In April 2025, President Donald Trump announced the sweeping "Liberation Day" tariffs, asserting they would benefit American small businesses. Speaking to the National Republican Congressional Committee, Trump said, "I'm proud to be the president for the workers, not the outsourcers—the president who stands up for Main Street, not Wall Street."

However, a recent report from the Federal Reserve of New York, based on the 2025 Small Business Credit Survey, paints a contrasting picture. It found that small businesses were "particularly challenged by higher tariffs in 2025." Most small businesses responded to increased costs by raising prices for consumers. The report also noted that smaller, less profitable firms with fewer resources were less able to mitigate these costs compared to larger firms, which may use legal means and maintain price markups more effectively.

Looking forward, small business owners expressed "greater pessimism about generating employment and revenues in 2026" due to the tariffs. While few small businesses export products, 90 percent of manufacturers import some goods, making them vulnerable to tariff impacts.

The administration has also faced difficulties after the Supreme Court struck down Trump's "emergency" tariffs in February 2026, complicating refund processes for businesses.

Shirley Modlin, co-owner of a Virginia-based 3-D printing business, told the committee, "As a result of this upheaval which has created such uncertainty, our employees are suffering from stagnant wages and the possibility of loss of benefits."

A separate Federal Reserve analysis warns that nearly half of firms that have paid tariffs still plan additional price increases to offset costs, with some expecting to raise prices for six months or more.

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