How American Businesses Are Handling the Trump Tariffs

Since April 2025, U.S. companies have been adapting to a new tariff regime: a 10% baseline duty on most imports, country-specific surcharges, and the August elimination of the $800 de minimis exemption for parcels. Analysts estimate these measures could raise U.S. prices by 1–2%, translating to thousands in added household expenses. For businesses, the question is whether to absorb the costs, pass them on, or find creative workarounds.

Pricing, Inventory, and the Small Business Squeeze

Large retailers have leaned on premium customers to carry the tariff load. Levi Strauss, for instance, has managed to keep full-price sales steady, betting that affluent buyers won’t balk at higher tags. Other fashion brands have taken similar approaches, raising prices selectively while leaving budget lines relatively untouched.

But for small businesses, the situation is more dire. Without scale or deep capital reserves, they struggle to adapt:

• E-commerce sellers who once relied on de minimis shipping now face full customs paperwork and duties on every parcel. Many are scrambling to shift toward bulk imports and U.S. fulfillment, but this requires investments that larger competitors can absorb more easily.
  
  
• Independent Can Company, a Maryland steel can manufacturer, illustrates the danger. Hit by a 50% tariff on imported steel, it has seen orders fall 20–25% and already closed one plant in Iowa after earlier tariff rounds. CEO Rick Huether summed it up: “Our industry is being hurt by this because, really, only about 25% of the demand is in the U.S., so our industry has to buy 75% of our steel offshore.”
  
  
• Small manufacturers and boutiques lack leverage with suppliers and in-house compliance staff. Many are cutting hiring or raising prices outright, warning that customers will feel the pinch in coming holiday seasons.

Consider Custom Comet, a Portland custom merchandise company that sources some of their products and materials from overseas. Tariffs have hit the paper they use in their coffee sleeves and has what was an already thin margin get thinner. Like with other small businesses, they are having to decide whether to pass those costs on to customers or eat into their bottom line.

The same goes for their sister company, All-Star Trading Pins, that creates custom trading pins for youth sports. They are designed by American artists but produced in China due to the United States not currently having the factories available for this intricate form of metal manufacturing. Before tariffs, they could ship small orders under the de minimis rule and sell them at accessible prices. Now, every shipment requires paperwork, duties, and fees.

Compliance, Diversification, and Workarounds

Companies with the resources are getting creative. Many are using Foreign-Trade Zones (FTZs) to delay duties, reclassifying goods to minimize tariff exposure, or tweaking supply chains so products qualify under different origin rules. These strategies demand expertise and legal bandwidth, leaving small firms at a disadvantage.

Some manufacturers are pursuing “China-plus-one” sourcing, diverting orders to Vietnam, India, or Mexico. But the universal 10% tariff limits how much this helps. For complex industries like electronics, firms often conclude that it’s cheaper to pay the duty than rebuild supply chains from scratch.

Even when diversification is possible, it can take months or years to fully transition suppliers. For small players, it may never be feasible.

Broader Business Reactions

The ripple effects go beyond sourcing. Publicly traded companies from Procter & Gamble to Skechers have trimmed profit forecasts, citing tariff uncertainty. Meanwhile, surveys show small manufacturers scaling back on hiring and investment plans. Weak August jobs data confirmed the drag on business confidence.

Legal challenges are also underway. A federal appeals court ruled that many tariffs imposed under IEEPA exceeded presidential authority, though they remain in force while the case heads to the Supreme Court. Business groups are lobbying aggressively for sector-specific exclusions in the meantime. But for now, businesses operate in a gray zone of unpredictability

How Consumers Are Feeling the Tariff Pinch

While the brunt of tariffs falls first on businesses, consumers ultimately pay in higher prices, fewer choices, or longer wait times. It is a tax after all. And shoppers have already started to notice.

• Price creep on everyday goods. Analysts estimate that tariffs could lift annual household expenses by thousands of dollars. That’s not just on big ticket items like appliances or cars, but also smaller essentials such as school supplies, clothing, and canned foods.|
  
  
• Reduced variety on shelves. When small shops cut imported product lines or big retailers trim SKUs, consumers lose access to niche items. Specialty foods, unique apparel, and hobbyist goods are often the first to go.
  
  
• Delivery delays. With e-commerce sellers forced to reroute through U.S. warehouses instead of shipping direct from overseas, the wait for online orders is lengthening. What once took five days might now take two weeks.

For companies, the consumer reaction becomes another balancing act. Pass too much of the cost onto shoppers, and demand falters. Absorb too much, and margins collapse. One retail analyst noted that businesses are “walking a tightrope by testing what consumers will tolerate before they start walking away.”

Uneven Burdens, Uncertain Future

The story of tariffs in 2025 is one of uneven burdens. Giants like Levi’s can cushion the blow with targeted pricing, while Independent Can Company face existential risk. For every brand that finds a workaround, there’s a family-run shop wondering if next year will be their last.

The tariffs are not just a line on an income statement; they ripple through communities. When a can factory shutters, truckers lose contracts, local diners lose their lunch crowd, and towns lose tax revenue. When a toy shop drops imported puzzles, children lose access to unique products and parents see higher prices. The pain is dispersed, but very real.

Those who adapt early, diversify wisely, and bake tariff costs into their core strategy may endure. Those who can’t may find themselves on the wrong side of a trade policy that shows no signs of fading from American life.