New Tariffs Will Put Small Businesses at a Competitive Disadvantage

“New tariffs on Canadian and Mexican imports will put small businesses and family farmers at a competitive disadvantage. We’ve heard from a number of small business owners who said that any cost increases can be devastating for businesses already operating on thin margins. And large tariffs like 25% would mean most small businesses have no choice but to pass their costs on to customers. Larger businesses, however, are more likely to have flexibility to absorb increased overhead, keeping prices lower and undercutting their smaller competition. At a time when inflation was already spiking, even consumers who may prefer to shop small are more likely to buy big if there is a significant price difference for similar products. We’ve also heard from small business owners who would be happy to purchase products made in the United States if they could; the reality is that they simply cannot either because those products are too expensive or because the industries that supply what they need relocated offshore decades ago.

Given these problems, it’s no surprise that Small Business Majority’s research found 53% of small businesses are concerned about tariffs negatively impacting their business and 77% are concerned about announced tariffs negatively impacting the U.S. economy as a whole. 

The Trump administration’s plan to solve most of our nation’s financial and foreign policy challenges with tariffs is deeply flawed in part because tariffs are going to have dire consequences for small firms as varied as home builders and ice cream shops. Farmers will be hit particularly hard, as they’ve been suffering since the start of this administration from retaliatory tariffs, funding freezes and the loss of USAID contracts.  Whatever the administration’s goals may be, they must pursue policies that do not come at the expense of America’s entrepreneurs.”