President Donald Trump continues to address his critics by highlighting recent trade developments.
This week, he announced a significant trade agreement with the European Union, totaling around $1.35 trillion. This follows his successful negotiation of a $550 billion deal with Japan just days earlier. Notably, the U.S. Treasury Department has reported record-breaking tariff revenues, accumulating $150 billion this year. New GDP statistics indicate that the economy is expanding more quickly than inflation.
Some believe that a rebate, adjustment, or complete exemption could suggest that Trump is effectively reacting to market demands.
While there’s cause for Trump to celebrate, he’s also aware that tariffs can be problematic. In February, he had cautioned that these tariffs might inflict pain on both consumers and businesses. Recently, he backed a proposal from Missouri Republican Senator Josh Hawley for a rebate of at least $600 for working-class Americans affected by tariffs.
This principle ought to extend to those who play a crucial role in the economy, namely small business owners.
Since government-imposed restrictions began, small businesses have been struggling significantly. The National Independent Business Report shows quite a grim picture concerning job creation. According to Bank of America, while employment costs are down, many entrepreneurs are resorting to credit cards just to stay afloat amid challenging market conditions.
To alleviate this burden, the U.S. Chamber of Commerce has urged the Trump administration to provide automatic tariff exemptions for small and medium-sized businesses. These companies lack the cash reserves or supply chain flexibility to absorb rising costs, making quick recovery nearly impossible. Moreover, the Chamber proposed exemptions for businesses that can prove tariffs jeopardize American jobs or involve goods not produced domestically, like coffee or bananas.
This argument should resonate with the Republicans. Approximately 34.8 million small and medium-sized businesses create nearly half of all jobs in the U.S., accounting for 70% of new jobs between 2019 and 2024. They represent 98% of all manufacturers and contribute over $278 billion in payroll.
Moreover, small business owners tend to lean toward Republican policies. In the previous election, they favored Trump’s economic strategies over those of Kamala Harris by a significant margin.
Democrats are also aware of this reality. They have already begun to emphasize the hardships that tariffs place on small businesses in their appeals to voters. The FedEx Small Business Trade Index indicates that one-third of all imports and exports derive from small and medium-sized businesses, and two-thirds of their leaders claim imports are vital for domestic operations. Recently, the National Retail Federation highlighted the effects of tariffs on 15.5 million retail workers.
Trump seems to grasp that his critics don’t fully understand this balancing act. The economy thrives on a mixture of tariffs, taxes, incentives, and regulations. Targeted support for small businesses aligns with his overall economic agenda.
This approach complements the Small Business Administration’s Made in America Manufacturing Initiative, which includes substantial tax reforms to help domestic manufacturers deal with red tape and benefit from depreciation and R&D cost write-offs.
There is room for Trump to incorporate small business rebates into major legislation, but quicker exemptions might be more effective, especially given the tight margins many operate on. That’s why Suzanne Clark, the CEO of the Chamber of Commerce, rightly points out the urgent need for immediate relief rather than delayed solutions.
In essence, any rebate, adjustment, or exemption reflects Trump’s responsiveness to market realities. Supporting small businesses can build domestic supply chains and connect policy successes to the ongoing economic growth.
With renewed consumer confidence and updated practices, the economy is on the mend. Careful bailouts for small businesses might just secure additional support for Republicans heading into 2025.
