On Saturday, the Trump administration announced a tariff exemption for select technology products such as iPhones, PCs, and chips. While this move provides some relief, most small U.S. businesses are facing the brunt of the fallout from the newly imposed 145% tariffs on Chinese imports.
As order cancellations and abandoned freights become widespread, industry experts warn that the economic impact could soon become “irreversible” without a resolution to the U.S.-China trade war. The situation is especially precarious for SMBs, which typically lack the capital reserves or operational flexibility to absorb the rapidly skyrocketing costs. According to a PYMNTS Intelligence report, nearly one in five small and medium-sized businesses (SMBs) fear they will not survive the tariffs.
The 145% tariffs are impacting core product categories, including furniture, toys, apparel, footwear, and sporting goods. Alan Murphy, founder and CEO of container shipping analysis firm Sea-Intelligence, told CNBC that Chinese products in these sectors have seen a complete halt in U.S. orders.
Last-minute fee changes and unpredictable costs are making it nearly impossible for smaller businesses to plan or budget effectively. Many companies have already begun canceling orders and scaling back inventory in response to the uncertainty.
Although President Trump offered a 90-day tariff reprieve to most trading partners, China was excluded, underscoring the administration’s hardline stance. The resulting uncertainty makes it difficult for businesses to invest in alternative supply chains or domestic production. Many companies are adopting a wait-and-see approach, while others are exploring costly workarounds like bonded storage and foreign trade zones to defer duties.
Unless a broader pause in tariffs is extended to include Chinese imports, the financial strain and operational instability may become unsustainable for small businesses.
