Disorderly tariff policies and trade conflicts are causing significant damage to small enterprises.
The Struggle of Small Businesses Under Trump's Trade Policies
America's small businesses, the backbone of our economy, are now facing a daunting battle under President Trump's trade agenda. Despite the promise of protection, these homegrown companies are crumbling under the weight of escalating trade wars and unforeseen tariffs.
For instance, Katharine Burke, a small business owner, had dedicated two years to her self-care product business, Purryfuls, and finally saw the first line of her plushies going into production in early April. However, this milestone was overshadowed by the massive tariffs imposed on imported goods from China, where Purryfuls are manufactured.
Melanie Abrantes, a seasoned business owner, found herself in need of ordering artisan tools and raw materials for her growing carving club. However, the volatile trade environment has led to sudden price hikes for unique items sourced from countries like Japan and Portugal.
For others like Beth Fynbo Benike, 2025 was set to be a year of significant growth for Busy Baby, a baby products company she established in 2017. An order to replenish inventory for her website and Amazon was finalized, but the container now carries a hefty price tag of nearly $230,000 for arrival on US soil.
The erratic nature of Trump's trade policies and the severe tariffs have put American small businesses in a precarious position. costs are skyrocketing, longstanding supply chains are unraveling, and growth plans are being stifled – all of which threaten to eliminate American-born businesses.
"I'm fully leveraged against this, and the first thought that came to my head is, 'I'm going to lose my house. My boys are not going to have a place to live,'" Benike said, reflecting the fears of many small business owners.
Small businesses are caught between the crossfire of escalating trade wars. Despite efforts to manufacture products domestically, many are forced to depend on imported goods due to the scarcity of affordable and feasible options.
Burke shares the same predicament, "I tried for American manufacturing because I thought it would be easier on me to work with somebody local, but it didn't exist - it hasn't for decades." Instead, she turned to China to help design, test, and manufacture her Purryfuls plushies.
Economists have issued warnings that the sharp increase in tariff rates, the highest in over a century, brings cascading negative economic consequences, such as higher costs, rising inflation, and gashed earnings that could lead to a pullback in spending, potential business failures, increased unemployment, and a recession.
Small businesses represent the greatest immediate risk from these tariffs. According to Gus Faucher, chief economist at the PNC Financial Services Group, if small businesses start buckling, it could create a "significant economic drag." This is concerning because small businesses employ nearly half of the American workforce and serve as critical drivers of economic growth.
However, small businesses lack the influence to negotiate prices as large corporations can, making them more vulnerable to tariff-induced cost spikes. This uncertainty can stifle investment, leading to a weaker economy, higher unemployment, and inflation.
Burke, Abrantes, and Benike embody the struggle of small businesses amidst the chaos and unpredictability of Trump's trade policies. Their stories serve as an ominous warning – the American dream may be slipping away one small business at a time.
- Katharine Burke, despite seeing her self-care product business, Purryfuls, going into production, faces challenges due to the tariffs imposed on imported goods.
- Melanie Abrantes, in a volatile trade environment, experiences sudden price hikes for unique items sourced from countries such as Japan and Portugal.
- The growing baby products company, Busy Baby, faced a $230,000 increase in costs for a container of replenished inventory due to Trump's trade policies.
- Economists predict that the increase in tariff rates could lead to higher costs, rising inflation, stifled investment, and even a recession, posing a significant risk to small businesses, which employ nearly half of the American workforce and drive economic growth.