Small business owners across the U.S. are feeling the squeeze from new tariffs that are driving up costs on nearly all imports. Take Sarah Wells, who runs a business selling products for new mothers. This year alone, she faced two rounds of tariffs just as her shipment from China arrived, costing her an extra $15,000 to bring her goods home.
With total tariffs on Chinese imports climbing to 54%, Wells is worried. She knows she might have to raise prices, but she wonders how much her customers will tolerate before they stop buying. To cope, she’s considering scaling back—ordering less, halting hiring, and putting new product development on hold. “Businesses will close if this continues,” she says.
Retail sales for 2023 were expected to grow, according to the National Retail Federation, but this forecast came before the current tariff impacts were clear. Now, the organization admits it’s tough to predict how this will affect consumer spending.
While large retailers like Walmart may negotiate discounts from suppliers, smaller shops don’t have that leverage. Many owners worry they’ll need to raise prices, and this anxiety has left them in survival mode. For most, it’s about determining what’s essential versus what’s merely nice to have, according to Jessica Bettencourt of Klem’s General Store.
One argument for tariffs has been that they encourage domestic manufacturing. Yet, for many business owners, this has been easier said than done. Wells looked into making her products in the U.S., but local manufacturers often struggled with the scale she needed or required materials that still came from abroad. Rozalynn Goodwin, who runs a hair accessory business, faced similar challenges. She was told that U.S.-made products would cost three to four times more, which she knew her customers wouldn’t accept.
The consequences extend beyond individual businesses. For many everyday items like clothing or electronics, U.S. manufacturing is not just scarce; it’s often unfeasible due to high costs. Bettencourt highlighted this point with a comparison of work boots: the American-made versions sold for $400, while their imported counterparts went for only half that price.
In short, small business owners like Wells and Bettencourt want to be in control of their choices. However, the new tariffs are stripping away that power, leaving them uncertain about the future. The ripple effects of these trade policies are deep and far-reaching, affecting not just individual shops, but the wider economy.
For a detailed statistical overview on the impacts of tariffs on retail, check the National Retail Federation’s analysis here.
Check out this related article: European Stocks Plummet 6% at Opening Amid Escalating Global Tariff Crisis: What You Need to Know
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