I have a client in New Jersey who makes industrial films. Their main supply comes from two Chinese firms. You might think they’ll be hit hard by President Trump’s tariffs, right?
Fortunately, the owner and her partner were paying attention. Back in 2023, they understood that the presidential election was going to be tough—like, really tough. By 2024, it got even tighter. And what was Trump saying back then?
He promised a big tax cut but never explained how it would be funded. He aimed to roll back many regulations from the Biden administration, including those related to the environment and employee rights. He even vowed to deport millions of undocumented immigrants. But for my client, the most crucial promise was the major tariffs aimed at China. They took that seriously.
They aren’t supporters of Trump, but they are realists. So, in 2023, they started hunting for alternative suppliers.
They reached out to organizations like the World Trade Centre Association and the Small and Medium Enterprise Development Center. They also got assistance from the International Trade Bureau. They traveled to India, Malaysia, and Brazil, realizing that if Trump was elected, their supply chain would be in jeopardy. They recognized that the Biden administration wasn’t exactly a friend to China either. It’s tough to run a business reliant on supplies that can be abruptly threatened by a single political figure. So, they acted.
Sadly, not all business owners took similar precautions.
Media reports show that small businesses are currently struggling due to Trump’s tariffs. In Salt Lake City, a steel product manufacturer mentioned their company could be “devastated.” A California flower shop owner remarked about a significant rise in costs after relying on South America for supplies. Two business owners in Iowa, who get most of their products from overseas, called it a “nightmare” for the upcoming holiday season. According to reports, the high-end electronics sector is reducing employee hours, and guitar sellers fear a “mass extinction” of small businesses.
I genuinely feel for these business owners, but, well, life often isn’t fair. History has a way of repeating itself. Companies, large or small, are usually at the mercy of government policies. That holds true today.
This is why my client and her partner took Trump’s tariff warnings seriously, informed by historical context. They were smart about it. Like many savvy businesspeople I’ve encountered, they share one key trait: they plan ahead. They always have a backup plan. They diversify.
Investors know that relying on one political entity carries risks. The SEC requires companies to disclose any clients that represent over 10% of their business. Flower shops, guitar makers, and electronics manufacturers all leaned heavily on foreign suppliers. Sure, that model worked well for them—until now. It’s a precarious approach, especially when depending on a single source amid political uncertainty.
Of course, that’s easier said than done. But, similar to my New Jersey clients, those struggling small business owners should have prepared for potential risks. My clients saw the signs two years ago and took proactive measures. They were not alone in this.
For instance, a chief strategy officer from a robotics firm said they always “planned nine to twelve months ahead” and had a backup option to produce hardware elsewhere, outside China. “Maybe this is a good time to say, ‘Don’t put all your eggs in one basket,'” they remarked. “And then we’ll start exploring other regions to minimize future risks.”
A Maryland business owner, a former Marine, stockpiled materials months prior to the tariffs and admitted it was a gamble. But countless other small business owners seem to just cross their fingers, hoping for the best. That’s not a sustainable approach, especially when employees depend on you.
So, do I feel bad for business owners struggling under Trump’s tariffs? I do, but that’s part of the game in business. You take risks for potential rewards. If you don’t plan ahead or diversify, you’re likely to face some tough consequences.
Gene Marks is the founder of Marks Group, a small business consulting company.
