Small Businesses Struggle To Stay Afloat Amid Trump’s Tariff Chaos

For many small businesses, the past week added yet another twist to the already confusing saga of President Donald Trump’s ever-changing tariffs.

The situation has been chaotic for months, with tariffs rolling out, pausing, and changing levels seemingly overnight. Then, on Wednesday, a US court ruled that Trump had overstepped his authority in imposing many of these import levies—only for an appeals court on Thursday to put that ruling on hold, adding even more uncertainty.

This roller coaster has left small businesses scrambling to plan, several owners told CNN. Some have had to rethink their product strategies, shift supply chains, cut staff hours, or delay product launches.

“My fear is that if this continues, we’ll see a mass extinction of small businesses,” said Julie Robbins, CEO of EarthQuaker Devices, an Ohio-based guitar pedal maker.

Trump first announced blanket tariffs on April 2, sparking global trade tensions that have only escalated. In early April, he paused reciprocal tariffs for 90 days everywhere but China. Shortly afterward, he hiked tariffs on Chinese imports to 145% but exempted smartphones and other electronics from the reciprocal tariffs. The US and China then agreed in May to a 90-day rollback of reciprocal tariffs, but by late May, Trump threatened 25% tariffs on smartphone makers like Apple unless they manufactured in the US. He also delayed levies on European Union imports until July 9.

And those are just some of the changes—new announcements often come via White House statements, social media posts, or other channels, leaving businesses with little time to react.

For small companies, the constant whiplash is especially challenging. Even big brands like Gap are feeling the squeeze, but smaller firms with fewer resources are particularly vulnerable. The National Federation of Independent Business reported its Small Business Optimism Index fell by 1.6 points in April, marking its second consecutive month below the 51-year average. Chief economist Bill Dunkelberg called uncertainty a “major impediment” for small businesses in a press release.

“It’s the smaller, niche brands that are really going to get hit by this,” said Jack Leathem, an analyst at Canalys.

Some business owners have already been forced to make tough choices. EveAnna Manley, president of Manley Labs, which makes high-end recording equipment, said she’s had to cut her employees’ hours by 25%.

China’s reciprocal tariffs have been particularly hard, she said, since it took decades to build up her network of reliable Chinese importers. Manley Labs’ sales have dropped by more than 19% compared to last year, freezing the company’s product development.

“It’s just a freaking mess right now,” she told CNN in late May, before last week’s court drama. “And I’m so angry that my own government has done this to me.”

Experts like Tala Akhavan, COO of Pietra—a platform that helps brands with sourcing and logistics—recommend flexibility and diversified supply chains as the best ways for small businesses to cope.

That’s the approach taken by Intuition Robotics, which makes home robots for older adults. The company’s chief strategy officer, Assaf Gad, said their digital subscription business provides enough stability to consider alternate production sites outside China. Gad explained that they plan for the long term, making them less vulnerable to sudden tariff changes.

Trump’s tariffs have even prompted Gad to consider expanding into international markets.

“Maybe it’s a good time to say, ‘Let’s not put all our eggs in one basket,’” he said. “We need to reduce the risk going forward.”

But for some companies, finding a plan B isn’t so easy. Sarah O’Leary, CEO of Willow, which makes wearable breast pumps, explained that as a medical device company, moving manufacturing isn’t straightforward. At one point, she had to pause exporting a postpartum recovery product from China because it became too expensive.

Last Wednesday’s court ruling that aimed to block many tariffs brought a small measure of relief, O’Leary said in an email. But she warned that uncertainty remains high and that “the chaos will persist.”

Even low tariffs can be a challenge for small businesses like hers.

“We don’t build our products with that much margin,” she said. “We have to evaluate what we can do to survive.”