Small businesses have long been celebrated as the backbone of the US economy, embodying the entrepreneurial spirit and innovation that drive economic growth. For many, the American dream is realized through the hard work and dedication poured into these homegrown enterprises. However, the recent surge in tariffs imposed by the Trump administration has turned the tide against these very businesses, threatening their survival and casting a shadow over the future of American entrepreneurship.

The Impact of Tariffs on Small Business Owners

Katharine Burke spent two years meticulously building her business, Purryfuls, a line of self-care plushies designed to provide comfort to stressed-out Millennials and Gen Zers. The first week of April marked a significant milestone for her company: the start of production. However, this same week also brought a massive blow in the form of tariffs on imported goods from China, where Burke’s products are manufactured. The tariffs, which have escalated to a staggering 145%, have introduced a level of uncertainty and financial strain that Burke never anticipated.

Similarly, Melanie Abrantes, who has been running her handcrafted product design company for 11 years, is grappling with the unpredictable tariff environment. As she orders artisan tools, cork, and other raw materials from Japan and Portugal, she faces sudden price hikes that threaten to derail her business. Despite her efforts to source materials domestically, the reality is that many of these items are simply not available in the US, forcing her to rely on imports.

For Beth Fynbo Benike, the owner of Busy Baby, 2025 was poised to be a year of significant growth. Her baby products company, which she founded in 2017, had secured deals with Walmart and Target, and she had just placed her largest-ever order to replenish inventory. However, the tariffs have turned this milestone into a crisis. The container of goods she ordered, valued at $158,000, now carries an additional $229,100 tariff expense, effectively doubling the cost of her inventory.

The Broader Economic Consequences

The plight of these small businesses is not an isolated phenomenon. The erratic nature of President Trump’s trade policies and the severity of the newly imposed tariffs have had far-reaching consequences. Costs have skyrocketed, supply chains have been disrupted, and growth and expansion plans have been stifled. In many cases, these tariffs are threatening the very survival of American-bred businesses.

Economists warn that the sharp escalation in US tariff rates, the most significant in over 115 years, could lead to a cascade of negative economic consequences. Higher costs, rising inflation, and reduced earnings could lead to a pullback in spending, causing businesses to fail, unemployment to rise, and potentially triggering a recession. Small businesses, which employ nearly half of the American labor force and serve as critical drivers of economic growth, are particularly vulnerable.

Gus Faucher, chief economist at the PNC Financial Services Group, emphasizes that small businesses face the greatest immediate risk from the tariffs. Unlike larger corporations, small businesses typically have minimal wiggle room in their margins and cannot absorb the added costs. Capital is harder to come by, making these businesses more susceptible to external threats. “If you’re Walmart, you may be able to tell your supplier to hold the line on price increases,” Faucher explains. “But if you’re a small business owner, you don’t have that leverage.”

The Human Toll

The personal impact of these tariffs cannot be overstated. For business owners like Benike, the financial strain is compounded by the emotional toll. “I’m fully leveraged against this, and the first thought that came to my head is, ‘I’m going to lose my house. My boys are not going to have a place to live,’” she said. The uncertainty and fear of losing everything they have worked for are palpable among small business owners.

The Future Outlook

Despite the challenges, many small business owners are determined to persevere. Burke, for instance, is moving forward with her production, hoping that the tariffs will change before her products arrive at the Port of Los Angeles. She acknowledges the risks but is unwilling to give up on something she has worked so hard to build. “I’m not ready to give up on something I’ve been working two years on when, who knows, it could change in a couple of hours or a couple of days,” she said.

Abrantes, too, is trying to navigate the uncertainty by expediting orders within the 90-day window provided by the recent tariff pause. However, she remains wary of the unpredictable nature of the tariffs and the potential for further increases. “It’s been so chaotic; it changes every day, and it feels like I can’t really keep up with it,” she said. “So it’s been tough to be able to plan for this.”

For Benike, the situation is dire. She is exploring all options, including shifting her sales to countries outside the US and reaching out to members of Congress to share her plight. She feels abandoned by a government that has prioritized large corporations over small businesses. “We don’t feel supported as small businesses by our government,” she said. “But for me, an Army veteran, a small American business, I’m at risk of going out of business completely because the tariffs are so high that I can’t possibly afford to bring my products into the country to sell them.”

The Need for Support and Stability

The recent tariffs have exposed the fragility of small businesses in the face of unpredictable trade policies. While the intention behind these tariffs may be to protect American industries, the reality is that they are causing significant harm to the very businesses that form the backbone of the US economy. Small business owners, already struggling with limited resources and tight margins, are finding it increasingly difficult to adapt to the rapidly changing economic landscape.

As the US navigates this period of trade uncertainty, it is crucial for policymakers to recognize the importance of small businesses and provide the necessary support to help them survive. Whether through tariff exemptions, financial assistance, or more stable trade policies, the government must take steps to ensure that these businesses can continue to thrive.

The future of the US economy depends on the resilience and success of small businesses. As they face the challenges posed by tariffs and trade wars, it is essential to provide them with the stability and support they need to continue driving economic growth and innovation. The American dream, embodied by these small businesses, must be preserved, not only for the sake of individual entrepreneurs but for the health and prosperity of the entire nation.