FOR IMMEDIATE RELEASE
Monday, May 5, 2025
Price Hikes and Layoffs: New Report on Impacts of Tariffs on U.S. Small Businesses
Released During National Small Business Week (May 4-10), New Report Finds a Drop in Employment at Smallest Businesses Across the Country
WASHINGTON – The Joint Economic Committee – Minority today released a report at the start of National Small Business Week with new data and specific examples from across the country that demonstrate the ways in which tariffs – and uncertainty about tariffs – are already harming small businesses.
“Small business owners are innovative, driven, and scrappy – they often operate on razor-thin margins and are constantly finding new ways to grow. But President Trump’s tariffs are needlessly causing immense uncertainty for small business owners, forcing them to make layoffs, increase prices for their customers, and even close their doors. Through new data and the direct experiences of individual small business owners, this report demonstrates the ways in which tariffs are already hurting small businesses,” said Senator Maggie Hassan, Ranking Member of the Joint Economic Committee.
Read the full Joint Economic Committee – Minority report here. Key points from the report:
- New Committee analysis of data released on May 2nd shows that employment at small businesses with fewer than 10 employees declined by 3 percent – 366,400 jobs – since President Trump took office.
- This compares to a 1.2 percent increase in the first months of President Biden’s term and a 0.1 percent decline in the first months of President Trump’s first term.
- Price hikes: Recent survey data found that 30 percent of small business owners indicated in March that they plan to increase prices – the highest amount reported over the last year.
- The net percent of small business owners expecting better business conditions declined for the third consecutive month in March – from 37 percent to 21 percent. This represents the largest monthly decline since December 2020.
- Small businesses in the manufacturing, construction, trucking, and restaurant industries are hit especially hard by tariffs and tariff uncertainty.
- Five of the 12 Federal Reserve Districts recently reported weakening manufacturing activity – in large part due to trade pressures.
- The Federal Reserve Bank of Cleveland found a recent decline in demand for manufactured goods. Their contacts cited uncertainty about import tariffs as one of the reasons for the decline.
- The report also details the experiences of 15 small business owners throughout the country. For instance:
- Amber Morgan – who owns a small business in Nashua, New Hampshire that imports flowers from Canada – is already facing cost pressures: “We anticipate that the annual costs will range from $55,000 to $80,000 per year, or the equivalent of two full-time employees. We will not be able to give pay raises, hire new individuals we desperately need, give part-time workers more hours, or purchase replacement vehicles we similarly desperately need. This additional financial strain not only affects our ability to remain competitive but also places an undue burden on our loyal customers who rely on our products and services.”
- Ed and Becky Morgan – who own a farm in Shanks, West Virginia – described their inability to plan given the tariff uncertainty: “We stand a chance of overcoming prices, we can’t overcome uncertainty,” Becky explained.