#United States #New York #Small Businesses #Tariffs #Trade Policy

Small Businesses Struggling Under Tariffs

As discussions about tariffs intensify, a recent survey from Savanta sheds light on the frustration and challenges faced by small business owners (SBOs) in the United States. While the broader economic and political implications are frequently examined, the direct impacts on small enterprises are often overlooked. Nearly half of SBOs have felt the pinch of tariffs in practical terms, as rising costs, supply chain disruptions, and the need to make tough pricing decisions weigh heavily on their operations.

The Current State of Small Businesses

A striking 42% of surveyed SBOs indicated that recent or potential tariff policies have adversely affected their businesses. The primary issues they face include increased costs for products and materials (41%) and significant supply chain disruptions (24%). This reveals that the effects of tariffs extend beyond financial strains; they also disrupt everyday operational processes for these businesses.

Moreover, many SBOs feel disconnected from the policy-making process, with a staggering 57% expressing the belief that trade decisions are not made with their interests in mind. Kyle Gollins, Head of Commercial at Savanta, emphasizes the quiet struggle of these businesses: “They are absorbing costs, raising prices, and making adjustments to remain competitive in a challenging environment.”

Adjustments in Response to Tariffs

In light of these pressures, nearly half (47%) of SBOs have implemented or are planning changes within their business operations. Among these adjustments, 58% report having raised prices, while others are reconsidering their sourcing methods, opting to delay investments, or absorbing costs themselves. Notably, while reshoring has been a topic of political discussion, only 21% are considering moving operations back to the U.S. due to tariffs, with 34% stating they have not thought about any such shift.

The decision on how to handle increased costs is complex. While 18% of SBOs are passing on tariff-related price hikes entirely to customers, 47% are either passing costs partially or not at all. Among those who are absorbing the costs, over half (51%) admit they can only maintain this for a year or less, highlighting the unsustainable nature of their current strategies.

Trade Policy Confidence Lacking

Confidence in trade policy is notably low among small business owners, with only 26% reporting high confidence in the U.S. government’s handling of tariffs. In contrast, 33% voiced low confidence in trade policy decisions. This divide appears to be politically motivated, with a significant percentage of Democrats (52%) expressing skepticism compared to just 14% of Republicans.

The perceptions surrounding tariffs are mixed. While some SBOs (35%) argue that tariffs disadvantage their operations, a smaller group (21%) believes they provide some competitive edge. Looking ahead, 36% anticipate negative impacts from tariffs over the next year, and 23% foresee potential benefits.

Key Concerns for the Future

When asked about their top worries regarding tariffs and trade policy, SBOs predominantly cite rising material costs (51%), followed by unpredictable policy changes (39%), long-term competitiveness (31%), and strained global supply access (25%). These concerns underscore the pressing need for a more responsive and inclusive policy approach that takes into consideration the realities faced by small businesses.

Conclusion

Overall, the situation for small businesses amidst these tariff discussions is dire. A significant portion of SBOs feels their voices are not part of the larger conversation, while daily challenges continue to mount due to financial pressures and operational disruptions. As the landscape evolves, it remains to be seen how these businesses will adapt and what changes might lead to a more favorable environment for their growth and sustainability.