A new report from Democratic members of Congress says the Trump administration’s tariffs are already wreaking havoc on small businesses in just the five weeks since the President’s so-called “Liberation Day” announcement.
The paper, titled Price Hikes and Layoffs: The Impact of Tariffs and Tariffs Uncertainty on Small Businesses was released on May 5 by the Democratic minority members of the Joint Economic Committee (JEC). The JEC is a bipartisan Congressional group that studies economic issues, analyzes data, and advises on policies to improve the economy. It’s made up of members from both the House and Senate and focuses on subjects like jobs, growth, and fiscal policy. Democratic members include senators Maggie Hassan (ranking member) Martin Heinrich, Amy Klobuchar, and Mark Kelly, along with representatives Don Beyer, Gwen Moore, Sean Casten, and Dave Min.
Findings from the paper, backed up by accounts from small business owners around the country, show that costs are rising, hiring is slowing, and some firms have already begun laying off workers.
Employment at businesses with fewer than 10 workers has dropped 3 percent, or by about 366,000 jobs, since the start of President Trump’s second term, the report says. About 30 percent of small business owners said in March that they plan to raise prices, the highest share in a year. Confidence is also slipping. The share of small business owners expecting better conditions fell from 37 percent to 21 percent in March, the largest monthly drop since 2020.
Industries like manufacturing, construction, trucking, and restaurants are being hit hardest. These sectors are mostly made up of small firms that rely on imported goods, which makes them more exposed to tariffs. About 98 percent of U.S. manufacturing firms and 99 percent of residential builders are small businesses. Builders estimate tariffs have added $10,900 to the cost of a new home. In trucking, nearly one million people work at small transportation businesses. At the port of Los Angeles, scheduled vessel arrivals in early May were down more than 35 percent from the same time last year. Less freight means fewer jobs for truckers.
A florist in New Hampshire says tariffs will add between $55,000 and $80,000 to her annual costs, enough to prevent raises, hiring, and equipment upgrades. A Maryland construction company says steel and aluminum tariffs have raised homebuilding costs by $20,000. A Colorado outdoor guide lost clients because of economic uncertainty. A California ice cream shop says higher prices on small items like sprinkles could erase their profit margins. A Utah accessory company couldn’t quote a price to a retailer due to tariff uncertainty. Others say they may have to shut down or shift production overseas.
This report comes from Democrats who oppose Trump’s trade policies. But it lines up with the broader mood. Small business optimism fell in March, according to a monthly survey from the National Federation of Independent Business. The National Retail Federation, which represents retailers of all sizes, found in its own survey that most voters believe tariffs raise prices and hurt small businesses.
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