Despite the Trump administration's latest round of tariffs, US small and medium-sized businesses are largely unbothered, according to business owner and commentator Gene Marks. The new tariffs, announced after a Supreme Court defeat in February, are significantly lower than previous measures, and businesses have found ways to adapt, including receiving billions in refunds from earlier tariffs.
New tariffs are less severe
The latest tariffs, invoking sections of various trade acts, target industries and countries for reasons such as "forced labor" and "excess capacity." However, the rates are generally between 10% and 12.5%, a sharp contrast to the "liberation day" tariffs that ranged from 10% to 50%, with some Chinese goods facing rates as high as 145%. Even as recently as February, Indian goods were subject to tariffs up to 50%. The new, lower rates are more manageable, and the administration is already carving out exemptions.
Marks, who runs a firm with hundreds of small business clients and speaks to thousands of owners at conferences, notes that tariffs are no longer a hot topic. "Last year I was frequently asked to discuss tariffs to these groups. This year that topic is not even on the agenda," he says. "People don't care."
Refunds and legal challenges provide relief
One major factor is the refund process. Approximately $122 billion in refunds from previous tariffs have been accepted and are being paid out. While the process is bureaucratic and not all tariffs are included, many clients have seen money returned through their customs brokers. This unexpected windfall has boosted bank accounts and given businesses confidence that there is a process to overturn such actions.
Legal challenges are also expected. A few small businesses have already filed suits against the latest tariffs, and Marks believes the court system will work in their favor. "The appeals process is reliable. The supreme court actually cares about the law," he says. Given the administration's handling of other challenges, such as Iran and immigration, Marks and his clients are confident that plaintiffs' attorneys will find procedural flaws, making repeal likely.
Businesses have adapted
American entrepreneurs have shown resilience. Over the past two years, many have navigated tariff disruptions by moving products to bonded warehouses, leveraging data for better pricing, pivoting to technology for cost savings, and finding alternative suppliers or increasing domestic assembly. New tariffs are just another incentive to exercise these options, and businesses are less fearful than before.
Since Covid, production, delivery, and operating costs have risen 20% to 40% for most businesses, driven by energy prices, government-spending inflation, and supply chain issues. Tariffs are only a small part of that cost increase, muting their overall impact.
Uncertainty has decreased
The chaotic tariff announcements of Trump's first term—announcing, changing, increasing, decreasing, removing—have given way to a more predictable process. The trade acts require a process for approval, providing time for businesses to respond. While uncertainty remains due to Trump's unpredictable behavior, it has muted, which is good news for business planning.
Marks recalls media hand-wringing over small businesses like a bike shop owner buying from India, a wine merchant specializing in French products, and an online shoe retailer using Chinese suppliers. Those businesses were indeed hurt, but most small businesses—pizza shops, auto mechanics, dry cleaners, architects, accountants, healthcare providers—don't import goods and are largely unaffected. "Tariffs didn't affect them very much or at all," he says.
In conclusion, tariffs are annoying, disruptive, and often unnecessary, but the latest round won't be as impactful, if they happen at all. US business owners are taking them in stride.
