If you’re like many US-based startup founders and small business owners recently, you’ve been wondering what the latest tariff policies mean for you. Will they impact your bottom line? Cause you to raise prices? Suppress customer demand in the short term?
There has been much chatter surrounding the Trump administration’s sweeping new tariffs. However, we’re here to provide some helpful guidance and clarification regarding what the latest tariffs mean, how they might impact your business, and what you can do to navigate them.
While the economic landscape remains volatile, it’s important for startups and small and medium-sized businesses (SMBs) to stay informed so they can respond proactively to newly imposed tariffs.
Import tariffs are a tax imposed on imported goods, typically on those originating from a certain country or pertaining to a certain industry. Tariffs may also be levied on exported goods as well.
Federal governments may impose import tariffs for a number of reasons, including to protect domestic industries and production, generate revenue, or as a strategic negotiating tool for international trade relations. They are often imposed as part of a protectionist trade policy.
In the case of the latest imports levied by the Trump administration, the purpose is “... to strengthen the international economic position of the United States and protect American workers,” per The White House.
In other words, the goal is to discourage foreign imports by making it more expensive, leading US businesses to turn to domestic suppliers instead.
Throughout his campaign for the 2024 election, President Trump was a vocal proponent of levying import tariffs as a way to balance trade and revitalize the American manufacturing industry.
Since the start of his second term, President Trump has made good on this campaign promise, recently announcing a 10% tariff on all countries, which took effect on April 5, 2025.
In addition, The White House announced that President Trump will levy individualized reciprocal higher tariffs on the countries found to have the largest trade deficits with the United States, set to take effect on Wednesday, April 9, 2025, at 12:01 a.m. EDT.
As of the time of writing, Chinese imports, specifically, are set to face an additional 104% levy on top of the average tariff rate of 20.8% from the Biden administration. Thus, starting Wednesday, tariffs on imported Chinese goods will be nearly 125%.
CNN reports that China was the second-largest source of imported goods to the United States last year, worth a total of $439 billion. In exchange, the United States exported only $144 billion worth of goods to the Asian country.
Depending on the country, other individualized tariffs range from 11% to 50%. The higher tariffs are expected to stay in place until “... President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated,” says The White House.
Certain sectors of the economy are more exposed to the new tariffs than others. Here’s a closer look at some of the industries that are expected to face the greatest impact.
Manufacturing businesses that rely on imported raw materials and components may face higher import costs, which could result in higher production expenses.
Domestic suppliers may benefit from reduced foreign competition. However, the shift to domestic manufacturing will not occur overnight, and there may be supply chain disruptions in the meantime as companies need to adjust their sourcing strategies.
The tech sector is notoriously dependent on a global supply chain and will undeniably be impacted by new sweeping tariffs.
Tech companies that develop and sell hardware will be the most impacted, as higher component costs could affect production. On the other hand, software-as-a-service (SaaS) businesses are not as directly affected, though they may face higher costs from any goods or supplies they do source internationally to support operations.
Businesses in the retail sector that already operate on slim margins may be the most susceptible to increased tariffs on imported goods. As such, these domestic companies may decide to raise prices and pass on the increased costs to consumers in order to stay afloat.
The impact of these tariffs has already affected domestic apparel companies. For instance, Nike stock has decreased by over 30% in the past month, owing to its exposure to the high tariffs levied on Asian countries, where it primarily produces its footwear.
Aside from apparel, CNBC reports that other retail products like furniture, toys, beer, and liquor that are sourced internationally could also see price increases over the coming weeks.
One sector that is less susceptible to incoming tariffs is service-based businesses. This includes CPA firms, law firms, or marketing agencies. Since these companies don’t carry inventory or source large amounts of goods, they tend to have less of a direct impact.
However, it is possible that these companies will feel secondary effects as clients in goods-based industries adjust their spending. For example, a creative agency that offers design services to e-commerce clients may see spending decline in the near term as these businesses face higher import costs.
Any businesses in the US that rely on imported goods will likely feel the impacts of Trump’s global tariffs. However, it’s possible that the tariffs will have a disproportionate impact on small businesses.
These companies may already run on thinner margins and have smaller cash reserves than large corporations, giving them less leeway when it comes to increased inventory and input costs. As a result, they may be more compelled to increase the prices of their products and pass on the increased costs to consumers rather than absorbing them.
Additionally, large businesses may have more resources and a wider network to quickly pivot sourcing to more favorable countries of origin. It can be more cumbersome for small businesses to go through the capital-intensive process of finding and initiating contracts with alternative suppliers.
Need help determining your business’s exposure to new global tariffs? Here are some steps you can take for a quick assessment:
Businesses don’t have to sit and wait to see how these new tariffs will impact their suppliers and their own operations. Here are three strategies that teams can adopt to remain proactive in the ongoing macroeconomic conditions:
Businesses that expect to be impacted by tariffs should first look to see if there are domestic alternatives to the goods they typically import. If so, it’s likely that the domestic goods are more expensive than internationally-sourced goods; however, it will help them avoid the increased importing costs.
With this in mind, it still may be cheaper to import these goods, but finding suppliers in countries with more favorable tariffs.
Some companies will decide to make strategic price increases on their products and pass on the increased costs to consumers directly. This strategy helps companies preserve their margins.
However, it’s possible that large cost increases may influence customer demand, thereby affecting the company’s financial results. Thus, it may benefit businesses to communicate large or abrupt pricing changes clearly with consumers.
For example, customers of American activewear brand Fabletics are already reporting seeing a “tariff surcharge” listed at checkout.
Where possible, some companies may be able to adjust their business model, shifting toward a more service-based business rather than one that relies heavily on product sales that are subject to increased tariffs.
This may not be an option for all businesses, though it can be a lucrative strategy for some. For instance, a specialty furniture retailer may shift to offering more interior design consulting services while import costs remain elevated to offset increased expenses.
The new tariffs levied by the Trump administration have created a good amount of uncertainty for the global economy, impacting both multinational retailers and local small businesses in tangible ways.
However, these tariffs don’t have to be seen only as business-ending hurdles. They also give companies an opportunity to re-evaluate their supply chains and innovate their offerings to become more resilient.
Teams of all sizes should take the time to assess their exposure to higher tariffs and engage in proactive strategies to remain competitive.
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