Two-Thirds of Small Business Owners Say Tariffs Will Hurt Their Company

Small businesses are reportedly likely to suffer the biggest impact from new U.S. tariffs.

Small and medium-sized businesses (SMBs), which account for one-third of imports to the U.S., don’t have the resources of larger companies to deal with higher prices and other disruptions, The Wall Street Journal (WSJ) reported Friday (April 11).

Nearly two-thirds of small businesses surveyed in March said that tariffs and other trade issues would hurt their company, the report said, citing a survey conducted for the WSJ by Vistage Worldwide.

Among small business owners interviewed for the Friday WSJ report, one said he would not open his seasonal fireworks store until the trade war is sorted out, another said he is not likely to have the cash to cover the tariffs on orders of apparel that are due to arrive in mid-August, and a third said he will have to increase the price of his company’s backpacks from $155 to $210 to stay profitable.

The challenges small businesses face when managing the impacts of tariffs include slowing sales, higher prices for raw materials, limited leverage to negotiate with suppliers, a lack of adequate working capital and uncertainty about how to set prices when tariffs are constantly changing, according to the report.

They must also deal with difficulties finding U.S. suppliers for goods they currently import, and a disadvantage compared to larger companies when trying to buy the U.S. goods that are available, per the report.

Nearly 1 in 5 SMBs are pessimistic about their odds of survival over the next five years, according to the PYMNTS Intelligence report, “Brewing Storm: Why 1 in 5 Smaller Businesses Without Financing Fear They May Not Survive Tariffs.”

The report found that 6.9% of all SMBs — and 13% of SMBs without access to financing — said they were unlikely to survive the next two years.

The SMBs were surveyed between Feb. 5 and Feb. 12, when the White House had announced tariffs against Canada, China and Mexico but before many countries announced retaliatory levies and a global trade war unfolded.

The tariffs arrived at a time when small businesses were already facing stalled funding, job cuts at federal agencies and a crackdown on immigration, The New York Times reported Sunday (April 6).

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