Tariff introduction can have a devastating impact on a small business already on precarious footing. At the beginning of April 2025, Donald Trump’s administration raised tariffs on Chinese imports. The level was increased to 145%. This decision has had stressful effects on small businesses. Larger businesses may have more leeway and financial reserves. Therefore, they may be less vulnerable to the effects of this change than smaller businesses are.
Small enterprises can face worrying situations related to the Trump administration’s decision. The Paper & Pencil stationery shop in Chicago once paid $200 for fees and tariffs. This total cost recently went up to $1,400. In particular, small companies importing goods from China have been affected. For instance, WS Game Co. imports from China games produced there. Also, home decorating company House imports artificial flowers from China for flower arrangements. Both WS Game Co. and House have tariff-related worries.
Stationer in Chicago Faces Cost Increase
Paper & Pencil is a stationery shop located in Chicago’s Andersonville neighborhood. Tyler McCall is a co-owner of this business. The stationery store sells imported products. Buying these products to sell now costs more. McCall describes paying “about $200 in tariffs and related fees” before the new initiative. This overall cost has increased to $1,400. The products had already been sold by the time McCall received the latest expense details. The stationery business lost money as a result of the greater expenditures. McCall states: “It’s frustrating to think about what bills may be coming in the future.”
More Effects on Small Business Owners
Finance & Commerce explains: “The Trump administration raised tariffs on goods from China to 145%.” This tariff increase occurred in 2025 at the beginning of April. Small enterprises, particularly family businesses, have been facing financial unease. Business owners advocate for reflection on new commerce policies affecting small companies. According to Finance & Commerce, effects already noted include “supply disruptions and price hikes.” Businesses have faced rising prices with dismay. In addition, smaller businesses feel strain from having to adjust to an ever-changing financial landscape.
The current policies particularly affect businesses with processes that involve buying items from China. One family business, WS Game Co., is located in Massachusetts. This business focuses on games, and its games are produced in China. According to Finance & Commerce, there have been “three containers with finished games… stranded in China.” These game containers had a total value of $500,000. WS Game Co. has lost $16 million in orders.
House, a home decoration business in Kentucky, also incorporates Chinese items in its business operations. The business provides arrangements of artificial flowers, 90% of which are imported from China. Holiday flower decoration supplies have already been purchased. Some flowers for everyday arrangements have been bought in advance of the tariffs. However, Jeremy Rice, co-owner of House, is concerned. Rice currently has only about two or three months’ worth of inventory. He worries about what he will do once this supply dwindles.
General Tariff Worries
Gus Faucher is The PNC Financial Services Group’s chief economist. Faucher explains to CNN that smaller businesses “typically have minimal wiggle room in their margins.” Smaller businesses can be vulnerable in ways larger businesses may not be. A smaller business may not have a financial cushion to absorb unexpected costs, while a larger business may have funds to pay expenses connected to tariffs with less worry. Also, larger businesses may have more leverage to negotiate prices with suppliers.
However, according to CNN, “small businesses could be the canaries in the coal mine.” Difficulties experienced mainly by smaller enterprises now may eventually be felt more widely. CNN states that Trump’s tariff implementation is “the sharpest escalation… in more than 115 years.” Economists are concerned that there may be spiraling negative effects.
