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President-elect Donald Trump is wasting little time affirming that tariffs will be a Day One priority. With his inauguration less than two months away, small businesses are already making moves to avoid expected cost increases — or weighing whether to take a financial hit or pass it on to customers.
On Monday, Trump announced on Truth Social that he plans to implement 25% tariffs on all goods from Mexico and Canada, plus an additional 10% tariff on goods from China.
He didn’t reiterate his calls on the stump for blanket tariffs on imports from practically everywhere, and some experts predict his proposed trade barriers would face legal challenges. But despite the uncertainty, small businesses that had eyed the plans nervously during the campaign say the clock is ticking to insulate themselves as best they can.
There’s a sense of urgency, and I’m very nervous.
Beatrice Barba, owner of Tabor Place, san francisco bay area
Beatrice Barba runs Tabor Place, a San Francisco Bay Area maker of nontoxic cups and lunch boxes for children. She’d intended to spend 2025 innovating new styles of her signature sippy cups, but now she’s dropping those plans and stockpiling as much of her basic inventory as she can.
Her entire product line is made in China, because none of the 80 domestic manufacturers she contacted when she launched the business around six years ago could execute her borosilicate glass designs.
Barba was a little worried about Trump’s tariff proposals, but she didn’t expect him to win, and she doubted his commitment to imposing them if he did. Over the next couple of months, she’s hoping her Chinese suppliers can churn out a single $200,000 order for the whole year — and get it through U.S. ports — before Trump takes office.
“That at least buys me a little bit of time to weather the storm,” she said. “There’s a sense of urgency, and I’m very nervous.”
Economists broadly dislike tariffs, saying they tend to increase prices for consumers — a likelihood that many company executives are already warning of. Small-business owners who weathered Trump’s first round of levies told NBC News last month that they’d struggled to adapt, with many describing limited options for absorbing cost hikes compared with larger rivals. The new slate of tariffs Trump calls for would be much steeper and more far-reaching if fully implemented.
“In his first term, President Trump instituted tariffs against China that created jobs, spurred investment and resulted in no inflation,” Trump transition spokeswoman Karoline Leavitt said in a statement. “President Trump will work quickly to fix and restore an economy that puts American workers [first] by re-shoring American jobs, lowering inflation, raising real wages, lowering taxes, cutting regulations, and unshackling American energy.”
Analysts generally disagree, though Wall Street seems skeptical that the next administration will execute all its trade promises.
“Trump’s policy proposals from his campaign, at face value, could result in higher inflation in the near term and lower growth in the medium to long term,” researchers at S&P Global Ratings said in a release Tuesday. But tariff impacts on energy markets alone could persuade the next president to back down, S&P analysts said, adding that some experts see his latest pitch as “classic Trump” — a negotiating tactic that shouldn’t be taken literally.
But many small-business owners aren’t taking their chances.
“I’m much more worried now, sadly,” brewer Chris Smith wrote in an email after the election. Smith, the owner of the Virginia Beer Company, in Williamsburg, Virginia, said last month that he has been paying an extra $1,000 for tap handles every year since Trump placed 25% levies on steel in 2018. Now he’s accelerating the purchase of a stainless steel fermentation vessel from China and potentially a grain silo.
Smith said he usually adds one tank each year to his brewery, costing up to $30,000. He’s also watching the price of aluminum cans, hoping to negotiate prices with brokers.
Angie Chua, founder of Bobo Design Studio, a small stationery company in Palm Springs, California, is already searching for ways to save in case her costs rise.
Chua manufactures her signature product, a travel journal, in China — whose exports Trump has threatened to hit with 60% tariffs. Chua said that until she spoke with NBC News last week, before Trump’s recent announcement, she didn’t realize he wanted such high levies on Chinese goods. “It would be the nail in the coffin for us,” she said. “Sixty percent is horrifying.”
Chua said that after a rough year for Bobo’s e-commerce sales, she doesn’t have the funds to place a large order up front and that shifting to domestic suppliers would be prohibitively costly. So for now, she’s considering adding a tariff surcharge as a line item on her products so consumers can see what the price used to be.
“We’ll cross the bridge when we get there,” Chua added, echoing some of the uncertainty among market analysts. “How do you predict someone who is known to be very unpredictable? How do you even forecast for that?”
Consumers may focus on imported goods when they assess how tariffs affect the prices they pay, and domestic industries will be affected, too, said Hadley Douglas, who co-owns the Urban Grape wine shop in Boston with her husband, TJ Douglas.
She works with distributors to deliver wine to her stores, as she has to by law. If European or South American wines become more expensive, smaller distributors’ profits will dwindle, Douglas said, which could drive them out of business. But the same distributors also deliver domestic wines across state lines, which means U.S. wineries could have trouble getting their bottles onto shelves.
It’ll start at the smaller, family-owned distribution level, and that’s the first domino that will go.
Hadley Douglas, co-owner of the Urban Grape, Boston
“It’ll be a slow burn,” Douglas predicted. “It’ll start at the smaller, family-owned distribution level, and that’s the first domino that will go. They operate on very small margins.”
Douglas anticipates raising prices to cover the cost of potential tariffs but worries about losing customers as a result. She and her husband sit on the U.S. Chamber of Commerce’s Small Business Council, a group of about 100 entrepreneurs in various fields who agree on hardly anything. Tariffs are the exception, she said: Everyone’s against them.
Not all businesses have the cash on hand to stockpile inventory or accelerate purchases, as some large brands already plan to do. Joe Hakim, the general manager of Ackroyd’s Scottish Bakery in Redford, Michigan, is holding off placing his Easter chocolate order, which he usually does in October to ensure it arrives on time. But with potential tariffs on the horizon, he’s worried the price will jump, and he decided not to take the risk.
With Canada a 30-minute drive away, Hakim also thought about exporting Ackroyd’s products there, but that feels risky, too.
“We’re at a disadvantage because of the retaliation that could occur in shipping even to Canada, who’s an incredible partner of ours,” he said. “The kind of rabbit hole you can go down considering potential worst-case scenarios is really overwhelming.”
We’re at a disadvantage because of the retaliation that could occur in shipping even to Canada.
Joe Hakim, general manager of Ackroyd’s Scottish Bakery, Redford, Mich.
Specialty stores like his are culturally significant, too, Hakim said. His bakery sells Scottish and other British goods that can be tough to find in the U.S. That’s much the same reason customers are drawn to Kalustyan’s, a New York City institution that has sold spices, dried fruits, legumes and other specialties from the Middle East and South Asia since 1944.
Kalustyan’s co-owner Aziz Osmani said that tariffs are on his mind and that he’s prepared to negotiate with suppliers or look for alternatives if he needs to. His customers range from households to restaurants, and while he never wants to raise prices for items that few competitors carry, he sometimes has no choice.
“We have a diverse range of international products, which is the cornerstone of our identity,” Osmani said. “Cost increases are always impacting people like us.”
While most small-business owners aren’t optimistic about tariffs, some see a silver lining. Kate Assaraf, the owner of the sustainable hair-care brand Dip, makes all her beauty products in the U.S. She expects her Chinese-made accessories could take a hit but isn’t too worried.
“I think it’s an opportunity for people to think twice about consuming so much,” Assaraf said. She has never sold on Amazon and encourages customers to find her products in local stores.
“That’s what we scream out in the universe always with Dip: Buy better stuff, and buy less of it.”
Alexandra Byrne is an intern with the NBC News Business and Economy Unit.
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