Excessive tariffs can seriously hurt small businesses in America by driving up costs, shrinking profit margins, and limiting market access. Here’s a breakdown of how and why:
💸 1. Higher Costs for Inputs
Many small businesses rely on imported goods—raw materials, parts, packaging, or finished products. Tariffs increase the cost of these imports, which directly increases operating costs.
- Example: A small furniture maker who imports wood or metal parts from abroad now pays 20% more.
- Impact: They may not have the buying power to negotiate lower prices or switch suppliers like big companies can.
📉 2. Reduced Competitiveness
When prices rise due to tariffs, small businesses either have to raise their own prices or absorb the cost.
- If they raise prices, customers might go to cheaper competitors (especially big-box stores or international sellers).
- If they eat the cost, their profit margins shrink—often to unsustainable levels.
🔄 3. Supply Chain Disruptions
Tariffs can trigger retaliatory measures from other countries or change the flow of trade. This creates uncertainty and delays.
- Small businesses often don’t have the infrastructure to pivot supply chains.
- A small clothing brand, for example, might have a single overseas supplier. If that becomes too expensive or restricted, they could be left with nothing to sell. Effectively closing their business.
🏦 4. Limited Access to Capital
Big corporations might weather the storm using reserves or investor backing. Small businesses? Not so much.
- Less cash flow due to higher costs and lower sales can make it harder to get loans or keep up with payroll, rent, etc.
- This often leads to layoffs, scaled-back operations, or complete shutdowns.
🌍 5. Loss of Export Markets
Retaliatory tariffs from other countries can make it harder for U.S. small businesses to sell their goods abroad.
- Example: A small craft brewery exporting to Canada could suddenly be too expensive for Canadian distributors, who now won't purchase.
- Other retaliatory efforts may include boycotting American goods entirely.
⚠️ 6. Increased Uncertainty & Risk
Business planning becomes nearly impossible when tariffs change unpredictably or are used as a political tool.
- Uncertainty can delay hiring, expansion, or innovation.
- Small businesses often lack the legal and financial resources to manage these rapid shifts.
- Sudden loss of inventory receiving due to unexpected tariffs can shut down a business for good.
Excessive tariffs disproportionately hurt small businesses because they operate on tighter margins, have fewer resources, and are less adaptable. While tariffs may be intended to protect domestic industry, they often end up favoring large corporations that can absorb the hit—while leaving smaller players to struggle or shut down.
Sign our petition to help keep American Small Businesses Alive: https://www.change.org/p/make-tariff-carve-out-to-save-american-small-businesses
