As sweeping new tariffs take effect across the United States, entrepreneurs and small business owners are bracing for a wave of economic challenges that could reshape the landscape of American enterprise. President Trump’s 2025 tariff regime, which includes a 10% universal tariff on all imports and a staggering 54% tariff on goods from China, is already sending shockwaves through the small business community.

Small businesses, which account for nearly half of all private-sector jobs, are especially vulnerable. Unlike large corporations, they lack the financial cushion to absorb sudden cost increases. “For many small businesses, this is a one-two punch,” says Aaron Terrazas, an economist at Gusto. “They are getting higher prices from suppliers, and their customers are more skittish”. Many owners now face a painful choice: raise prices and risk losing customers, or absorb costs and see profits evaporate.

The numbers are stark. The Budget Lab at Yale projects that the average household will lose $3,800 a year due to higher prices, with lower-income families hit hardest. Apparel prices alone are expected to jump 17%. For entrepreneurs, this means thinner margins, delayed investments, and even layoffs. “These small enterprises will likely reduce their investments, which could contribute to a considerable economic slowdown and exacerbate the negative impact already caused by the tariffs,” warns Gus Faucher, chief economist at PNC Financial Services Group.

The uncertainty is just as damaging as the costs. Rapid, unpredictable changes to tariff policy have left business owners scrambling to manage supply chains, pricing, and inventory.“There’s a limit to how much we can increase prices before we price ourselves out of the market,” said Emily Ley, a small business owner facing an additional $630,000 in fees this year.

While supporters argue that tariffs could encourage domestic manufacturing and reduce federal debt, most experts agree the short-term pain for entrepreneurs is real and severe. As Joshua Bolten of the Business Roundtable puts it, tariffs “run the risk of causing major harm to American manufacturers, workers, families and exporters”.

For America’s entrepreneurs, the coming months will be a true test of resilience and adaptability. In this new era of trade wars and tariffs, the survival of small businesses may depend on their ability to innovate, cut costs, and weather a storm not of their own making.