Small Businesses Continue to Navigate Turbulent Trump Tariffs
With the Trump Administration doubling down on tariffs to achieve its goals of rebuilding the economy and restoring national and economic security, small businesses are finding themselves in the crosshairs. While many small business owners initially welcomed the incoming Trump administration—67% of small business owners surveyed by BizBuySell in the fall of 2024 believed Donald Trump would positively impact the small business sector—many are now feeling the effects of his trade policies. The see-saw nature of tariff policy during the first 100 days has had a ripple effect from Wall Street to Main Street.
What are Tariffs?
Tariffs, also called duties or customs duties, are taxes on goods traded between countries. When goods cross the U.S. border, Customs and Border Protection collects tariffs based on the type of goods, their quantity, and their country of origin.
Companies importing goods from international trade partners pay tariffs within 10 days at the port of entry. These costs are often included in the price of goods and services, indirectly passing the expense on to customers.
In 2024, the United States collected $77 billion in tariffs, accounting for 1.5% of federal revenue. Over half of U.S. trade involves five key countries: Mexico, China, Canada, Germany, and Japan.
Trump Administration Tariff and Trade Policy
During Donald Trump's first administration, he imposed tariffs on long-standing trading partners and campaigned on expanding tariffs if re-elected. While the country anticipated a shift in trade policy, the frequent announcements, rescindments, and postponements have disrupted the status quo. Since President Trump's inauguration, the U.S. stock market has lost approximately $9 trillion in value. In response to stock and bond market volatility, Trump paused tariffs for 90 days for all trading partners except China.
China, the largest importer of goods to the United States, shipped approximately $438 billion worth of goods in 2024. Current trade policy imposes tariffs of up to 245% on Chinese imports, depending on the goods. As the trade war intensifies, small businesses in the U.S. are bearing the brunt of the impact.
Impact on Small Businesses
The BizBuySell Insight Report, which tracks the health of the business-for-sale marketplace, surveyed business owners about issues affecting small businesses. Business owners report significant challenges, with 37% citing increased costs due to higher prices on imported goods and materials. Additionally, 26% experienced reduced profitability in Q1 2025 as rising costs squeezed margins. Many businesses are struggling to absorb these costs, with 27% passing them on to customers.
In early 2025, as the new administration began implementing trade policies, small business owners noticed disruptions to their operations. According to the Insight Report, 17% of respondents reported supply chain disruptions, including difficulty sourcing materials and delays. Some businesses took a proactive approach by stockpiling materials, but those reliant on imported goods or equipment are already feeling the strain.
Consumer spending is also retracting. Nearly 24% of respondents reported decreased sales as customers cut back due to higher prices and economic uncertainty. Pessimism about the economy is reflected in The Conference Board Consumer Confidence Index, which fell by 7.2 points in March.
International business has also been affected. About 9% of business owners reported losing international business due to foreign customers being impacted by tariffs or disruptions in supplier relationships. Industries like tourism and those reliant on foreign-made equipment or materials are particularly vulnerable.
Notably, only 5% of business owners reported positive impacts, such as increased demand for domestic products or services. However, 34% of respondents feel it is too early to assess the full impact of tariffs, and about 20% reported no impact, often because their businesses rely on domestic suppliers or operate in industries not directly affected.
Industry-Specific Challenges to Tariffs
Tariff and trade policy negotiations are having a disparate impact across business sectors:
Agriculture and food sectors are seeing tariffs drive up costs for agricultural products, food ingredients, and equipment, leading to higher prices and reduced profitability for businesses throughout the food supply chain.
Tourism businesses reliant on foreign customers are seeing a downturn in inquiries and bookings in the first quarter of the year, with international travel sentiment affected by both economic concerns and diplomatic tensions.
Construction and Manufacturing companies face rising costs of raw materials and building supplies, creating uncertainty for ongoing and planned projects while increasing final product prices for consumers and business clients alike.
Buyer Sentiment Amid Tariff Uncertainty
While current business owners are adapting to tariff impacts, the BizBuySell Insight Report shows that prospective business buyers are also reassessing their acquisition strategies. The majority of potential buyers remain steady in their timeline, with 60% reporting that the 2025 tariff announcements have no impact on when they plan to buy a business.
However, many in this group note that while their timeline remains unchanged, they are shifting their focus toward recession-resistant or service-based industries less affected by international trade disruptions.
Economic uncertainty has caused 30% of prospective buyers to delay their timeline. These buyers express concerns about how tariffs will impact business costs, supply chains, and consumer spending. Many are adopting a wait-and-see approach before committing to a purchase, especially for businesses reliant on imported materials.
Conversely, 10% of potential buyers have accelerated their timeline, viewing the current situation as an opportunity. These buyers believe some businesses may sell at a discount due to tariff pressures or that certain industries could thrive under the new conditions.
The report reveals a significant shift in focus among buyers, with growing interest in recession-proof, service-based, and essential businesses that are less vulnerable to tariff fluctuations.
Market Outlook
The 2025 tariff announcements are having a mixed but largely negative impact on small businesses. While some remain optimistic or unaffected, uncertainty about the long-term effects of tariffs is a recurring theme, leaving many businesses in a wait-and-see mode.
Many respondents link tariffs to broader economic challenges, such as inflation, recession fears, and reduced consumer confidence. The Conference Board Consumer Confidence Index fell by 7.2 points in March, reflecting growing pessimism. Some worry that tariffs will exacerbate existing issues, making it harder for small businesses to compete and thrive.
For small business owners navigating this uncertain landscape, diversifying supply chains and exploring domestic alternatives may provide some insulation from ongoing trade volatility. Meanwhile, prospective buyers should conduct thorough due diligence on international dependencies when evaluating potential acquisitions in the current climate.