Tariff Impact on Small Business Across America Means Billions in Tax

August 12, 2025  by Karen Parrish in Business Strategy, Industry   

According to the U.S. Chamber of Commerce website, many of these small businesses are dealing with cancelled bookings, rising costs, stockpiling supplies, and the decision to pass the cost of the tariffs onto their customers.

According to Marla Showfer (as quoted on the U.S. Chamber of Commerce article), owner and founder of The Winding Road in Geneva Illinois, "We are running out of inventory, [because] there has been so much uncertainty about what tariffs we will have to pay when our goods land in the U.S. ... I held off on ordering ... and missed the entire late summer selling season. We are marking items out of stock daily, [and] it’s hitting our bottom line.”

The problems go on for businesses like The Winding Road across America. There is story upon story of the struggles the levied tariffs have had. Some are struggling and others have already been forced to close because of the rising costs and the inability to switch suppliers quickly to avoid staying competitive or passing their costs onto the consumer.

Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce reported on a survey that the Census Bureau conducted of approximately 200,000 American businesses. The survey is carried out to  continually gauge conditions from the prior period (two weeks) to expectations about the future. The report on July 31 showed a clear pattern for the businesses surveyed.

“Manufacturers, wholesalers, and retailers  increasingly report paying higher prices for the goods and services they buy.”

“Initially, companies try to absorb the cost increases through lower margins and reduction in other expenditures — particularly if the price spike is temporary (as some tariffs have proven to be; Over time, however, the price increases are passed onto retailers and ultimately to consumers.”

The most recent Census Bureau report records just over 236,000 small business importers (those businesses with less than 500 employees). Collectively, these businesses imported over $868 billion worth of goods in 2023 (the most recent year that data is available).

The Chamber estimated the tariff impact on these businesses by applying the country-level tariffs announced on July 31 to the known level of small business imports. Based on those numbers, it is estimated that these businesses will face a $202 billion annual tariff tax.

The choice for many is to either pass the costs onto their consumers to remain competitive or shutter their business because the cost is too high. The “One Big Beautiful Bill Act” provides relief for small businesses, but will it be enough to save those who are struggling with the pressure and strain the tariffs have put on them.