Small businesses are particularly vulnerable to the negative impacts of record-high tariffs. Learn more.
According to the U.S. Chamber of Commerce, more than 97% of U.S. companies that import goods are small businesses, and today, many are struggling as tariffs increase the cost of imported goods. These additional costs were meant to target unfair trade practices abroad, but instead are hurting U.S. small businesses the most. In July, NRF convened a group of nearly 40 retailers from across the country to speak directly with policymakers in Washington, DC., about the negative impacts of tariffs. With higher taxes on imported goods, retailers are facing tough decisions — raise prices, cut back on product assortment or absorb the costs. Here’s what several had to say about how tariffs are affecting their businesses.
Kathy Knack, owner of Kathy Knack Interiors in Norfolk, Va. sources 100% of its products from Vietnam, China and Mexico.
“Owning a small business is not for the faint of heart,” Knack said. “Because of the tariff volatility… 40% one day… 145% the next, my vendors don’t know what their costs will be, so I don’t know what mine will be.”
Tariffs are forcing business owners to quickly and constantly pivot, even when doing so hurts business or cuts into profits. Not only does this uncertainty make it difficult to run a business, but it makes it nearly impossible to plan, price or grow.
Mei-Lon Jimenez and Toni Jimenez, co-founders of Chica Beauty in San Antonio, Texas, echoed these concerns. Although most of their beauty products are made in the U.S., certain components of their business come from overseas.
“The rising costs on components is something we can't source domestically, and it's hit us hard. Every adjustment feels like a moving target. We need stable, predictable trade policies so we can focus on creating jobs and serving our communities," Jimenez said.
The lasting effects of these tariffs are even more concerning, possibly leading to closures. For Sherill Mosee, founder of the Philadelphia-based travel bag company MinkeeBlue, tariffs have been devastating.
“As it stands today, I can no longer afford to stay in business,” Mosee said. “While I dreamed of producing my bags in the U.S., the costs were too high, so I began manufacturing in China in 2013. Since then, tariffs have climbed dramatically. I can’t absorb these costs, and I can’t pass them on to my customers.”
The bottom line? Tariffs are a hidden cost for small businesses, and that cost impacts the communities and customers they serve. Data from the Pew Research Center shows that small businesses make up nearly half of all private-sector jobs in the U.S. — this impact is significant. Small businesses are doing their best to adapt, but they cannot face these challenges alone. Learn more about how tariffs are impacting small businesses on NRF’s Tariffs Threaten the American Dream landing page.
