Main Street Responds to Tariff Pressure With Pricing and Supply Shifts
BizBuySell’s latest Insight Report reveals how Main Street businesses are navigating a complex economic environment. In Q2, 2,342 businesses changed hands — a 4% decline year over year and 1% dip from Q1 — as buyers paused to assess new tariffs and changes in SBA financing. Service-based and recession-resistant businesses continued to attract interest, while acquisition activity in manufacturing and restaurants — sectors more exposed to tariff -- softened.
August brought renewed tariff headlines and a 90-day extension on China trade talks, keeping current rates in place. With the holiday season approaching, many business owners are facing rising costs and responding by adjusting order cycles and increasing prices. Consumers are beginning to feel the impact, shifting spending habits in response to higher prices.
Small businesses make up 99.9% of U.S. enterprises and are often the first to feel the effects of macroeconomic shifts. From inflation and labor challenges to tariff uncertainty, Main Street is adapting to an unpredictable economy.
Survey responses from BizBuySell’s Insight Report underscore this mixed picture. Owners reliant on imports report tighter margins and rising costs, while demand remains steady in service sectors. Across industries – from retail and service to manufacturing and restaurant sectors — the common strategy is to stay nimble and keep options open.
Current Economic Landscape
While the broader economy appears stable, July’s data presents a mixed picture. Inflation held steady, with the Consumer Price Index at 2.7% and core inflation (excluding food and energy) at 3.1%. However, wholesale prices jumped, as the Producer Price Index posted its largest monthly gain since 2022. Small business owners are watching closely to see how much of that pressure will reach consumers.
Labor market signals also shifted. The Bureau of Labor Statistics revised May and June job gains downward, overshadowing a modest uptick in July’s unemployment rate. small business hiring sentiment cooled over the second quarter.
Tariffs have yet to fully impact consumer prices, as business owners continue to adapt to policy changes. Some have mitigated the effects by ordering early or diversifying supply chains. This summer introduced new reciprocal tariff rates: Switzerland now faces a 39% levy on many goods, while Brazil faces effective tariffs of up to 50% on applicable items. As trading negotiations continue, Main Street businesses are adjusting order timing, pricing strategies, and supplier relationships to manage the uncertainty.
Tariff Troubles for Main Street
As macroeconomic indicators continues to send mixed signals, small business owners spent Q2 2025 navigating an evolving tariff landscape. According to BizBuySell’s Insight Report, 54.2% of surveyed owners said tariffs have not increased their business expenses, and 72.2% reported no supply chain disruptions. Only 16.4% have changes suppliers or sourcing strategies due to tariff-related pressures.
Despite these challenges, Main Street businesses are demonstrating resilience and resourcefulness. Among the 45.8% of owners experiencing increased expenses, 65.3% have adjusted their pricing strategies. Some have added a line-item charge for tariffs, while others are gradually raising prices based on customer tolerance. A few are holding off on increases until later in the year.
Customer response has been largely positive. Just under one-third of business owners report any negative reaction to price changes, while 63.9% say customers are accepting the adjustments. In luxury markets, higher prices are not deterring demand, and many customers – especially those attuned to current economic conditions – understand the rationale behind the increases.
Consumer Behavior
BizBuySell asked small business owners whether they’ve observed changes in customer behavior due to current economic conditions. Nearly two-thirds (67.6%) report that customer behavior is shifting. Many note increased hesitation among buyers as new policies are implemented, with overall spending declining. Some businesses report stable dollar values but lower transaction volumes few goods sold, but higher-priced items are still moving. Others observe that consumers are becoming less willing to spend on nonessentials.
One business owner highlighted the impact of the Trump administration’s grant and government contract policies: “Nongovernment clients are much more hesitant to invest in their businesses by hiring us; government clients are hesitant to hire us for anything in case the contract is canceled by the federal government (which has happened to us twice), or may be seen as infringing on the anti-DEI executive orders.”
Among the behavioral shifts reported, caution in spending leads the way (74.4%), followed by reduced purchase frequency (50.4%), opting for cheaper alternatives (49.8%), and increased demand for discounts (34.7%).
Main Street businesses face tough decisions ahead. As tariff-related costs rise, owners are weighing whether to raise prices or scale back investment. Many are choosing to adapt – adjusting pricing strategies, rethinking supply chains, and staying responsive to shifting consumer behavior. While the economic landscape remains uncertain, small businesses continue to demonstrate resilience, resourcefulness and a commitment to their communities.