For many, owning a small business is the embodiment of the ideals of freedom and opportunity that are central to the American Dream. Small businesses comprise 98% of retailers and support more than 13 million American jobs.
Now, tariffs are leaving small retailers feeling uncertain about the future — and likely to become collateral damage of the trade war.
Small businesses, which make up 98% of retailers and support more than 13 million American jobs, are particularly vulnerable to tariffs. Learn more.
The aggressive trade strategy pursued by the Trump administration, which includes increasing tariffs on China to 145% and potentially reaching 190%-200% for some products, has left small businesses struggling to cope. While higher “reciprocal” tariffs on 60 countries have been paused until July 9, the impact on small businesses remains significant, especially as they are looking to make their holiday purchases. These tariffs are making it harder for small retailers to thrive and even survive.
That’s why NRF is sharing the stories of small businesses to highlight the impact of tariffs on Main Street retailers. Here’s what some small retailers are experiencing.
Main Street businesses are viewed as the backbone of communities, and their contributions are often touted by political leaders. But small retailers like Scott Farrell are feeling ignored. “I've always heard that politicians love Main Street and small businesses,” says Farrell, general manager of Down in the Valley, a record store with two locations outside of Minneapolis. “We can't absorb the costs.”
While Farrell understands the strategic use of tariffs to secure better trade deals for the United States, he is perplexed by the imposition of steep tariff increases on countries that small retailers depend on for sourcing goods. These tariffs, which small businesses must pay on the goods they order, are proving extremely harmful.
“What we'd like to see is more targeted tariffs. Obviously, we want our country to get the best deal there is, but wide-sweeping tariffs will do tons of damage to small businesses,” he says.
Bob Jones of Tinley Park, Ill., is carrying on his family’s version of the American Dream through American Sale, a pool and outdoor recreation store with locations in the Chicago area that has been in his family for over 65 years. American Sale relies on imports from a variety of global partners, as many of the products his company sells can only be manufactured abroad. Tariffs present concerning, and unprecedented, challenges for the business.
“We have weathered many storms,” he says. “However, this tariff storm is nothing like we've had to weather in the past.”
Jones is particularly concerned about the impact tariffs will have on prices for his customers. Unable to absorb the cost of the tariff increases, he expects his prices will rise significantly. “We are impacted to the tune of many millions of dollars by these new tariffs, which will put our products out of reach for our customers, and therefore will reduce our business to a dismal level,” he says.
Lisa Jae Eggert, owner of Three Mom’s Organics, a small insect repellent business based in East Hampton, N.Y., is frustrated. “I have no control over where my vendors get their inventory from, so it makes it extremely hard for me to control anything.”
Learn more about the issue of tariffs and why it matters to retailers today.
Despite her efforts to source and produce everything in the United States, Eggert faces a unique challenge. “China is the only country that manufactures the bottle caps essential for my product. My vendors buy the bottle tops from China because they are not made anywhere else,” she says.
“While I understand and support protectionism, I am seeing that my return customers who've ordered for years are ordering less this year. I think they are scared because of the economy.”
Visit “Tariffs Threaten the American Dream” to learn how you can support Main Street and help protect the American dream for both businesses and their customers.