How New Tariffs Could Impact Your Small Business
.svg)
- Rising Costs for Small Businesses – New tariffs will increase prices on imported goods, impacting small businesses more than large corporations.
- Mixed Reactions from Business Owners – Some, like Steve Chou, believe the effects will be manageable, while others worry about shrinking profit margins and price-sensitive customers.
- Lack of Preparedness – A majority of small businesses have yet to fully prepare for tariff-related cost increases and supply chain disruptions.
New tariffs are expected to raise prices, which could hurt consumers and small businesses more than large corporations. While the goal is to reduce trade deficits and boost domestic manufacturing, many experts believe small businesses will feel the negative effects long before any long-term benefits appear.
Will Your Small Business Be Affected?
Even though these tariffs target exporters from other countries, U.S. small businesses won’t be immune. Higher costs for imported goods will likely trickle down to American consumers—meaning small businesses will feel the squeeze too.
Under President Trump’s new tariff policies, a 10% baseline tariff will apply to goods from all countries except those in the U.S.-Mexico-Canada Agreement (USMCA). Additionally, around 60 countries labeled as "worst offenders" will face even higher "reciprocal tariffs," based on the rates they charge U.S. goods. Some key examples include:
- China – 34%
- European Union – 20%
- Vietnam – 46%
- Taiwan – 32%
- Japan – 24%
What Small Business Owners Are Saying
E-commerce expert Steve Chou, who has been importing products from China for years, shared his insights on how tariffs could impact small businesses.
Through his education platform, MyWifeQuitHerJob.com, Chou helps other e-commerce sellers navigate challenges like tariffs. He recalls that during Trump’s last term, tariffs were introduced gradually, with different rates depending on the product type.
“Most of my products (at Bumblebee Linens) were hit with a 7.5% tariff,” says Chou. “There were a lot of exemptions and lower rates for everyday products.”
For some small businesses, lower tax rates helped offset higher import costs. Chou advises small business owners not to panic just yet:
“If history is any guide, the effects of tariffs will be noticeable but not catastrophic.”
However, not all business owners share his optimism. Many fear rising costs will force them to either:
- Increase prices, which may drive away price-sensitive customers (especially on platforms like Amazon).
- Absorb the extra costs, reducing profit margins.
Are Small Businesses Prepared?
A 2024 Endeavor Business Intelligence Pulse Survey found that:
- Only 16% of businesses feel fully prepared for potential tariff increases.
- 54% are still in the early stages of planning.
- 23% have made no preparations at all.
How Small Businesses Could Be Affected
Here are some key ways tariffs might impact small businesses:
✅ Higher costs for goods and materials – If you rely on imported products or components, your expenses may rise.
✅ Supply chain disruptions – Tariffs can cause delays and make sourcing materials more challenging.
✅ Increased vehicle costs – If your business depends on fleet vehicles, expect higher prices for purchase and maintenance.
Stay Informed & Adapt
American Capital Group is committed to keeping small business owners updated on tariffs and providing helpful resources to navigate these changes. As new policies roll out, we’ll continue updating this article with the latest insights.
.png)
