Follow up

Last week the Peak Report covered the potential impact that the Trump administration’s proposed federal funding freeze will have, or is having, on the Town of Nederland and Boulder County.

On Monday, February 3, 2025, U.S. District Judge Loren L. AliKhan extended a block on the Memorandum (M-25-13) that calls for a “temporary pause of agency grant, loan, and other financial assistance programs.” An order was also sent to the Office of Management and Budget (OMB) to disregard the directives within M-25-13.

Judge AliKhan gave the OMB until Friday, February 7, to give a status report on how it is complying with the order. However, within the course of a week it was found that funds were still frozen, with many organizations and agencies claiming that they did not have access to federal funds they were already awarded. 

Colorado Attorney General Phil Weiser, along with attorneys general from Arizona, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia filed a lawsuit, alleging that M-25-13 violates the US Constitution.

On Monday, February 10, U.S. District Judge John McConnell Jr. agreed with attorneys general in calling the attempted funding freeze “unconstitutional.”

Judge McConnell concluded that the administration has continued to withhold funding despite previous temporary restraining orders and issued a new order for the administration to “immediately restore frozen funding.” 

Colorado Governor Jared Polis and U.S. Senators Michael Bennet and John Hickenlooper also sent a letter to the recently appointed OMB Director Russell Vought on Monday. 

The letter reads: “Companies, local governments, state agencies and nonprofit organizations entitled to funds from a range of programs continue to report that they cannot access their federal grant portals or receive reimbursements due to them under their federal grant contracts despite both the court order and the promises from the agencies.

“The consequences of this continued uncertainty are severe and could have a devastating effect on the programs and people this funding supports.”

The Colorado officials also asked Vought to provide, by February 14, a detailed explanation of the steps the OMB will take to ensure compliance of the court order to restore disbursement of federal funds.

Local authorities are still unsure regarding the future of federal funding, and are monitoring the situation closely. Nederland Town Administrator Jonathan Cain indicated that they are still awaiting federal reimbursement funds, which are taking “longer than normal” to be received.

On February 11, Gilpin County Public Works Director John Combs submitted an engineering study to remedy South Beaver Creek Road. The Gilpin County commissioners questioned whether the project could receive federal funding due to the Trump administration's recent freeze.  

Gilpin County Manager Ray Rears said, "We don't know what the future holds. The uncertainty of federal funding is a new variable." 

Commission Chair Sandy Hollingsworth said, "It's not that we won't ever receive federal funding, but the uncertainty now looms over us."

This week

This week the focus of the Peak Report is on a February 1 memo from the White House, labeled a “fact sheet,” that states President Donald Trump’s intention to implement additional tariffs on goods imported from Canada, China, and Mexico. 

According to the official fact sheet, the tariffs are in response to a “national emergency” and “public health crisis” regarding illegal immigration and drug trafficking. 

“Chinese officials have failed to take the actions necessary to stem the flow of precursor chemicals to known criminal cartels and shut down money laundering by transnational criminal organizations,” the fact sheet reads.

“The government of Mexico has afforded safe havens for the cartels to engage in the manufacturing and transportation of dangerous narcotics, which collectively have led to the overdose deaths of hundreds of thousands of American victims.

“There is also a growing presence of Mexican cartels operating fentanyl and nitazene synthesis labs in Canada. A recent study recognized Canada’s heightened domestic production of fentanyl, and its growing footprint within international narcotics distribution.”

A Congressional Research Service (CRS) report from December, 2024 indicates that Mexico replaced China as the primary source of illicit fentanyl coming into the U.S back in 2019. 

According to the Drug Enforcement Agency’s 2024 National Drug Threat Assessment, the Sinaloa and the Jalisco New Generation Cartels are the criminal organizations responsible for the manufacturing of the fentanyl. These cartels use pill presses imported from China to lace counterfeit medication, which is sold in pharmacies along the Mexico-U.S. border and also transported across the border, reportedly in passenger vehicles. 

The efforts of the Biden administration to “reduce tensions and rebuild the U.S.-Mexico security relationship” were listed in the CRS report, which include the intergovernmental Bicentennial Framework for Security, Public Health, and Safe Communities, started in 2021.

In 2023, U.S. and Mexican officials noted “increased interdictions, arrests, and indictments for arms and fentanyl trafficking.” And in 2024, the National Drug Control Strategy was implemented. 

Also in 2024, the Consolidated Appropriations Act made available $125 million in global funds, specifically to mitigate the flow of fentanyl and other synthetic drugs into the U.S. from Mexico. For Fiscal Year 2025, both the House and Senate versions of the State, Foreign Operations, and Related Programs Act makes available $175 million for the same purpose. 

“The U.S. Centers for Disease Control and Prevention estimate that synthetic opioids may have resulted in more than 61,800 U.S. overdose deaths between August 2023 and July 2024,” the CRS report reads. 

“The recent decline in overdose deaths has raised questions regarding the possibility that supply-side counternarcotics policies have played a role in altering the behavior of drug traffickers.”

A September, 2024 report from Science Direct indicates that despite an increase in fentanyl-based overdose deaths in Canada, “there have been no national-level studies evaluating the proportion of illicit opioids containing fentanyl or fentanyl analogues in Canada.” 

According to multiple news sources, federal statistics indicated that, out of a total 21,889 pounds of fentanyl seized by U.S. border authorities in 2024, only 43 pounds were seized at the Canadian border, equating to 0.2%. 

With the intention of leveraging “America’s economic position as a tool to secure our borders against illegal migration and combat the scourge of fentanyl,” as it is described in the White House fact sheet, the Trump administration’s tariffs have local businesses worried about their bottom line.  

In addition to the 25% tariff on goods imported from Canada and Mexico, and a 10% tariff on goods from China, Trump doubled down on Friday, February 7, stating that he plans even more “reciprocal” tariffs.

Though Trump did not specifically state which goods from which countries would be taxed, he has addressed concern over the European Union’s 10% tariffs on auto imports, and members of his administration have spoken against high tariffs and trade barriers from Brazil, India, and Vietnam. 

On February 3, Trump paused the execution of the tariffs on Mexico and Canada, for 30 days. According to Politico, “President Donald Trump reached agreements with Mexico and Canada on Monday that will delay his threatened tariffs for one month, pausing the drama that roiled global markets and panicked businesses across the country.

“Trump confirmed the one-month delays in posts on Truth Social.”

However, on Monday, February 10, the Trump administration worked to remove the previous administration’s exceptions and exemptions placed upon Trump’s 2018 tariffs on imported steel and aluminum, making all such material coming into the U.S. to be taxed at a minimum of 25%. 

Consumers and shareholders alike have been reacting accordingly to these tariffs, as the rising costs of raw materials will inevitably lead to manufacturing costs rising, which will cause business owners to have to raise the price they charge their customers. 

A government-drafted inflation report shows economists warning that consumer prices will rise by 2.8%, which correlates with consumer studies which show the public as anticipating inflation, if not recession, as a result of the tariffs. 

On one hand, stock prices for major steel companies, including U.S. Steel, Nucor, and Steel Dynamics, rose due to a perceived increase in profits due to the tariffs. And on the other hand, shares for companies that rely on steel and aluminum supply, such as General Motors, were sold off after Trump’s announcement. 

For Colorado, experts and officials are expecting these tariffs to be harmful not only for small businesses, but also for major industries, including the construction and outdoor recreation industries. 

The Trump administration’s policies regarding international trade will undoubtedly make large construction projects more expensive, as will the administration’s crackdown on illegal immigrants, as the U.S. construction industry reportedly employs 1.5 million undocumented workers.

Kent Eversole, President of the Outdoor Industry Association said in a press release that “tariffs on outdoor products threaten to raise costs for businesses and consumers alike, creating new economic pressures for an industry that fuels $1.2 trillion in consumer spending and supports 5 million jobs. These rising costs could slow job growth, stifle innovation, and potentially force some to close their doors.” 

Colorado’s agriculture industry is also facing uncertainty due to the Trump administration’s tariffs and immigration policies. Many Colorado producers are worried about the impact of nations, like Canada, imposing their own retaliatory tariffs, affecting the cost of beef, pork, dairy, and certain produce.

Colorado currently exports more than $420 million dollars worth of animal meat to Canada. 

On Thursday, January 9, Governor Polis delivered his State of the State address, in which he detailed strides Colorado politicians are making towards lowering crime, closing the housing gap, providing health and education, and creating economic strength. 

“Just as I spoke out against President Biden’s solar tariffs, I will strongly criticize President Trump’s proposed tariffs that would raise the costs of everything, from groceries to housing to energy and so much more,” Polis said.

“We opened the Mexican domestic market to Colorado-grown potatoes and will fight against misguided efforts that threaten the progress we’ve made, hurt our farmers, or drive up the price of groceries.

“None of us need to shy away from disagreements on policy – be it with the President of the United States or any member of our legislature. But let me be clear – there is a big difference between disagreeing with policy and attacking our democratic institutions,” Polis continued.

“Regardless of what happens in Washington DC, we will keep our eye on the ball, on what matters most to Coloradans: affordability, livability, sustainability.” 

In the Town of Nederland, the tariffs are set to affect nearly every restaurant, gas station, grocery store, and liquor store in some capacity. Whether ordering imported goods directly or through a distributor, the increased cost of some goods will either force establishments to raise prices or stop carrying those goods altogether. 

And though Trump’s 10% tariff on oil from Canada may not immediately impact Nederland’s gas prices, there is the potential of distributors raising their surcharges for the delivery of even domestic products. And many businesses already suffer increased delivery charges simply a result of being in the mountains.

These taxes and potential surcharges can push a business to redetermine whether it’s worth ordering and carrying certain items, such as cigarettes and other tobacco products, since sales of those items will no longer generate a profit for the business. 

“A lot of the new vinyl that I get, maybe 25% of the new stuff that I get, is pressed overseas,” Ryan Blackwell, owner of Boogie Records, told The Mountain-Ear. “Most of the stereo equipment that I get is made overseas. Most modern electronics are made in China.

“Not to mention the ripple effect, it’s most certainly going to impact US manufactured stuff as well. Everything is going to go up to some extent,” Blackwell added.

“I don’t know how much fuel we get from Canada, but that’s going to increase the cost of transportation, so even if it’s coming from Kentucky there will be an extra charge.” 

“Wilcor, Stansport, and Coghlan’s get a lot of their stuff made overseas,” said John Thompson, owner of the Mountain Man Outdoor Store. “The caribiners, they cost 99 cents or $1.99. I can get them made in the United States, but they’ll be $8, and no one will buy them for $8.”

“Those guitar straps are made in Canada,” Doug Armitage, owner of Brightwood Music, pointed to a rack of custom leather guitar straps, made by Perri’s Leather. “They sell for $29; to have one of these leather straps made for you would cost $100.

“If we mark it up by 25%, it’s now $35, but that’s just marking it up by list price, so it’ll be right around $37. My business will probably drop by about 30% because the comfort zone for that strap is under $30. And from 15 years of doing business in Nederland I know this as a fact.”

Armitage equated operating under Trump’s tariffs to when international trade was shackled during the COVID-19 outbreak, citing examples of how his business suffered due to his lack of being able to order popular brands of guitars and other instruments.   

“No one wants to place an order knowing it will cost 25% more than it did, when we’re doing everything else the exact same.”

Jason Rice, Manager of Dam Liquor, has been carefully monitoring the situation, unsure of whether the tariffs held any weight and were any more than Trump’s attempt at trade negotiations. 

In the event that the tariffs were to go into effect, Rice only had one piece of advice in regard to how they will impact the price of imported liquors: “You better start liking vodka,” he said.   

Next week: Continued reporting on how tariffs will affect local businesses.

Also, a deep dive into the state of commerce in Nederland, as several businesses have either recently been shuttered, or remain as such, have sold to new owners, or have altered their business model in order to breathe new life into what business owners are calling a dead ski season.