How Trump Tariffs Could Affect Small Businesses — and Their Customers

• Feb. 4, 2025Updated 3:30 p.m. ET

For small businesses across the United States, President Trump’s broad tariffs on Chinese-made goods could squeeze their already tight margins, and cause sticker shock for customers.

Sarah Pitkin, who owns four hardware stores in Virginia, said the prices of the power tools, barbecue grills and electronics that she stocks could all rise as a result of the 10 percent tariff on Chinese products, which took effect on Tuesday. At least 40 percent of the goods that Ms. Pitkin sells are imported from China through her distributors, who she said would probably pass the cost of the tariff on to her.

A $129 drill at her store, for example, might jump to more than $140. Profit margins for power tools are tight, Ms. Pitkin said, meaning she would have to charge her customers for the entire cost of the tariff.

“People can’t pay more for stuff, and won’t pay more for items,” Ms. Pitkin said. Referring to the size of her inventories, she added, “Your items shrink to the point where you’re really going to evaluate if you’ll keep certain shops open.”

Consumer electronics, electrical equipment, and textiles and apparel are among the top categories of goods imported into the United States from China, according to Census Bureau data compiled by Torsten Slok at Apollo Global Management. Tariffs on these imports, and others, are poised to have ripple effects throughout the economy, hitting small businesses that rely on the goods — whether directly or through distributors — particularly hard.

In a survey of more than 600 members by the National Small Business Association, set to be released next week, more than half the owners said they were concerned about tariffs under the Trump administration, and nearly a third were “very concerned,” said Molly Day, a spokeswoman for the association.