domestic goods rose by 4.3 points, with both figures based on new Harvard research. The Tax Foundation explains that domestic producers often raise their prices in response to higher import costs, staying just below the latest import price to remain competitive and increase profits.
Tariffs could cost firms $1.2T, hit consumers harder
S&P Global estimates that global businesses will face $1.2 trillion in costs from President Donald Trump’s tariffs this year, with two-thirds of the costs falling on consumers. Based on information from 15,000 analysts, the analysis suggests that only a third of the costs will be borne by companies. The tariffs, including a 10% levy on all US imports, have prompted companies to diversify supply chains and onshore production.
Tariffs have created a global shift as companies seek new markets on both the import and export side
Bloomberg has reported the highest US tariffs in nearly 100 years are significantly altering trade flows, leading countries and businesses to seek alternatives to the US market. Countries are redrawing trade routes and forming new alliances, such as Canada increasing car imports from Mexico and China sourcing soybeans from South America (although after Trump’s meeting with China the US Farmers should regain their soybean exports.) US trade barriers are also causing some companies to stop importing goods into the US due to rising costs, prompting them to look for overseas customers instead.
Inflation
Inflation has risen modestly to around 3%. Importantly, the increase appears driven more by service-sector costs—such as housing, software increases, and financial services rather than by tariff-related goods inflation. For the time being, businesses have absorbed much of the cost pressure, though whether this is sustainable remains to be seen.
Personal income is growing at a 5.1% annual rate, and real disposable income remains positive despite inflationary pressures. Real hourly earnings are up 0.7%, and real disposable income is up 1.9%. Consumer balance sheets are strong, supported by two consecutive years of 20%+ equity market gains and housing prices up over 50% since 2019.
Personal consumption expenditures are growing at a 5.5% annual rate. Retail sales are up 5.0% year-over-year, reflecting continued consumer demand and a healthy appetite for goods and services.
Logistics
Freight shipments fell sharply in October, but higher rates kept total freight revenue about the same according to Cass Information Systems.
As we know UPS had a fatal crash of an MD-11. UPS and FedEX have grounded their MD-11 widebody cargo jets following the deadly crash of the plane as it took off from the UPS global hub in Louisville, Kentucky. UPS expects the flight grounding on the MD-11’s to be temporary. Boeing recommended the suspension of flights while they exercise an abundance of caution and work with the FAA and the NTSB investigates the accident.
A slump in ocean shipping demand since U.S. President Donald Trump imposed a raft of new tariffs on trade partners earlier this year has helped send ocean container rates to their lowest since January 2024, threatening profits at major carriers including Maersk and Hapag-Lloyd (from Reuters). The Drewry World Container Index (WCI), which tracks the spot market rate to transport a 40-foot cargo container on major shipping lanes, dropped to a 20 month low of $1669 per 40 foot container.
Conclusion
Looking ahead to 2026, the broad direction for interest rates is down as long as inflation continues to cool and the labor market does not weaken sharply.
If inflation cools and growth continues, we hope to see a doveish Fed
High income consumers continue to drive demand. The top 20% of all households account for about two thirds of the spending.
The cost of goods, labor, services, insurance, and logistics are still increasing. It is more important than ever to become even more efficient.
Ice is continuing to scare current labor sources. The government wants to charge crazy amounts for special work visas.
The Supreme court has not yet decided on the legality of tariffs. Hopefully this comes soon and is favorable. In our additional stories section, we have a few articles about tariff concessions. (Although nothing has broken loose on flowers, we hope it happens soon. Trump’s administration is negotiating with Ecuador and Guatemala to roll back Tariffs on flowers. Hopefully we will see some results like we have seen on food items and other items not produced in the States. Several floral agencies and organizations like SAF, AFIA, IFPA, and others are lobbying the government to stop charging tariffs on flowers.
Exchange rates: 1 USD =3,803 Colombian Pesos (as of Nov 23rd) down almost 12% since April 2025 resulting in less pesos for every dollar. The exchange rate for the Euro to the peso is currently 1 Euro=4,362. This explains why many Colombian growers are looking to expand their market in Europe. The exchange rates are not helping flower prices.
Trump has repeatedly stated he would not rule out attacking Colombia drug operations.
The Trump administration recently stated that they were going to go after the countries that support drug trafficking against the United States. We have a large military presence off the coast of South America.
Currency exchange rates are still causing higher flower prices.
The third quarter of 2025 closed with a surprising degree of economic resilience. Despite the implementation of historically high tariffs, the U.S. economy has continued to grow at a healthy pace. Financial markets have responded favorably, driven by strong corporate earnings, enthusiasm around artificial intelligence (AI), and a renewed easing stance from the Federal Reserve.
Personal income is growing at a 5.1% annual rate, and real disposable income remains positive despite inflationary pressures. Real hourly earnings are up 0.7%, and real disposable income is up 1.9%. Consumer balance sheets are strong, supported by two consecutive years of 20%+ equity market gains and housing prices up over 50% since 2019.
Personal consumption expenditures are growing at a 5.5% annual rate, with real growth at 2.7%. Retail sales are up 5.0% year-over-year, reflecting sustained consumer demand and a healthy appetite for goods and services.
As 2025 draws to a close, the U.S. economy continues to defy early-year concerns, demonstrating resilience in the face of elevated tariffs, policy uncertainty, and a moderating growth environment. Key pillars such as consumer strength, AI investment, and monetary support have helped sustain expansion.
AI spending is accelerating at an unprecedented pace—raising the question: Are we witnessing a bubble or the foundation of a long-term transformation? (However, the most recent market drop has not helped the AI market)
Between November 13-November 18th the stock market has been down. The Dow lost over 2200 point on those 4 days. Most markets were at their all time high three weeks ago. Is it time to sell or buy the dip?
Let’s hope for a Santa Claus Rally. When people feel they have more money they spend more on flowers!
All these economic factors and conditions influence some part of the Flower industry to some degree. We are all in this together.
Thanks for reading my rants,
The Flower Wizard
To contact David Kaplan (also known as the “Flower Wizard” or “Floradamus”) at Above All Flowers Email: aboveallflowers@mac.com Call 401-486-0525
Fifteen long years ago, I, the flower wizard, David Kaplan, wrote an article under the name Floradamus. With all the crazy things going on, I felt it was time to bring him back! There is a lot to think about.
Who is Floradamus? He’s like Nostradamus, he makes prophecies. Some of them may turn out correct and some are completely wrong (Flora Dumb Ass).
Who was Nostradamus? Nostradamus was an oracle. An oracle is a person considered to provide insight, wise counsel, or prophetic prediction of the future.
Floradamus is a “Floracle,” if you will. Hopefully Floradamus’ predictions will prove to be more impactful than Nostradamus himself.
Why now?
The world has changed a lot since I published my last few articles: politically, economically, socially, and in many other ways. The flower industry faces many challenges as well as many opportunities in the future.
Mergers and acquisitions will become even more prevalent in the future in all sectors. Farms, importers, retailers, logistics companies, and wholesalers will continue to be sold to other operations as for many economies of scale make great sense. The daily question will be… who did so-and-so buy today? Other entities might just disappear. With costs rising, it is not as easy to run smaller operations as they do not provide a large enough return on investments and the margins are compressed.
Private equity is becoming more involved in the flower business. We will see who will be successful when it becomes time to cash out and flip some of these operations.
Insurance of all kinds is running higher along with other necessary costs. It is not easy for chain wholesalers with locations that do smaller volumes ownership to make money. This will result in creating some underserved markets where to be profitable, margins are increased causing retailers to bypass local sources and go to national distributors or direct to farms.
We will continue to see more closings and sales of retail florists. From 1992 to 2025, we have seen the number of florists drop from 27,000 to 12,000. Since retailer florists make up most of the customers for wholesalers, we can easily see why there is a drop in the number of wholesalers as well as more mergers and acquisitions. When a large retail customer of a regional wholesaler is sold to another large retail customer with different buying habits, it is not unusual for a local wholesaler to feel the pain.
The percentage of flowers being sold through mass market and e-commerce will continue to grow. Demand for flowers will stay strong in most sectors… maybe a little too strong around the holidays and a little too weak in slow periods. National marketing campaigns will keep trying to increase demand.
With the recent tariffs and increasing inflationary pricing, there will be more pressure for retailers and event planners to find alternative sources and go around wholesalers.
So far for 2025, we have seen more importation of flowers from South America as well as more specialty flowers being produced domestically. Open-field flower acreage in the U.S. Has more than doubled between 2017 and 2022 thanks in part to local farms growing flowers that don’t ship well like zinnias and dahlias as well as flowers that do ship well like peonies. Air shipments of imports to Miami are up about 10% this year and ocean shipping is up about 2% year to date. Based on what I see, mass market and e- commerce demand is where the increases are.
Many of the Covid buying trends have changed. This explains why a few of the mass market suppliers are purchasing more growing operations. This is especially true since the increase particularly on roses is mostly from Colombia where price points are generally more competitive and tend to go more to mass markets than Ecuador where freight and tariffs are higher. It will be interesting to see how the end of year numbers end up after the impact of the recent tariffs.
From AFIA:
“The Trump Administration issued an update on the reciprocal tariffs in September 2025. In the update there were two attachments Annex 11 and Annex 111.
Annex 111 is a list of products that can be considered for lower or no tariffs in the future if the countries work with the Administration on trade relations with the US. This list is items that are not produced in the US or are not sufficient for the requirements. Cut flowers are on the list, so we are hoping that the Administration works with Colombia, Ecuador, Costa Rica, Guatemala, etc. That we can get flowers exempt from tariffs.”
Exchange rates will be influencing the flower industry even on domestically produced products. Since April 2025, the Colombian Peso is approximately 3881 down from 4423 in April of 2025 or approximately 12%. The Euro is currently 1.17 up from 1.02 in February 2025 or approximately up 14+%. Unfortunately, flower producers and importers have no control over exchange rates and tariffs.
Growers that concentrate on the United States are very worried and have been seeking other markets especially in Europe and Asia. This is especially true for Colombians and Ecuadoreans. Obviously, the war between Russia and Ukraine has already created issues for many flower producing countries.
In the future, there could be more worldwide shortages of flowers if more growers continue to stop or reduce flower production as costs increase due to inflation of material costs, transportation and labor. Not to mention exchange rates are absorbing some of the costs of the tariffs and other political regulations.
Crop shortages could result from the fact that most of the supply of potassium (50%) comes from countries that are war torn or sanctioned. Fertilizer for crops is a necessity. A country like Brazil imports 98% of its potash supply making them vulnerable to supply and costs.
Consumer tastes will be changing and they will be leaning toward the purchasing of different varieties of flowers with better value to them. With more breeders developing new and interesting varieties, I predict there will be a superclass of high-end exclusive products that will demand higher prices and demand if these products are grown in moderation and it will be akin to how many Ferraris or Bugatti’s should be built.
Floradumus sees a lot of changes coming at warp speeds. AI, robots, flower vending machines, and other forms of new technology will change the face of our industry. Better transportation and cooling methods will advance. New areas to grow flowers around the world will be developed for many reasons as well as new products to keep the consumers’ appetite for the latest and greatest trends and varieties (After all, the iPhone 17 just came out!).
See you in the future,
Floradamus
For more on the economy, logistics, inflation, and more see the Wizard’s Wand News!
There has been a lot of news reporting about the Federal Reserve and interest rates. Finally on September 17, 2025, the Federal Reserve lowered its benchmark rate by a quarter percentage point to a range of 4% to 4.25% and signaled two more rate cuts may be coming by year’s end based on economic reports.
The Congressional Budget Office has revised its economic outlook, predicting slower growth, higher inflation and increased unemployment this year. The budget office expects the economy to expand 1.4% in 2025, down from 1.9%, with inflation rising to 3.1%. Unemployment is projected to peak at 4.5% by year’s end.
The unemployment rate increased to 4.3% in August (the highest in nearly 4 years). Economists attribute the slowdown to trade policies and immigration crackdowns and policies. The FED saw certain signals of slowing economic activity that outweighed the tariff-driven inflation that kept rates on hold.
The Fed has seen that hiring by small businesses is no longer driving US job growth resulting in an economic slowdown/downturn. Unfilled job openings in small companies are the lowest since 2020. The seasonal retail hiring is looking like it will be the lowest since the 2009 recession, according to CNBC. There won’t be as much hiring, but there won’t be as much firing, either.
According to information from the University of Michigan: “US consumer sentiment declined in September for the second consecutive month with the University of Michigan’s index dropping to 55.4, the lowest since May and a 21% drop from a year ago. Americans are increasingly worried about job security and inflation, with 65% expecting higher unemployment in the next year. This decline in sentiment follows recent economic data showing a net loss of jobs in June and a revision indicating 911,000 fewer employed people than previously reported.”
The U.S. national debt has grown at an unprecedented rate over the last 15 years, with government deficit spending currently projected to surpass government revenue growth and economic growth into the future.
This trend can produce potential problems for both long-term U.S. economic prospects and the global financial markets. Obviously not a great place to be.
TARIFFS
It is hard to write this without bringing up tariffs so here we go with a tariff section.
Businesses are struggling to set prices amid US tariffs which have led to uncertainty about costs and consumer acceptance. With pre-tariff inventories dwindling, companies are mulling price hikes, but inflation weary consumers and stiff competition make it difficult to determine how much of the added costs can be passed on. “Everyone is struggling to figure out what to do, what’s the right decision, where do we set prices,” said Clifford Thompson, president of Thompson Traders.
Small businesses, including those in the floral industry, have faced challenges adapting to increased tariffs that have raised operational and production costs. Almost half of small and midsize US companies have seen costs rise more than 20% since widespread tariffs were imposed, according to a survey by cargo booking platform Freightos. According to Freightos, about the same proportion of respondents say they have reduced shipment volumes because of the higher costs. Unlike larger corporations, these firms lack the resources to absorb sudden changes in tariffs and rising costs leaving them more vulnerable to the financial impacts of ongoing trade tensions.
TARIFFS AND LOGISTICS
“We have seen the implementation of reciprocal tariffs across the globe, with several key trading partners being subjected to tariffs higher than the earlier 10% tariffs,” National Retail Federation Vice President for Supply Chain and Customs Policy Jonathan Gold said, in a release. “We also continue to see more sectoral tariffs impacting a wider scope of products. Retailers have stocked up as much as they can ahead of tariff increases, but the uncertainty of U.S. trade policy is making it impossible to make the long-term plans that are critical to future business success.”
US retailers have been moving holiday imports at least a month earlier than usual aiming to mitigate the risks and costs associated with shifting tariff policies. The traditional seasonal surge in shipments ahead of Christmas has been front loaded with most end of the year goods already moving through the supply chain.
August was the Port of Long Beach’s second busiest August and sixth busiest month in its over 100-year history. This was due to importers trying to beat the implementation of higher tariffs.
Major U.S. container ports handled 2.36 million twenty-foot equivalent units (TEUs) in July, according to the National Retail Federation’s Global Port Tracker. That was a gain of 20.1% from June as retailers brought in merchandise ahead of tariffs set to take effect in August. It was also 1.8% higher year-over-year and the second-busiest month since 2.4 million TEUs in May 2022.
Rising tariffs are resulting in steady declines of import cargo volume at U.S. container ports and are anticipated to decline steadily through the end of this year following the near record summer peak, according to the nation’s biggest retailers.
The high tariffs from China have resulted in a major drop off of inbound products to the States. September volume at US container ports looks very gloomy.
US port traffic is expected to decline for the remainder of the year as tariffs take a toll on imports.
As the de minimis law ends the US reliance on imports, the EU has surpassed China in terms of total value and product variety according to a study from Germany’s IW economic institute. The study shows that the number of product groups in which at least 50% of imports come from the EU has risen to more than 3,100 with a total value of $287 billion while China accounts for 2,925 product groups worth $247 billion.
According to the Wall Street Journal, FedEx expects to take a $1 billion hit to its fiscal 2026 earnings because of recent US tariff changes. The company reported $6.1 billion in adjusted operating income in the previous fiscal year highlighting the significance of this anticipated impact. The loss is largely attributed to the end of the de minimis provision which had previously exempted lower-value packages from tariffs.
Fed Ex CEO Raj Subramaniam said during an earnings report that they reduced freighter aircraft out of Asia to the United States by 25% because of the change in tariff policy. E-commerce companies are increasingly turning to foreign trade zones to manage tariffs more efficiently as the US ends the de minimis provision that exempted shipments of $800 or less from duties. FedEx Corp.’s ability to adapt its air network from the U.S. to European markets helped stabilize international shipping volumes as Trump’s new tariffs on e-commerce goods from China pressured consumers. The May 2 cancellation of the de minimis rule, a duty-free exemption for low-value parcels, also sharply reduced airfreight for e-commerce shipments.
In an announcement on Thursday September 25th, Trump unveiled new tariffs on imported heavy-duty trucks, furniture, and pharmaceuticals set to take effect Wednesday October 1st. Trump hopes a 25% import tax on all heavy-duty trucks will increase domestic truck production.
These constantly changing U.S. tariff policies have created havoc with freight markets. As we mentioned earlier, many shippers forwarded overseas orders to beat tariff deadlines and then reduced imports because inventories are high and they are looking to find suppliers outside China — where average U.S. tariffs are 58%.
In a video briefing for journalists on Monday, DHL executives said they are working overtime helping customers deal with the rising cost, complexity and uncertainty associated with the changing tariff landscape. “For a small business owner, it can be overwhelming. So, we’ve got to be ready to help them mitigate some of these impacts by having advanced customs services, looking at things like foreign trade zones and specialized brokerage options. We have to help them manage the timing of when they owe duty and taxes, how they’re moving inventory around and positioning it for U.S. delivery as it’s coming in” said Greg Hewitt, CEO of DHL Express U.S.
More than three in four US and European companies have seen profit decline because of tariffs and 84% of businesses plan to raise prices to counter the impact, but most say it could be weeks or months before prices change according to a survey by Censuswide and software developer Enable. Nearly half are planning to reduce operations or exit high tariff markets amid ongoing uncertainty. Enable CEO Andrew Butt says, “Pricing agility has become an essential survival skill.”
TARIFFS AND THE COURTS (including the Supreme Court)
Importers are taking a wait-and-see approach after a federal appeals court ruled many of the Trump Administration’s tariffs illegal and that Trump exceeded his authority in imposing many of the tariffs. There is a stay in place until Oct. 14 and a fast-track Supreme Court appeal likely in November. The ruling raises questions about potential refunds of billions of dollars in trade duties. The US Court of Appeals for the Federal Circuit has ruled that the law the administration cited does not give the president authority to impose tariffs. The tariffs will remain in effect while the case plays out, but the decision has added further trade uncertainty potentially delaying corporate investment.
The tariffs, including the “Liberation Day” tariffs affect trillions of dollars in international commerce and have raised the average US tariff rate to its highest level in over a century.
TARIFFS, INFLATION, AND THE FLOWER BUSINESS
Inflation and uncertainty created by President Trump’s tariffs are problems for the Flower industry. They have even affected domestic growers as even plant material, machinery, and packing materials are subject to tariffs. Most of these items are not produced in the US and are unlikely to be manufactured in the US in the future.
Constant economic uncertainty stemming from unclear tariff policies is inhibiting US companies’ ability to make strategic decisions and long-term investments. Experts stress that this unpredictability undermines business confidence and could slow economic growth as both businesses and consumers face an unstable economic environment. One European flower exporter stated on social media that their US sales could be down as much as ten million Euros due to exchange rates and tariffs. This will force companies to search for other markets to make up for these sales or downsize.
As prices increase due to inflation influenced by tariffs, consumers tend to buy less floral products other than for major occasions and events. This hurts the day-to-day impulse business.
CONCLUSION
The Flower business is an economy very much influenced by tariffs, exchange rates, freight costs, immigration policy, and inflation as well as labor costs. The US flower industry depends on imports for the majority of its product. Uncertain Government policy leads to havoc with growth and investment.
Most of the custom brokers nationwide are charging a percentage of the tariffs due to the cost of handling and cost of money. This is putting a lot of stress on flower importers.
It is very apparent that the Trump Administration has figured out how to manipulate Wall Street and exchange rates. It’s not clear if this is the best way to help Main Street.
On September 25th, the Trump Administration announced new tariffs as high as 100% on certain products going into effect in October leaving even more uncertainty with businesses. Stay tuned.
We are into a government shut down that may last longer than everyone would like to see. We hope this does not hurt the flower business.There is also a National Strike in Ecuador as well a small political issue within Colombia. On September 27th, the U.S. State Department said it was revoking the visa of Colombian President Gustavo Petro who had traveled to New York for the United Nations General Assembly annual meeting.
On a lighter note, there are rumors that the NFL may extend the season by one more game in the future making the day after the Super Bowl President’s Day. This should help Valentine’s Day and give the country the (double) holiday they have been lobbying for (The day after the Super Bowl!).
Thanks for reading my rants,
The Flower Wizard
To contact David Kaplan (also known as the “Flower Wizard” or “Floradamus”) at Above All Flowers
ABOVE ALL FLOWERS 