President Trump’s Tariffs: Impact on Small Businesses and How to Respond

 

by Jackie Navarrete

President Trump’s Tariffs: What They Mean for Small Business Owners—and How to Respond

When President Donald Trump introduced sweeping tariffs during his time in office, he reignited a long-standing debate over global trade, manufacturing, and economic nationalism. Designed to protect American industries and level the playing field, these tariffs came with real-world consequences—particularly for small businesses.

While the intent was to bolster domestic production and encourage fairer trade relationships, many small businesses, especially those that rely on imported goods and global supply chains, have had to navigate new and sometimes difficult terrain.

In this blog, we’ll break down what these tariffs actually are, which goods are affected, how small businesses are feeling the pressure—and, most importantly, what you can do about it.

What Are Tariffs, and Why Were They Introduced?

Tariffs are taxes imposed by a government on imported goods. Under President Trump, the U.S. introduced several rounds of tariffs, targeting countries such as China, Canada, Mexico, and members of the European Union. The rationale? According to the Trump administration, these tariffs were meant to:

• Protect American jobs
• Revive U.S. manufacturing
• Penalize countries accused of unfair trade practices
• Reduce the U.S. trade deficit

While large corporations can often absorb these changes or quickly adapt, small businesses face unique challenges. They operate on tighter margins, have fewer supplier options, and rely heavily on cost predictability.

What Kinds of Goods Are Impacted?

The tariffs affected a wide variety of goods, with some industries hit harder than others. Here are some of the specific imported products that became more expensive as a result:

 Industrial Materials

• Steel and aluminum from China, Canada, and the EU were hit with 25% and 10% tariffs, respectively.
  • Impact: U.S. manufacturers—like auto shops, custom metal fabricators, and construction businesses—faced increased costs for raw materials.
  • Example: A small welding business in Ohio that builds custom gates might see steel prices jump, raising overall project costs.

 Food and Beverage

• European cheeses, wine, olive oil, and whiskey from countries like France, Italy, and Scotland were also taxed.
  • Impact: Specialty food shops, boutique grocery stores, and restaurants that feature imported items had to adjust menus, raise prices, or find domestic alternatives.
  • Example: A wine bar in New York that imported French Bordeaux might now pay 25% more per bottle.

 Tools and Machinery

• Auto parts, machinery, electronics, and components used in manufacturing also faced tariffs.
  • Impact: Small manufacturing companies, auto repair shops, and tech assembly businesses were particularly vulnerable.
  • Example: A Texas-based auto body shop that sources brake pads and electrical components from Mexico may have experienced a 10–20% rise in costs.

 Consumer Goods

• Furniture, luggage, toys, and appliances—many of which come from China—were included in tariff lists.
  • Impact: Small retailers had to decide whether to eat the cost or raise prices.
  • Example: A baby boutique in Florida might now pay more for cribs and strollers sourced from overseas manufacturers.

How Are Small Businesses Affected?

For small business owners, the effects of tariffs go beyond just a higher invoice from their suppliers. Tariffs impact several areas of the business ecosystem:

1. Higher Costs

When the cost of goods goes up, so does the cost of doing business. Small businesses that can’t negotiate better pricing or scale their purchasing power like big-box retailers may find themselves squeezed from both ends.

2. Supply Chain Disruptions

Some suppliers may delay shipments or shift sourcing strategies, leading to product shortages or longer lead times. This can interrupt customer service and harm brand reputation.

3. Customer Expectations

Raising prices is a delicate dance. Customers, especially in competitive markets, may balk at price hikes, forcing business owners to absorb costs and cut into profits.

4. Planning Challenges

The unpredictability of trade policy creates uncertainty. When you’re unsure if next month’s costs will jump again, it’s hard to confidently make investments, hire new employees, or plan for growth.

What Can Small Business Owners Do About It?

While you can’t control international policy, you can control how your business responds. Here’s a roadmap to help small business owners not just survive, but adapt and thrive.

 1. Reevaluate Your Supply Chain

Action Step: Conduct a full audit of your current suppliers. Are there domestic options you can explore? Can you negotiate better deals or longer-term contracts to lock in pricing?

Example: A small lighting manufacturer in Indiana that previously imported LED parts from China switched to a U.S.-based distributor. While the unit cost was slightly higher, the absence of tariffs and quicker shipping time actually improved profitability.

Tip: Look for supplier diversity. Having multiple sourcing options reduces risk and provides leverage during negotiations.

 2. Adjust Pricing Strategically

Raising prices can be scary, but it doesn’t have to scare off your customers if done correctly.

Action Step: Introduce small, incremental price increases and clearly communicate the value of your products and services.

Example: A Chicago-based bakery that used imported European chocolate began offering both “classic” and “signature” product lines. The signature line kept premium imported ingredients (at a higher price), while the classic line used domestic options for budget-conscious customers.

Tip: Bundle products or create loyalty programs to soften the impact of price changes.

 3. Focus on “Made in America” Marketing

There’s a growing market for American-made goods—lean into it.

Action Step: If you switch to domestic suppliers, let your customers know. Update your marketing materials, website, and product tags to highlight your commitment to U.S. manufacturing.

Example: A Pennsylvania-based apparel brand replaced imported cotton with American-grown fibers. They launched a “Homegrown Threads” campaign and saw sales rise among shoppers looking to support U.S. businesses.

Tip: Transparency builds trust. Let customers know where their products come from and why you made the change.

 4. Improve Operational Efficiency

If you can’t avoid cost increases, make up for them elsewhere.

Action Step: Look for ways to cut waste, automate processes, or renegotiate service contracts.

Example: A Phoenix-based eCommerce shop upgraded its order management software to reduce labor hours and errors in fulfillment. That extra efficiency helped them absorb rising inventory costs without increasing prices.

Tip: Analyze your operations regularly—cost creep can happen silently over time.

 5. Advocate and Stay Informed

Policy changes can happen fast. Staying engaged ensures you’re not caught off guard.

Action Step: Join industry associations or local business groups that advocate for small business interests. Subscribe to trade newsletters, attend webinars, and keep up with government updates.

Example: The National Small Business Association (NSBA) offers regular policy updates and resources for navigating trade challenges. Joining such organizations gives you a voice and early access to potential shifts in regulations.

Final Thoughts

Whether you see tariffs as necessary protectionism or a disruptive barrier, the reality is this: they are part of doing business in a global economy that’s constantly evolving. Small business owners don’t have the luxury of standing still—they are some of the most adaptable, innovative people in the workforce.

If you’re a small business owner, this moment is your opportunity to:

• Reassess your operations
• Build stronger supplier relationships
• Strengthen your customer loyalty
• Lean into transparency and authenticity

Tariffs may raise the cost of doing business—but they also offer a chance to rethink how we build, source, and sell. With the right strategy, grit, and a little creativity, your business can turn challenge into opportunity.

Need help streamlining your operations or upgrading your payment systems?
At Velocity Merchant Services, we specialize in helping small businesses run more efficiently and grow faster. From state-of-the-art POS systems to cash discount programs that keep more money in your pocket, we’ve got your back.

Let’s build something great—together.