As of April 2025, newly announced tariffs from President Donald Trump’s campaign have small business owners on high alert. These sweeping trade policies (starting at 10% for all imports and rising to as much as 145% for Chinese goods) are already sending ripple effects through key industries.
Whether you sell cookies, clothing, or furniture, you might soon find yourself paying significantly more to do business. This article breaks down how tariffs work, which sectors are most vulnerable, and what small business owners can do now to prepare.
Last updated: April 14, 2025
Too Long, Didn’t Read (TL;DR)
- Trump’s 2025 tariff plan imposes a 10% base tariff on all imports and up to 145% on Chinese goods
- Small businesses are already seeing dramatic increases in raw material and product costs
- Toy, home goods, fashion, and food industries are among the hardest hit
- Experts warn of reduced wages, lower GDP, and long-term economic strain
- Owners are scrambling to adapt but may not survive another cost surge
How Do Tariffs Work?
Tariffs are essentially taxes on imported goods. When a product is brought into the U.S. from another country, the government may impose a fee (a tariff), which increases the total cost of that product. The goal is to make foreign goods less attractive compared to American-made alternatives.
However, when companies rely on international supply chains (like many small businesses do) they either have to eat the added costs or pass them on to consumers. That’s where things get tricky.
Trump’s 2025 plan imposes:
- A 10% baseline tariff on all imports
- 60%+ tariffs on Chinese goods, climbing up to 145% on certain items
How Will Tariffs Affect Small Businesses?
Small businesses tend to lack the buying power and financial cushion of big corporations, making them especially vulnerable.
Take Beth Pratt, who owns a cookie company in Denver. Egg prices have jumped from under $100 to $145 per case. Chocolate? Up 60% since December. And now, packaging costs may soar too.
Key Impacts on Small Businesses:
- Sharp increases in raw material and product costs
- Limited options for domestic alternatives
- Reduced profit margins or higher consumer prices
- Risk of layoffs or total shutdown
- Long-term damage to competitiveness
What Industries Will Be Most Affected by Tariffs?
Some industries are disproportionately exposed to global supply chains and therefore face more risk under the new tariffs.
Especially vulnerable:
- Toys: 80% of products come from China
- Fashion & Beauty: projected 35% increase in clothing costs, 20% for cosmetics
- Specialty Food & Beverage: packaging and ingredients are often imported
Several companies in these industries are already facing tough choices – cut staff, sell at a loss, or close up shop altogether.
The Bigger Picture: What’s at Stake?
According to the Penn Wharton Budget Model, the long-term impact of these tariffs could be:
- 8% drop in GDP
- 7% decrease in wages
- $58,000 lifetime loss for the average middle-income household
Economists warn of a return to stagflation – low growth paired with high prices. The message to small business owners? Adapt now, or risk being swept away by the wave.
Final Thoughts
If you’re a small business owner, the time to assess your supply chain, pricing model, and customer communication strategy is now. These tariffs may not go away soon, and the businesses that survive will be the ones who pivot early.
Want help navigating the storm? Our team is here to support small businesses with financial strategy and creative solutions. Let’s talk.
