The Ripple Effect of Tariffs: American Businesses Navigate Uncertainty
For Beth Benike, owner of Busy Baby in Oronoco, Minnesota, a successful run on Shark Tank and deals with major retailers like Target and Walmart were almost derailed by a sudden shift in trade policy. Her story, and those of other tiny business owners across the country, highlight the precarious position many find themselves in as tariffs continue to be a central, and often unpredictable, element of the economic landscape.
The Burden on Small Businesses
President Trump’s tariffs, initially announced as “Liberation Day” tariffs in April 2025, have proven devastating for businesses like Busy Baby. Benike faced a potential $230,000 tariff on a $160,000 shipment from China. Whereas the tariffs were later reduced, the two-month stockout and subsequent financial strain forced her to deplete savings, forgo a salary, and reduce her workforce from five to three employees. She estimates a loss of half a million dollars in revenue directly attributable to the tariffs.
Benike isn’t alone. Dan Turner of Turner Hydraulics in Pennsylvania experienced similar volatility, facing fluctuating tariff rates on a crucial component sourced from China. He was forced to provide open-ended price quotes to customers, acknowledging the potential for increased costs due to tariff changes. Hanna Scholz, owner of Bike Friday in Oregon, saw U.S. Sales drop by approximately 17 percent in 2025, even though her bikes are built domestically, due to tariffs on imported components.
The Legal Challenge and Potential Relief
A potential lifeline for these businesses rests with the U.S. Supreme Court, which is considering whether Trump overstepped his authority when imposing tariffs under the International Emergency Economic Powers Act (IEEPA). A ruling against the administration could lead to refunds for some of the tariffs paid, though the process of receiving those funds remains uncertain. Benike is planning to join a class action lawsuit to expedite potential refunds.
Beyond Refunds: The Lingering Uncertainty
Even a favorable Supreme Court ruling may not provide lasting stability. The Trump administration has indicated its intention to reinstate tariffs through other legal provisions, leaving businesses bracing for further disruptions. As Benike noted, “If there’s anything certain about this administration, it’s that everything is uncertain.”
Who Really Pays the Price?
Contrary to claims made by the administration, a study by the Kiel Institute for the World Economy found that American importers and consumers are absorbing 96 percent of the cost of Trump’s tariffs, while foreign exporters bear only 4 percent. U.S. Tariff revenue increased to roughly $24 billion per month in 2025, a significant rise from 2024 levels.
Navigating the New Normal
The experiences of Benike, Turner, and Scholz underscore a growing trend: the increasing difficulty for small businesses to navigate a volatile trade environment. The uncertainty surrounding tariffs is hindering investment in capital expenses and forcing companies to adopt reactive, rather than proactive, strategies.
Turner Hydraulics, for example, is actively seeking alternative suppliers, even exploring options in Denmark, but remains wary of geopolitical factors that could trigger new tariffs. Bike Friday is managing disruption to timing and vendor availability, and has been unable to provide pay raises or fill vacant positions.
Pro Tip:
Consider diversifying your supply chain to mitigate risk. Explore options in multiple countries and build relationships with alternative suppliers.
FAQ: Tariffs and Your Business
- What are tariffs? Tariffs are taxes imposed on imported goods.
- Who pays for tariffs? While tariffs are levied on imports, the cost is largely passed on to American consumers and businesses.
- Can the President impose tariffs unilaterally? The legality of this practice is currently being challenged in the Supreme Court.
- What can businesses do to prepare for potential tariff changes? Diversify your supply chain, build flexibility into your pricing, and stay informed about trade policy developments.
The current situation demands adaptability and a willingness to embrace uncertainty. Businesses must remain vigilant, informed, and prepared to adjust their strategies as the trade landscape continues to evolve.
Seek to learn more about the impact of trade policy on small businesses? Explore our other articles on international trade and economic policy. Share your experiences in the comments below!
