Small Businesses Grapple with Tariff-Induced Challenges Amidst Economic Uncertainty

28 May 2025

Small businesses across the United States are facing mounting challenges due to the Trump administration's recent imposition of steep tariffs on Chinese imports. These tariffs, which reached as high as 145% before a temporary reduction to 30%, have led to increased operational costs, supply chain disruptions, and financial strain for many enterprises.

In New York's Chinatown, local businesses are particularly affected. Cory Ng, co-owner of two Cantonese-American restaurants, expressed concerns about the neighborhood's future, stating that the tariffs have significantly increased the cost of essential ingredients and supplies. Similarly, Jason Liu of Soft Swerve, an ice cream shop, highlighted the uncertainty surrounding future pricing and sourcing of ingredients, many of which are imported from Asia.

The impact extends beyond Chinatown. Molly Moon's Homemade Ice Cream in Seattle, which sources 90% of its ingredients domestically, still relies on imported items like chocolate and vanilla. Owner Molly Moon projects a 50% hit to profits due to existing tariffs and fears complete unprofitability if additional tariffs take effect.

Retailers are also feeling the pressure. A spreadsheet circulated in Congress by the Footwear Distributors and Retailers of America illustrates how tariffs could increase the price of children's shoes from $19 to $24 per pair, forcing retailers to choose between raising prices or facing financial hardship.

Despite these challenges, some businesses remain optimistic. A recent HSBC Trade Pulse survey revealed that over 70% of U.S. small and mid-sized businesses have experienced increased operational costs due to tariffs. However, nearly all surveyed firms remain optimistic about international growth prospects in the coming years.

As small businesses navigate these turbulent times, many are calling for clearer policies and support to mitigate the adverse effects of tariffs. The long-term impact on the small business sector remains to be seen, but the current climate underscores the need for adaptability and resilience in the face of economic uncertainty.