Small Businesses, Big Burden: The Cost of Tariffs

A staggering 97% of U.S. importers are small businesses, so when tariffs rise these companies face steep costs that threaten their survival.

A report released this year by the Department of Commerce highlights the significant role that small businesses play in U.S. international trade, particularly in imports.

By the Numbers:

• Of the 242,515 total importers in the U.S., 97%—or 236,045—are small businesses with fewer than 500 employees.
• These small businesses were responsible for a third of the total value of goods imported.
• Many of these small businesses are very small operations, with nearly half (116,651) employing fewer than 50 people.
• Close to 40,000 are small manufacturers, and many of them depend on a specific part to complete their manufacturing process that simply isn’t made domestically.

While the report underscores the significant role small businesses play in the U.S. import landscape, it also brings attention to the growing challenges these businesses face, particularly when it comes to tariffs. Tariffs have a direct impact on the cost of goods coming into the U.S., and for small businesses, these added expenses can create substantial hurdles.

For many small business importers, even a small increase in tariffs can have a profound effect on their bottom line. These businesses typically operate with tight profit margins and limited financial flexibility. As a result, tariff increases can force them to either raise prices on consumers, absorb the additional costs and reduce their profits, or even cut back on inventory or operations.

MORE:​ U.S. Chamber to Administration: Small Businesses Need Immediate Relief from Tariffs

Small manufacturers often face the brunt of tariff impacts. Many of them rely on specific parts or components from abroad to assemble their finished goods domestically. If tariffs are imposed on these parts, the cost of manufacturing increases, which can undermine their competitive advantage—especially when competing with larger businesses that have more resources to offset these costs.

Some states stand to be hit harder than others. Tariffs result in higher costs, tighter margins, and tougher times for America’s small businesses.

Breakdown by State

* Includes small and large importers. Details do not sum to total because companies may import to more than one state.

**State values estimated by applying the overall portion of small business imports to total imports nationally (0.31655) to each state’s total value of known imports.

Where Small Businesses Import From

* Details do not sum to total because companies may import to more than one state.

About the author

Neil Bradley

Neil Bradley is executive vice president, chief policy officer, and head of strategic advocacy at the U.S. Chamber of Commerce. He has spent two decades working directly with congressional committee chairpersons and other high-ranking policymakers to achieve solutions.

Read more