How can that be? Joe Biden has left the White House.
- CNBC interviewed nearly a dozen small business owners to get a better understanding of how much tariffs are costing them and the impact the duties are having on their strategy and operations.
- Many of the small businesses said they’ve been forced to freeze hiring, pull back growth plans, take on new financing or cut salaries to keep operations afloat.
- “It’s to the point now where it could kill us, it could take us down, and I could lose everything. … Being a small business owner isn’t worth it when your country turns on you,” said Jared Hendricks, the CEO of Village Lighting, a small business selling Christmas products.
One story:
Viresh Varma can’t sleep.
The CEO of AV Universal Corp., a small footwear company that sells through retailers like Macy’s, Nordstrom and DSW, said he needed to take out a $250,000 loan to pay his tariff bill on a container of shoes he imported from India for the holiday shopping season.
Varma didn’t have the cash on hand to pay the duties, which he said used to be around $7,500 for a similar-sized container before President Donald Trump’s new tariffs. But without the financing, he wouldn’t have anything to sell during the holidays
He took the loan which has very onerous terms requiring him to raise prices. It will probably bankrupt him. What choice did he have?
Often called the backbone of the U.S. economy, small businesses routinely represent more than 40% of the nation’s GDP and employ nearly half of the American workforce, according to the U.S. Chamber of Commerce.
Trump says his tariffs allow the U.S. to reduce its trade deficits with other nations and encourage domestic manufacturing, but some of the small business owners who spoke to CNBC said that’s happening partially at their expense.
The struggles they’re facing could be a warning sign for the rest of the economy and bigger businesses in 2026, said Kent Smetters, a professor of business economics and public policy at the University of Pennsylvania’s Wharton School.
“The small businesses … they’re kind of like the canary in the coal mine here,” said Smetters, the faculty director of the Penn Wharton Budget Model. “They’re going to get hit first, and then I think you’re going to see more of an impact with some delay on larger businesses.”
Larger retailers have been able to manage higher tariff costs in part because they had the foresight and ability to order extra inventory before the new duties went into effect, said Smetters. At a certain point, that stock will run out and push costs higher, and those companies only have so many low-tariff countries where they can produce goods.
It’s working out great.
Trump is saying that prices have come down on everything and that we now have $2.00 a gallon gas. His cult will always believe him over their lyin’ eyes. But how about the rest of us? When is reality going to hit the 70% who aren’t Trump lovers?