Small-business crisis shakes Trump ally's Wisconsin seat as midterms focus turns to Eau Claire

Erin Klaus has run Tangled Up in Hue, a handmade artisan market in downtown Eau Claire, Wisconsin, for 18 years. At the end of this year she is closing her storefront. The cost of living and this small-business crisis are now at the centre of the competitive House race in western Wisconsin's third congressional district.

Klaus opened the shop amid a recession, when downtown was something of a ghost town. She weathered construction and the pandemic, but her sales have trended downward for two years. To pay staff she was dipping into her own pocket from her other job; she also works as executive director of the business non-profit Downtown Eau Claire Inc.

Klaus said: 'This is the first time it's out of my control to save my business. It just feels so desperate right now for a lot of our small business owners. From the tariff wars to inflation to cost of living to healthcare, honestly, there's no money left in the bucket at the end of the day for regular folks and, unfortunately, that means our regular folks who run businesses, too, are just not able to hang on any longer.'

Eau Claire sits in the third district, where Republican incumbent Derrick Van Orden has stuck closely to President Donald Trump and defended the administration's record. Democratic challenger Rebecca Cooke is making a third run at the seat, highlighting the economic despair of working people, farmers and business owners.

In Klaus's case, tariffs on T-shirts forced her to eat the added cost. Healthcare subsidies on the Affordable Care Act marketplace were not extended, and a paid parking programme downtown felt like the final straw. She said the messages from the Trump administration seem to insist these conditions are not happening, or are not affecting people like her, to the degree they are — which feels almost like being mocked for the hardships. She knows she is not alone among small business owners.

Amy Burke Lepper, owner of One Of A Kind Interior Design in Chippewa Falls, has worked with a cabinet maker in Canada for more than two decades, and now those cabinets carry added tariffs. Several of her clients have put off building homes because of current costs, and her retail shop, Lagom, has been remarkably slow, she said.

Burke Lepper said she has no health insurance for the first time in her life. The cost for her and her husband rose from over $1,000 a month to nearly $3,000. She does not plan to close her business, but decided to speak out so people understand how federal policies are affecting small businesses like hers. In her words, higher prices are not a magic thing — they are the result of these policies.

The district's political history is also mixed. Before Van Orden's win in 2022, Democrat Ron Kind had represented the district for more than 20 years. The mostly rural and suburban district backed Barack Obama twice, then Trump three times, but has also sometimes voted for Democrats elsewhere on the ballot. Tens of millions of dollars in outside spending has poured into the race from both sides.

Trump administration officials have travelled multiple times to the district to defend their records, and Trump has told his supporters to pretend he is on the ballot this year. Van Orden has defended the Iran war as necessary, while acknowledging it is making it exponentially harder for Republicans to hold the House and the Senate. This week Republican House Speaker Mike Johnson rallied with Van Orden, calling him one of our fighters. Van Orden told a reporter that Trump won this district three times in a row, with increasing margins every time.

Van Orden, a retired Navy SEAL, refers to Cooke as 'The Crooked One', has posted AI-generated videos of her, and called her rally with independent Senator Bernie Sanders the work of 'cocktail communists'. His earlier conduct has also drawn attention — threatening a teenage library worker over a Pride Month display in 2021, screaming at Senate pages at the US Capitol in 2023, and shouting 'lies' at Joe Biden during the 2024 State of the Union. He did not respond to requests for an interview or comment.

Cooke has emphasised how she can relate to the economic despair voters in the district feel. She grew up on a dairy farm, and her family had to sell their cows because of low milk prices and competition with larger dairies. She ran a small business in Eau Claire and still works as a waitress; she has also worked as a political consultant, which Van Orden has used to attack her working-class credentials. She has been aligned with the centrist Blue Dog Democrats, but has a Sanders endorsement and has campaigned on economic populist ideas.

Cooke's proposals include expanding the Affordable Care Act tax credit premiums that were allowed to expire, for three more years, to stop the hemorrhaging, passing a public option for healthcare, and expanding Medicare to cover vision, dental and hearing. The Iran war, she said, has just got to end, which will help bring down prices. She also wants the federal government to enforce antitrust laws against corporate conglomerates and to stop companies that use AI to surveil customers and set different prices based on that data. At the restaurant where she works, fewer people are eating out because they have no spending money, and she had to drop her own insurance after the Covid-era subsidies expired. Van Orden was one of few Republicans to vote to extend them.

Cooke said: 'It just sort of feels like nobody really cares. And I think I can talk about those things because I get it. I am in the trenches with everybody else.' She has campaigned at small-town dairy breakfasts, lutefisk lunches and county fairs, and knocked on doors. She lost by seven points in 2022, then by less than three points in 2024. In her words, even if there is a big blue wave, it will be a ripple here.

Whatever happens in the election, however, will be too late for Klaus. Tangled Up in Hue will stay open until the end of the year to sell down the products in the store and let the many dozens of artists who sell there earn some money during the holiday season. She will keep other parts of the business open, including a Saturday art market, a wholesale element and apparel printing. Klaus, a Democrat, says she will vote for Cooke for Congress; but, she added, flipping the seat does not immediately resolve all the economic pain — this is a long journey ahead, and it will certainly not be over after 3 November.