By Betsey Piette
April 24, 2025
Demonstrators protest Trump’s tariffs, Miami, April 19, 2025.
When Donald Trump announced massive tariffs on foreign imports April 2, Wall Street investors saw an immediate tumble in stock values. Yet while the focus has been on Wall Street, the long-term impact of the tariffs, especially those levied against China, are being felt on Main Street, as workers face higher prices and mounting layoffs, and small companies, dependent on Chinese imports, are forced to close shop.
Some 33.2 million small businesses contribute 44% percent of the U.S.’s gross domestic product and make up 99.9% of all companies in the U.S. according to the U.S. Chamber of Commerce. Defined as companies that employ fewer than 500 employees each, these businesses employ 61.6 million U.S. workers or 46% of the U.S. workforce. (uschamber.com/small-business/state-of-small-business-now)
These small companies include online Etsy sellers, boutiques, game shops, and hardware stores, textiles and apparel, including bridal gowns and more. About 50% of home furniture imported to the U.S. comes from China. Over 90% of prescriptions for generic drugs in the U.S. are produced overseas, and 80% of the raw material critical for drug production is also sourced overseas.
Around 90% of essential items needed for infant care including bottles, strollers and car seats are produced in Asia, most in China. The toy industry in the U.S. uses China for 80% of its production. Many small companies sell specialty items for children that can only be produced in China, where industries have developed the necessary equipment to produce them. Companies like Baby Paper, whose sensory toys are produced in China, would have to pay an extra $20,000 to cover tariff costs for 2025. (New York Post, April 14)
It would take years for industry to be built in the U.S. to pick up the slack, and these companies cannot afford to wait years. Relocating production outside of China is not a viable option for most of these small companies.
Tariffs threaten to bankrupt small businesses
Ryan Petersen, CEO of Flexport, a global logistics firm, posting on X wrote: “Thousands, and then millions, of American small businesses, including many iconic brands, will go bankrupt this year if the tariff policies on China don’t change.” Petersen warned that the 50% drop in ocean freight bookings from China since Trump announced the tariffs could “potentially wipe out as much as $1 trillion in economic activity if tariffs remain in place for all of 2025.”
A Goldman Sachs report in mid-April estimated that while tariffs could create around 100,000 new manufacturing jobs in the U.S., 500,000 other U.S. jobs will be destroyed in the process. Tariffs implemented during Trump’s first term cost over 245,000 U.S. jobs. An analysis by the Yale Budget Lab estimated that tariffs would result in 740,000 people losing jobs across the U.S. by the end of 2025 as industries are exposed to trade disruptions.
The Trump tariffs are already having a negative impact on the transport of imported goods, including a 50% reduction in oceanic cargo ship bookings. The increased costs from tariffs are already seeing trucking job losses across the shipping industry.
Trump made some concessions to his tech billionaire buddies by granting exemptions from the tariffs for several major technology companies that produce electronic products. These include Apple, which manufactures iPhones, iPads and Macs in China; NVIDIA, a leading chipmaker; Samsung Electronics; and companies involved in semiconductor production. The billionaires can keep raking in profits.
But the smaller companies who can’t afford thousands of dollars in tariffs or pass them on to customers or workers are already paying the price — many have canceled or suspended product orders. The workers employed by these companies and the companies themselves will be casualties of Trump’s tariff war.
