President Donald Trump’s tariffs are leaving small business owners wondering if they can keep up with new potential disruptions in the supply chain.
In early 2025, Trump announced numerous tariffs on several US trading partner partners, including China, Mexico, Canada, the European Union, Cambodia, India, and more, creating uncertainty for small business owners to strengthen supply chains for small business owners and predict when and where prices will rise.
Small and medium-sized businesses and entrepreneurs in particular are hit hard as consumers who endure too thin margins and inflation prove to be a delicately balanced act when it comes to price increases.
Their future is still uncertain, but some are trying their best to prepare for a wave of opposing tariffs.
Online merchants face tough conditions
For small business owners, the effects of these tariffs have been suspended, but they become clear almost immediately.
Forrest Webber owns The Trade Table, an online home improvement store that offers everything from bathtubs to fridges. The Trade Table supply chain comes from “All Over” and features over 100 brands from Canada, the US, China and other countries.
One Canadian supplier reached out to Webber at the beginning of the week to inform them of a 25% price hike. This is the move that returned to a suspension of tariffs a day later.
Still, electrical appliances could be hit hard by future tariffs. All raw materials such as electronics, appliance parts, and steel are sourced from countries subject to customs duties. Half of trade table appliance suppliers are outside the US.
“We’ve dug deep holes over the past 50 years, everything is outsourced,” Weber says. “We just leave our appliances, and a lot of them come from China.”
Price increases are available on the menu
The US business ecosystem currently relies heavily on outsourcing. Cheaper international materials, goods and workers are encouraging suppliers and wholesalers to shift their supply chains internationally, increasing demand for US suppliers.
For example, take cut flowers. 80% of roses and other flowers are imported from countries in Central America and Africa. If California and Colorado once dominated the cut flower market and supplied the majority of American flower demand, trade agreements that cut taxes with Columbia and other countries that supply cut flower, and encouraged trade quickly outperformed domestic growers.
Now, tariffs are on the rise and the Trump/Vance administration is operating on a promise to bring production and manufacturing back to the US, so small businesses relying on the global supply chains of decades ago are scrambled.
For restaurant owners like Raul Lewis, who owns the Villia Chario restaurant chain in Texas and California, tariffs have increased costs in multiple ways.
Both serve a wide variety of Mexican dishes, including homemade tacos, Menudo and Birria, both at Birrieria Chalio. Almost all have materials sourced from Mexico and Canada.
Lewis has won beef tripes for menudo from both Mexico and Canada, and certain beef cuts of stew and tacos. Fruits and vegetables such as guacamole avocado and tomatoes for salsa also come from Mexico. He also relies on paper goods from China for take-out containers and cutlery.
Lewis ordered paper products for take-out containers in bulk in preparation for possible tariffs in late 2024 and to avoid price increases. However, these supplies will eventually disappear, and Lewis cannot stock up on fresh items like avocados and lettuce in advance.
The suppliers of Lewis restaurants warned customers in advance that pricing would increase dramatically. “They said they would expect prices to rise,” Lewis said. “And we have to convey that to the consumer.”
Lewis is considering adding takeout extra charges to the additional paper supplies used in takeout containers, reducing restaurant offerings, and perhaps removing menu prices altogether, adapting to rapidly changing costs.
Lewis says rising prices can create a “ripple effect” in the restaurant industry as restaurants balance their customer needs and maintain thin profit margins at their best.
This is coming to the edge of the long inflationary tail where price hikes are becoming more severe in their wallets as the economic situation becomes more uncertain.
“I think consumers are scared,” Lewis said. “They want to retain disposable income.”
In the meantime, Lewis expects it will take “sometimes” for the supply chain and food industry to adapt.
“It’s going to hurt,” he said. “Restaurants need to be creative, or they need to educate their consumers.”
Tariffs remained in US manufacturers
Not all businesses are hit hard by tariffs. For Ross Widmoyer, president and CEO of Faribeau Mill in Minnesota, “Made in the USA” is the motto of the entire supply chain.
Faribault Mill is what WidMoyer calls the “vertical integration” brand. The company sells wool blankets, sheets, winter wear and other wool items. Almost all of it is fully processed, woven, dyed and packaged in the United States.
Mill imports some material from New Zealand, but switching is not an issue. This is about 95% of Faribaut’s stock, which is American sauce.
“Our supply chain is reinforced fairly well domestically,” Widmoyer said.
Running a national company is not easy. The company’s 160-year legacy has given the company a runway to work with, from long-term suppliers to equipment. Faribault’s machines require a smooth repair and execution by a team of experienced mechanisms. This requires the knowledge of a generation passed on from work to worker.
“We had people working in factories throughout our careers, our parents were doing that and our grandparents did that too,” Widmoyer said.
According to Widmoyer, the payoff was substantial. Faribou – named after the town in which it lives – is the main source of work and income in the town and its surrounding area.
Faribault’s model is something to aim for, but the transition periods facing SMEs today are neither quick nor easy.
“There is always a barrier to entry in every industry. There is a moat for entry to produce domestically,” Widmoyer says.
If customs duties are enforced, it will take some time to move manufacturing plants and raw material suppliers to the US. Meanwhile, small businesses will need to navigate the limited supply and prices raised by tariffs.
Finding skilled workers is another challenge, Widmoyer said. Particularly because of the loss of institutional knowledge of mechanisms and manufacturing as manufacturing moved overseas.
“It would be great if we could teach people to love being part of a manufacturing company like us The final result,” says WidMoyer.They are important jobs. These people depend on them, and these communities depend on them.”
Tariffs write about the misery of the business of professional goods
Looking at domestic suppliers may be a solution for some companies, but for Heather Perry, CEO of California coffee company Klatch Coffee, it’s impossible to use American supply.
Although some coffee is grown in certain regions of Hawaii and California, it is not enough to meet the daily caffeine needs of Americans. Most coffee in the world is grown near the equator and requires import.
“If tariffs don’t apply to coffee, I love it,” Perry says. “That’s not something the US can compete with.”
The combination of environmental factors and market compression has already doubled the price of coffee over the past three months. Trump’s latest tariffs put Perry and Clutch’s coffee in a difficult position. They either raise prices and lose customers, or her profit margins continue to shrink.
“It’s tired of consumers watching prices creep up every month,” Perry said. “It’s a really delicate balance.”
Perry tried to balance that by introducing growth on a more frequent scale. Meanwhile, she is monitoring how the tariff situation develops after the suspension ends.
“No one knows what’s going on,” she says. “We don’t know what to expect.”
Uncertainty and hope for business owners
It is still unclear how the tariff situation will occur, so SME owners will remain in the darkness when evaluating pricing and supply decisions.
However, tariffs could represent a better change as the delicate balance of global supply chains and the economy focused on the US earlier domestically becomes more apparent.
Tariffs will raise prices for his appliances, but Weber has expressed his desire to source more products in the United States.
“I live here and I want to keep my finances flowing,” he said. “I can definitely see it coming back to the US, but it’s going to take a long time.”
Lewis had anticipated some growing pains as the restaurant industry adapted, but he hopes tariffs will push the shift towards US-based suppliers and manufacturers and fuel the American job market.
“I’m very hopeful,” Lewis said. “I pray that the administration has more information than we do, and that they are making the right move. If there is fire, there is rebirth.”
