Now playing
01:53
Businesses warn about China's growth slowdown
CNN
Now playing
03:22
Bank of America CEO reveals his top worry about the economy
US Navy
Now playing
01:28
Pentagon confirms UFO video is real, taken by Navy pilot
marte fotos volcan olympus mons sistema solar hope ultravioleta perspectivas mexico_00000411.png
marte fotos volcan olympus mons sistema solar hope ultravioleta perspectivas mexico_00000411.png
Now playing
04:12
Why we are going to Mars
Twitter | @brady9dream
Now playing
02:10
Pet owners pitch their pups to be dog brew's 'Chief Tasting Officer'
Now playing
01:32
Scientists turned spiderwebs into music and it sounds like a nightmare
LONDON, ENGLAND - DECEMBER 07:  A visual representation of the digital Cryptocurrency, Bitcoin on December 07, 2017 in London, England. Cryptocurrencies including Bitcoin, Ethereum, and Lightcoin have seen unprecedented growth in 2017, despite remaining extremely volatile. While digital currencies across the board have divided opinion between financial institutions, and now have a market cap of around 175 Billion USD, the crypto sector coninues to grow, as it continues to see wider mainstreem adoption. The price of one Bitcoin passed 15,000 USD across many exchanges today taking it higher than previous all time highs.  (Photo by Dan Kitwood/Getty Images)
Dan Kitwood/Getty Images
LONDON, ENGLAND - DECEMBER 07: A visual representation of the digital Cryptocurrency, Bitcoin on December 07, 2017 in London, England. Cryptocurrencies including Bitcoin, Ethereum, and Lightcoin have seen unprecedented growth in 2017, despite remaining extremely volatile. While digital currencies across the board have divided opinion between financial institutions, and now have a market cap of around 175 Billion USD, the crypto sector coninues to grow, as it continues to see wider mainstreem adoption. The price of one Bitcoin passed 15,000 USD across many exchanges today taking it higher than previous all time highs. (Photo by Dan Kitwood/Getty Images)
Now playing
03:07
Bitcoin has an energy problem
Accused $50 billion Ponzi scheme swindler Bernard Madoff exits federal court March 10, 2009 in New York City. Madoff was attending a hearing on his legal representation and is due back in court Thursday.  (Photo by Mario Tama/Getty Images)
Mario Tama/Getty Images
Accused $50 billion Ponzi scheme swindler Bernard Madoff exits federal court March 10, 2009 in New York City. Madoff was attending a hearing on his legal representation and is due back in court Thursday. (Photo by Mario Tama/Getty Images)
Now playing
03:11
Bernie Madoff, infamous Ponzi schemer, dead at 82
Now playing
05:18
Coinbase CFO: We're an on-ramp to the crypto economy
A man checks vine buds during the burning of anti-frost candles in the Luneau-Papin wine vineyard in Le Landreau, near Nantes, western France, on April 12, 2021, as temperatures fall below zero degrees celsius.
Sebastien Salom-Gomis/AFP/Getty Images
A man checks vine buds during the burning of anti-frost candles in the Luneau-Papin wine vineyard in Le Landreau, near Nantes, western France, on April 12, 2021, as temperatures fall below zero degrees celsius.
Now playing
01:37
See how French winemakers are trying to save their crops from frost
SUEZ, EGYPT - MARCH 29: The container ship 'Ever Given' is refloated, unblocking the Suez Canal on March 29, 2021 in Suez, Egypt. This morning the container ship came partly unstuck from the shoreline, where it ran aground in the canal last Tuesday, and later resumed its course shortly after 3pm local time. The Suez Canal is one of the world's busiest shipping lanes and the blockage had created a backlog of vessels at either end, raising concerns over the impact on global shipping and supply chains. (Photo by Mahmoud Khaled/Getty Images)
Mahmoud Khaled/Getty Images
SUEZ, EGYPT - MARCH 29: The container ship 'Ever Given' is refloated, unblocking the Suez Canal on March 29, 2021 in Suez, Egypt. This morning the container ship came partly unstuck from the shoreline, where it ran aground in the canal last Tuesday, and later resumed its course shortly after 3pm local time. The Suez Canal is one of the world's busiest shipping lanes and the blockage had created a backlog of vessels at either end, raising concerns over the impact on global shipping and supply chains. (Photo by Mahmoud Khaled/Getty Images)
Now playing
00:57
Egypt seizes Ever Given ship, asks for $900M in compensation
CNN
Now playing
03:06
Hear doctor's message for people with J&J vaccine concerns
Barbers from King's Cutz give haircuts indoors while observing COVID-19 safety restrictions on March 13, 2021 in Los Angeles, California.
Mario Tama/Getty Images
Barbers from King's Cutz give haircuts indoors while observing COVID-19 safety restrictions on March 13, 2021 in Los Angeles, California.
Now playing
01:43
US consumer prices increased in March
Now playing
03:21
Teachers under pandemic stress are quitting: I didn't feel safe
Domino's autonomous vehicle will deliver your pizza
Domino's
Domino's autonomous vehicle will deliver your pizza
Now playing
01:12
Watch this robot deliver a Domino's pizza
Now playing
01:27
See the first community of 3D-printed homes
(CNN) —  

Most of the baseball caps sold in the United States are made in China, and President Donald Trump’s trade war has made them 10% more expensive.

The tariff forced Missouri-based Cap America, a sports embroidery outfit that’s bought most of its caps from China since 2001, to make changes. The company is trying out a new supplier in Bangladesh for some orders – and after eating the full cost of the tariffs for months, CEO Phil Page also decided in January to raise prices on his hats.

Page and business owners across the country are waiting to hear how trade talks between US and Chinese negotiators progress when they meet this week in Beijing.

Trump has threatened to escalate the 10% tariff he’s placed on $200 billion of Chinese goods to 25% if a deal isn’t reached. But if talks go well, the tariffs might be lifted altogether.

Unlike the oil price embargo of the 1970s, which led to long lines at gas stations, the drama – and the pain – of Trump’s China trade fight has so far been invisible to most Americans. The consumer price index, which tracks inflation on a basket of consumer goods like food and clothing, actually fell by 0.1 percent in December.

The administration strategically put the highest tariffs on imports mostly used in the production of other items, like semiconductors or refrigerators. The latest round, which came later in the year, did include a variety of consumers goods, ranging from luggage to baseball gloves, but the tariff rate is lower.

The duty isn’t passed on to consumers if importers or retailers decide to absorb some of the added cost – which many, like Page, did heading into the holiday season.

In a recent survey by the National Association for Business Economics, 94% of businesses said they have not raised prices because of changes in trade policy. Most haven’t delayed hiring or other investments, either.

By many measures, the US economy appears strong. Job creation boomed in January. Manufacturing jobs, specifically, have been growing for two years and wages were up, too.

China’s retaliatory tariffs have hit US farmers harder than consumers, prompting the administration to offer aid to soybean, corn, dairy, wheat, cotton, sorghum and pork producers, who received direct payments from the US Department of Agriculture. And China agreed to start buying soybeans again after the last time Trump and Chinese President Xi Jinping met. Most farmers, though, say the aid payments didn’t make them whole.

There are some signs that the tariffs could be starting to have more of an effect on the US economy.

Americans imported less in November for the first time since Trump began putting tariffs on Chinese goods in July, according to a report released last week. More recent data has been delayed because of the government shutdown.

And consumer sentiment dropped to its lowest level of Trump’s presidency in January, likely dragged down by trade tensions as well as rising sings of a global economic slowdown, a volatile stock market, and the government shutdown.

Sales were down through the holiday season and January at the Luggage Shop of Lubbock in Texas, where owner Tiffany Zarfas Williams is getting emails from vendors about price increases almost every day now. Backpacks, briefcases and luggage have all been hit with a 10% tariff.

Not only did she have to raise prices, but many of her customers are farmers who are struggling with tariffs on their exports, and she worries they may have less money in their pockets to spend.

“If we all need to take one for the team, we can weather a 10% increase. But I just want to make sure the tariffs are going to get us to the end goal,” Zarfas Williams said.

The Trump administration has used the tariffs as a tool to bring Chinese officials to the negotiating table and address what it sees as unfair trade practices, like intellectual property theft from American businesses and forced technology transfers in exchange for doing business in China.

The United States has fought China over these issues for years and many in the business community believe they need to be fixed.

“I think the big difference under the Trump administration is that we’ve shifted to a more combative US-China relationship,” said Phil Levy, a senior fellow at the Chicago Council on Global Affairs who served as a senior economist for trade under President George W. Bush.

“They want to isolate China as much as possible,” he said.

In the meantime, business owners like Cap America’s Page are doing their best to work around the uncertainty. Page actually increased his imports from China last year, in an attempt to get ahead of potential new tariffs, and wound up buying a new warehouse to store the extra inventory.

“It’s just difficult to gauge what his administration will do,” he said. “They’re so unpredictable.”