President Donald Trump’s tariffs are continuing to create significant challenges for various small businesses in the U.S.
In February, Trump implemented new 10% global tariffs after the Supreme Court ruled against the International Emergency Economic Powers Act’s use to impose tariffs. Small business owners have expressed concerns over rising costs, heightened uncertainty, and a lack of domestic alternatives for certain affected products due to these tariffs.
Justin Hartenstein, founder and chief innovation officer of ORACLE Lighting, pointed out that not all sectors possess the domestic supply chains needed to sidestep these tariffs.
“For small U.S. manufacturers, tariffs can serve as a powerful policy tool, but it’s also a blunt instrument,” Hartenstein shared. “On one hand, they can equalize competition when foreign manufacturers are favored by governmental subsidies and regulations that hinder U.S. companies. If used properly, tariffs could prompt companies to return production to the U.S. and invest in local facilities and workforce.”
However, he further elaborated that many small manufacturers struggle because the necessary supply chains for fully manufacturing their products within the U.S. aren’t established in various sectors. “Take the automotive lighting industry, for instance—environmental and regulatory hurdles complicate sourcing pivotal components like printed circuit boards and semiconductors domestically,” he explained.
Hartenstein noted that small manufacturing firms often find themselves importing parts while they design, test, and develop their products domestically, which inevitably inflates their costs just to remain operational.
Likewise, Brian Wilson, CEO of CenterForce Clutches, mentioned that his company lacks domestic alternatives to offset the impacts of the tariffs, which have sharply increased their expenses.
“As a small business with just 25 employees, our cost margins are tightening,” Wilson stated, highlighting that many components his business relies on, such as clutch assemblies, have not been manufactured in the U.S. for close to two decades. Therefore, there are virtually no alternative domestic sources available to consider switching to.”
“We source American steel, yet we’ve noticed domestic suppliers increasing prices at nearly the same rate as the tariffs themselves,” he added. “Once our local suppliers adjust their prices due to tariffs, the supposed protection these tariffs provide to small manufacturers diminishes and only serves to elevate costs overall.”
Wilson believes that while he comprehends the strategic rationale behind tariffs, their effectiveness hinges on whether the products can genuinely be produced domestically. “It’s crucial to evaluate if production capacity is genuinely available within the U.S. before rolling out broad tariffs. If such capacity doesn’t exist, small businesses will shoulder the costs without reaping competitive benefits.”
He remains cautiously optimistic, believing conditions will settle in the long run but anticipates substantial volatility over the upcoming year.
Meanwhile, White House Press Secretary Taylor Rogers emphasized that Trump is committed to revitalizing small businesses through America First policies. “Similar to his initial term, Trump aims to restore prosperity to Main Street,” Rogers remarked.
She also highlighted legislative moves like reductions in regulations and energy costs, along with the largest tax cut for working families, which was aimed at fostering substantial growth for small businesses through a permanent 20% tax credit and full capital expenditure expenses.
Leonard Beatty, owner of Kick Start Martial Arts in Atlanta, underscored the additional uncertainty faced by small business owners from tariffs and rising shipping costs. “The toughest challenge is the unpredictability surrounding tariffs. It was hard to keep up. It felt like there was something new every other week, making long-term planning virtually impossible,” Beatty said.
“When companies offshore manufacturing and import goods back home, they bear the tax burdens—not other countries. It’s bewildering for small businesses,” he added, noting significant increases in shipping costs from about $12 to nearly $30, which ultimately get passed onto consumers. “Those who argue that other nations cover these tariffs are, I think, being intellectually dishonest.”
Compounding issues, frequent changes to customs policies have rendered it increasingly tough for business owners to strategize, invest, and create new job opportunities. An analysis from UC San Diego highlighted these complications.
According to a report from the Specialty Equipment Marketing Association (SEMA) obtained by DCNF, a notable percentage of U.S. manufacturers view tariffs and trade policies as the greatest threats to their industry, followed closely by fears of economic decline.
The White House persisted in asserting the effectiveness of tariffs, stating that they have led to historic trade agreements that benefit U.S. exports and support domestic manufacturing.
Additions to the tariffs include plans for a duty refund portal for businesses affected by these policies, as reported by various sources.
Alfredo Ortiz, CEO of Job Creators Network, asserted his belief that Trump’s tariffs have successfully met their intended goals. “These policies have sparked trillions in investments domestically and broadened markets through favorable trade agreements,” he said. “The Supreme Court has afforded small businesses the certainty they desperately need. Trump’s temporary implementation of a flat 10% tariff, although lower, is still manageable for them.”
