New England Biz Law Update
Rising tariffs are squeezing small businesses faster than anyone expected, a new analysis from the Joint Economic Committee reveals.
The analysis warns that retaliatory tariffs are placing disproportionate pressure on small businesses that lack the buffers of larger firms. According to a release, recent importer data shows 72% of small importers are seeing significant cost increases, with 44% reporting shipping cost spikes of 20% or more. With rising expenses and shrinking margins, smaller firms are bearing the brunt of escalating tariff measures.
Abigail Wright, senior business advisor at ChamberofCommerce.org, said the latest wave of retaliatory tariffs is reshaping the economic landscape for small businesses in ways large firms are insulated from.
Also feeling the strain are independent creators and micro-businesses selling to U.S. customers. Sellers said in an online forum discussion that recent changes to import rules have made cross-border shipping far more expensive and complicated. Some postal systems are pausing parcel deliveries to the U.S. entirely.
As many businesses face higher shipping fees, mandatory prepaid tariffs, and customers unwilling to cover the sudden cost increases, even the smallest operators are being pulled into the tariff fallout.
That retaliatory tariffs are hitting small businesses hardest is due to several factors:
Small Businesses Lose Pricing Power Immediately
Large firms can negotiate or shift suppliers; small businesses can’t. Tariff-driven cost spikes force them to raise prices or absorb losses that quickly drain cash flow.
Small Businesses Can’t Absorb Sudden ‘Tariff Shock’ Costs
Unexpected duties or prepaid tariff fees can wipe out the profit from an entire shipment, leaving tiny operations vulnerable after just one bad invoice.
Tariffs Undercut Small Businesses’ Agility
Added paperwork, customs delays, and new compliance steps slow down the very speed and flexibility that small businesses rely on to stay competitive.
Customer Trust Drops When Fees Skyrocket
When buyers face surprise duties or higher shipping costs, many simply stop purchasing — a major risk for exporters who depend on repeat customers.
Small Businesses Get the Worst Shipping Options
When carriers raise prices or postal systems pause shipments, small sellers have no leverage. They pay higher rates and get fewer alternatives than large-volume shippers.
“Tariffs can quietly close doors for the smallest players long before anyone notices,” said Wright. “When a micro-business loses access to affordable shipping or sees overseas customers disappear, that’s not a policy debate, that’s someone’s livelihood. The danger is that we only measure tariffs in dollars, when the real damage shows up in lost chances, stalled growth, and businesses that never get the chance to scale.”
