The uncertainty surrounding Donald Trump’s tariff policies has left small businesses in North America struggling to plan for the future, with potential long-term consequences for the economy.
The uncertainty surrounding Donald Trump‘s tariff policies has been causing anxiety among small businesses in North America. The president’s recent decision to impose new 25% tariffs on goods from Mexico and Canada, as well as raising existing tariffs on Chinese imports by 10%, has left many business owners wondering if these measures are temporary or long-term.
The Impact on Small Businesses
Nicolas Palazzi, founder of Brooklyn-based PM Spirits, which imports and sells wine and spirits, including mezcal and tequila from Mexico, is one such business owner. He estimates that 20% of his products come from Mexico and is concerned about the potential impact of the tariffs on his business. ‘Is it for a day, is it a political flex or is it something that will last for four years?‘ Palazzi asked.
The tariffs are set to take effect on February 4th and are intended to remain in place until the crisis is alleviated. However, the uncertainty surrounding their duration has left many businesses struggling to plan for the future. ‘Definitely this is going to impact the business negatively, ‘ said Palazzi. ‘But can you really plan? No.’
Economic Consequences
Economists warn that the tariffs could push the economies of Mexico and Canada into recession. The Canadian Federation of Independent Businesses has described the looming tariffs as ‘existential‘ for many of its members. Dan Kelly, president of the federation, compared tariffs on imports to chemotherapy: ‘It poisons your own people in order to try and fight the disease.’
The Canadian Federation of Independent Businesses (CFIB) is a non-partisan organization that represents the interests of small and medium-sized businesses across Canada.
Founded in 1971, CFIB has over 95,000 members nationwide.
The organization advocates for policies that support entrepreneurship and job creation, providing its members with resources such as tax and regulatory advice, business insurance, and access to capital.
CFIB also conducts research on key issues affecting small businesses and publishes reports to inform policymakers.
The Tax Foundation estimates that the tariffs will cost the US economy approximately 286,000 jobs, not including retaliation. Analysts have also warned that the measures will weigh on growth, raise prices, and have a negative impact on small businesses.
A Difficult Time for Small Businesses
Smaller firms, who typically have less financial cushion and ability to swallow a sudden 25% jump in cost, will bear the brunt of the disruption. Ben Scott, California-based importer and owner of Pueblo de Sabor, which brings in Mexican brands such as Mal Bien and Lalocura, is frustrated by the uncertainty surrounding the tariffs.
‘There’s just a huge cost that’s going to affect so many people in ways other than they’re paying a couple bucks more for a cocktail,’ Scott said. Fred Sanchez, owner of Bad Hombre Importing, a small California-based importer and distributor of Mexican agave-based spirits, is contemplating selling off his stock of liquor and possibly shutting down due to the potential impact of the tariffs on his business.
Conclusion
The uncertainty surrounding Trump‘s tariff policies has left many small businesses in North America struggling to plan for the future. While some analysts believe that the tariffs may be a negotiating tactic, others warn that they could have long-term consequences for the economy. As one business owner noted, ‘You can’t really plan’ when there is so much uncertainty surrounding these measures.
