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Commentary: Trump's tariffs decimate small businesses

Willie Wilson, Chicago Tribune on

Published in Op Eds

President Donald Trump’s goal of more manufacturing in the United States is laudable. However, the approach of using tariffs as a weapon is reckless and will lead to price hikes and supply chain disruptions and destroy the backbone of America — small businesses.

As a small business owner, I know firsthand the pain of tariffs imposed on China and other countries. Tariffs represent a tax on companies importing and exporting products.

The U.S. has more than 34 million small businesses that account for 45.9% of employment and are responsible for 2.6 million new jobs created last year, a 2024 Small Business Administration report found. As we observe National Small Business Week, the mood is somber — because of Trump’s tariffs.

The administration’s argument that we must suffer short-term pain for long-term economic gain rings hollow to small businesses that lack cash flow to absorb increased supply costs.

Many businesses will have to close their doors, and the carnage of lost jobs, tax revenue and community instability will be felt by local governments and American families. Is it right to ask unhoused veterans living under viaducts to wait years for a manufacturing renaissance that may never come? What about those who may lose health care coverage through Medicaid if proposed budget cuts go through?

The promise that the economic pain will be fleeting defies reality. It is estimated that 67% of Americans are living paycheck to paycheck. The economic burden of tariffs falls disproportionately on lower-income households that spend a greater share of their income on imported goods. The Center for American Progress, a nonpartisan policy institute, estimates Trump’s tariffs could cost American households $5,200 every year.

The president’s approach to tariffs is rooted in punishing our trade partners and resetting terms so they’re favorable to America. The administration’s actions are damaging America’s standing around the world and, more importantly, harming small businesses and consumers.

I do not believe the U.S. economy is ready for a major shift to manufacturing. It would take at least three to 10 years to ramp up production capabilities, train a workforce and rebuild infrastructure. Small businesses and consumers rely on predictability to plan and manage their budgets.

The warning signs are clear. The Commerce Department reported the U.S. economy contracted by 0.3% in the first quarter. This was the first quarter of negative growth since 2022. Two or more consecutive quarters of negative gross domestic product growth indicates a recession. In an interview with NBC’s “Meet the Press,” Trump stated that the U.S. would be “OK” in the event of a short-term recession. If there is a recession, the average person would see higher costs, fewer jobs, reduced access to credit and increased stress.

Recently, the U.S. Chamber of Commerce, under pressure from small businesses, sent a letter to Trump administration officials urging that small businesses be excluded from tariffs if they could show harm to U.S. workers, and for products that cannot be made in the United States or are not readily available. The chamber argued that tariffs will plunge the economy into a recession and cause irreparable harm to small businesses.

Since the tariffs took effect, ocean freight bookings from China to the U.S. have dropped 60%, according to Flexport, a supply chain management company. “If the tariffs on Chinese goods continue at this rate — thousands of American companies will fail and millions of employees will lose their jobs,” Ryan Petersen, chief executive of Flexport, told The Wall Street Journal. The Trump administration’s removal of the “de minimis” exemption, which previously allowed duty-free treatment for e-commerce packages worth less than $800 from China and Hong Kong — has caused some companies to temporarily pause shipping to the United States.

Entrepreneurship has made the United States the envy of the world. America encourages innovation and risk-taking to start businesses. The trade war with China and other countries could stifle innovation. On May 13, the U.S. Court of International Trade is expected to hold a hearing regarding a lawsuit filed by the Liberty Justice Center on behalf of small businesses. The Liberty Justice Center is seeking to have the tariffs paused on the basis they are not legally authorized under the International Emergency Economic Powers Act, the law that Trump is using to justify the tariffs. Also, they assert the tariffs could decimate their businesses.

 

The following are suggestions to protect small businesses and consumers from higher prices:

1. Congress should reassert its power enumerated in Article I, Section 8 of the Constitution, which says: “The Congress shall have power to lay and collect taxes, duties, imposts, excises,” which includes tariffs.

2. Citizens should write or call their members of Congress and urge them to take back their power over taxation.

3. Trump should begin negotiations with China to reduce tariffs on small businesses and U.S. producers that rely on imports to manufacture in the United States.

4. Major companies should seek tariff exemptions for specific products.

5. Citizens should get rid of high-interest credit cards and live within their means.

With high taxes in Illinois and a nationwide rise in food prices, costs will continue to soar for small businesses and consumers. Trump should consider governing with compassion. The heart of the Lord is compassion, and that is a better way.

I write this commentary to make those comfortable with decimating small businesses and raising taxes on the American people uncomfortable.

_____

Willie Wilson is a business owner, philanthropist and former mayoral candidate.

_____


©2025 Chicago Tribune. Visit at chicagotribune.com. Distributed by Tribune Content Agency, LLC.

 

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