How to Best Support Small Businesses Impacted By Tariffs

By the fall of 2024, small businesses across the United States were bracing for the economic impact and uncertainties looming after the presidential election. After enduring recessions, pandemics, and a fluctuating market, the economy appeared to have recovered. However, many entrepreneurs—people who’ve poured their savings and dreams into building businesses—are facing a new challenge: tariffs. 

A tariff is a tax on imported goods – a fee a country charges when another country’s products enter its borders. 

With free and fair trade, businesses of all sizes and industries can forecast production costs, operating costs, and accurately determine a price that is paid by the customer. With the uncertainty of tariffs, small businesses are unable to accurately price their products or forecast sales and the costs to produce their goods. 

Hewn Bread in Evanston
Photo by Becca Heuer Photography

The Ripple Effect

Government at every level has a huge impact on whether or not people can achieve the American Dream, which is most commonly defined as the ideal that anyone, regardless of background, can achieve success and upward mobility through hard work, determination, and opportunity. 

What we know is that when a municipality invests in economic development, communities thrive. When a state agency drives out a large corporation through policy, opportunities wane. When a tourism board receives funding to boost marketing, investment occurs. 

Here are some of the conversations that I’m hearing: 

“Why can’t they manufacture in the United States?” 

The United States is often the last place of assembly for a product—whether your car or your favorite moisturizer. The tube that your moisturizer comes from may be labeled in the United States. However, the raw aluminum may be milled in Vietnam, the tube manufactured in Italy, and then shipped to your vendor to use as they wish. Each of these steps will add a cost to the final product.  

For many products—whether cars, moisturizers, or oranges—the United States lacks the resources, skilled labor, or raw materials to manufacture and produce them at an affordable price.

Fill My Jar in Brookfield
Photo by Jackie Ibe Photography

“Just pay it!” 

A great option. A Fortune 500 Company has enough capital to order $30,000 worth of product from a vendor and pay a $30,000 tariff. In the Net60 to Net90 period (a common 60 to 90 period where the buyer is responsible for payment after ordering), they’ll be okay covering that cost. They can ‘just pay it!’ 

However, Alexa, a client who left her full-time job to start an activewear company, poured in her life savings and is just beginning to return a profit. That extra $30,000 tariff, an additional, unexpected upfront cost and a Net60 pay period could drive her family to bankruptcy. 

So what do we, the average consumer, do? 

• Shop Locally: Prioritize purchasing from local small businesses. This direct support helps them maintain revenue streams and offset tariff-related expenses.​

• Advocate for Policy Change: Engage with local and national representatives to express concerns about tariffs' impact on small businesses. Collective advocacy can influence policy adjustments that favor small businesses.

• Participate in Community Initiatives: Join or support local organizations and events aimed at promoting small businesses, such as co-op buying groups or local business associations.​

• Stay Informed and Spread Awareness: Educate yourself and others about how tariffs affect small businesses. Sharing accurate information can lead to more community support and informed decision-making.​
  
  

Kiko’s Flower & Gifts in Park Ridge
Photo by Carole Lynn Photography

What can municipalities do to support small businesses during tariffs? 

• Provide Tax Breaks & Incentives – Offer temporary tax relief, credits, or rebates to offset increased costs due to tariffs.

• Small Business Grants – Establish funds to assist businesses with tariff-related expenses like increased material costs.

• Low-Interest Loans – Create or expand municipal loan programs to help businesses cover short-term financial burdens.

• Simplify Procurement Processes – Prioritize purchasing from local businesses for municipal contracts, helping sustain their revenue. Even your local school district ordering uniforms from a small business can be beneficial at keeping doors open.

• Networking & Collaboration – Facilitate partnerships between local businesses to share resources and bulk-purchase tariffed goods at lower costs. It’s as simple as a local merchants group meeting! 

• Encourage “Buy Local” Campaigns – Promote initiatives that encourage residents to support small businesses impacted by tariffs.

At All Together, we’re actively working with our clients to help them keep their local economies fueled by small businesses during these unprecedented times. This includes local business support and driving awareness around these issues. 

If you’re interested in continuing this conversation for your favorite place, send us a note at [email protected].