Tariffs are having a real and devastating impact on thousands of small businesses across the nation as uncertainty, rising costs, and cancellations are hitting home.

To help thousands of small businesses navigate the challenges, the U.S. Chamber has been answering questions, holding briefings, sharing resources, and lobbying on their behalf.

Here are several important updates small businesses should know about tariffs as of August 1, 2025:

• The Trump administration is imposing new “reciprocal” tariffs ranging from 15% to 50% on 65 of the U.S.'s largest trading partners and 10% on nearly all other countries.
• The new tariffs range from 10% for many Latin American and African countries; 15% for major trading partners such as the EU, Japan, and South Korea; and about 20% for most of Southeast Asia.
• About 85% of goods imported from Canada and Mexico comply with USMCA—and can enter the U.S. market duty-free—but the remainder face new tariffs of 35% and 25%, respectively.
• The average tariff on goods from China today is 55%, with significant differences between product categories.
• Disputes with Brazil and India have strained relations, and the White House is imposing tariffs of 50% on Brazilian goods and 25% on Indian goods.
• Worldwide, the U.S. has imposed new tariffs of 50% on steel and aluminum and 25% on autos and many auto parts.
• Additional product-specific tariffs on products such as semiconductors (and the consumer electronics made with them) and pharmaceuticals are expected in the near future.

What Are Small Businesses Saying?

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Key Things to Know About Tariffs

• A tariff is a tax on imported goods paid by the U.S. business or individual receiving those goods at their port of entry. 
• Tariffs are levied on imported goods, not on services.  
• Broad-based tariffs bring painful retaliation against American exports, with American workers and farmers likely the first to feel the pain.

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Small Business Update

Thousands of small business owners have tuned in to our CO— Small Business Update virtual series to learn the latest on tariffs and their impacts. In the latest episode, U.S. Chamber of Commerce Chief Policy Officer Neil Bradley joined CO— Editor in Chief Jeanette Mulvey to share new information on tariffs and how the One Big Beautiful Bill Act will impact small businesses.

Frequently Asked Questions on Tariffs

We’ve compiled advice from Bradley and John Murphy, Senior Vice President, Head of International, to answer your questions on how tariffs are impacting small businesses.

Which industries or commodities will experience the most significant disruptions due to the tariffs?  

There are about 242,000 small businesses that import things into the U.S. every year and will feel tariffs cut into already slender margins. They represent about a third of all total imports, and many of those small businesses are struggling both with the tariff uncertainty and these higher tariff levels. 

Many of America’s most advanced manufacturing industries — including aerospace, medtech, and automotive — depend on global supply chains. Even industries that are largely domestic in production — such as the manufacture of windows or cement — will see heavy new costs, and the prices of domestically produced goods will rise in parallel with those of tariffed imports.

See the Tariff Impact

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How do we know if goods imported from Canada or Mexico qualify for duty-free treatment under USMCA?  

There are different tests for goods to qualify under USMCA. Some goods are obviously produced in one spot in North America, like lumber from a tree in Oregon. Other products, such as autos, must comply with detailed rules of origin outlined in the agreement. In other cases, a product must undergo a “substantial transformation” that adds value and allows it to be deemed North American. Companies should consult trade counsel or their customs broker for details.  

When will we see the impact of tariffs?

The impact has already started, and manufacturers and wholesalers have been “eating” tariff costs to some degree while awaiting clarity from August’s big tariff decisions. However, costs are inevitably being passed on to consumers, who are beginning to see price increases.

In addition, economic growth slowed from near 3% in 2024 to about 1.2% over the first half of 2025 as tariffs and related uncertainty led to lower business investment, declining real wages, and a softening job market.

We are already seeing small business importers with duties showing up on invoices for products they purchased from overseas.

Some businesses have been protected from tariffs by “tariff frontrunning” that boosted inventory ahead of the new taxes. Some have a greater ability to delay price increases. But every week that goes on, the negative impacts are going to build.

In our latest Small Business Index survey, 70% of small businesses reported that they are paying higher prices for the goods and services that they buy. And, since they can't just eat these higher costs, they're having to raise prices themselves. About 60% reported that they have raised prices recently for the goods and services they provide.

Our products are normally exempt from import duties. Will these products be exempt from the new tariffs?   

No, with very few exceptions. At the beginning of the year, about half of all imported goods paid no tariffs, but the administration has granted no exceptions to its sweeping new tariffs to date (except for select products such as semiconductors, pharmaceuticals, and lumber that the administration plans to subject to a different class of tariff in the near future). A rare exception is energy and some minerals.

Do you anticipate any further small business exemptions or reimbursements? 

Administration officials have uniformly said there will be no formal process for businesses to seek exemptions.

How are these tariffs affecting the U.S. economy overall?

On consumers, we anticipate the tariffs that have been imposed to date will cost the typical American household about $4,000 and will weigh more heavily on lower-income households, which tend to spend a larger share of their income on traded goods.

Tariffs also impact global competitiveness. Fifty-six percent of everything the United States imports is raw materials that manufacturers use to make their products domestically. Higher costs go right into the margins of manufacturers and, in many cases, compel them to raise their prices. If their prices are forced up, they're not going to be able to compete in international markets.

Where do the proceeds of the tariffs go? Who gets the money collected, and what is the intended use of the money received?

Tariff proceeds go directly to the U.S. Treasury, just like any other taxes, such as payroll taxes or income taxes. They are not earmarked for any particular use.

And even though these tariffs are very broad and at the highest level we've seen in a century, the revenue collected is not as large as you might think. The tariffs are so high that they're simply blocking a lot of the imports that would otherwise come in, and therefore, you don't get a lot of revenue. For example, what we saw back in 2018-2019 was that it took all of the tariff revenue to fund the support that was later given to American farmers and ranchers who were harmed by the trade war.

There are lawsuits. What’s happening in the courts, and how will the lawsuits impact current tariffs?

There have been several lawsuits challenging the President's authority to impose tariffs under IEEPA, the International Emergency Economic Powers Act. Since the 1970s, the law has never been used to impose tariffs, and there are good legal arguments that it can't be used to impose tariffs.

However, even if the courts rule that the President is unable to use IEEPA to impose these tariffs, he could almost instantaneously replace the IEEPA tariffs with identical tariffs under other statutes, which would have to start the court process all over. The court rulings on the IEEPA issue will be an important question for the future, but in terms of near-term tariff relief, the President could replace those tariffs with other things.

What should small businesses be doing to navigate the impacts of tariffs?

Higher tariffs are posing real challenges to small businesses across the country. Here are some strategies we have heard small businesses are deploying to help cope with higher tariff costs.

• Companies can work to diversify their supply chains by seeking alternative suppliers in countries with lower tariffs, or, exploring domestic sourcing to reduce dependency on imports.
• Some small businesses are negotiating with current suppliers to absorb part of the tariff costs. Also consider bulk purchasing or long-term contracts to secure better pricing.
• Many small businesses are raising prices. Make sure to transparently communicate cost changes to customers.
• Take this time to reassess budgets and reduce non-essential costs.
• Stay informed with the latest trade policy changes to anticipate market shifts and be ready to adjust your operations as necessary.

Does the U.S. Chamber have data tracking small business sentiment?

Yes. The U.S. Chamber of Commerce releases a quarterly Small Business Index that measures the confidence of small business owners regarding the economy and their own business operations.

We also compile and analyze small business data from other organizations in our Small Business Weekly Update. Many of these regular surveys are beginning to capture the downward spiral in small business sentiment, especially related to future growth.

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What is the U.S. Chamber doing in Washington to address the impact of tariffs? How can local Chambers help support this advocacy? 

The Chamber has pressed a wide array of members of the administration and Congress to reject the use of broad-based tariffs. We are working with our members — especially small businesses — to help them tell officials how they are being harmed by the tariffs. 

The Chamber sent a letter asking the administration to grant tariff exclusions for small businesses, for products not readily available from domestic sources, and in cases where tariffs threaten American jobs.

“We have heard from a historic number of small businesses who have made it clear: they need immediate relief from tariffs,” said Suzanne P. Clark, President and CEO of the U.S. Chamber of Commerce. “As each day goes by, small businesses are increasingly endangered by higher costs and interrupted supply chains that will cause irreparable harm.”

MORE: U.S. Chamber to Administration: Small Businesses Need Immediate Relief from Tariffs

We are providing timely updates and resources to help small businesses and state and local chambers navigate the changes. We encourage chambers to share the resources below with their members and communities. 

Lawmakers are often influenced when they see the real-world consequences for small businesses in their districts. The best form of advocacy is factual presentations of what's happening. You can share your tariff impact story with us here.