Small Business Organizations Express Concern Over Latest Tariffs
At a time when small business optimism remains at a historic high, a surprise shift in trade policy could start to threaten that. Last week President Trump announced that his administration would be placing a 5% tariff on all goods imported from Mexico starting June 10th. What’s more, the White House’s plan calls for that tariff to rise by five percentage points on July 1st, August 1st, September 1st, and October 1st. This would potentially bring the total tariff to 25% unless, as the President put it, “the Illegal Immigration problem is remedied.”
As CNBC recalls, a previous study by the National Federation of Independent Business (NFIB) found that one-third of business owners were somewhat or significantly negatively impacted by tariffs imposed on Chinese, Canadian, or Mexican imports. While no such research concerning the latest trade disputes has been released, the broad nature of the proposed tariffs on goods from Mexico would suggest that even more businesses would be affected.
In a statement, National Small Business Association President and CEO Todd McCracken took aim at the administration’s trade policy, saying of the latest decree, “These kinds of punitive tariffs can be greatly damaging to small businesses who rely on imported goods to provide a service, and can further harm small businesses looking to export due to retaliatory tariffs.” He went on to say, “Under this plan, affected small businesses will have less than two weeks to overhaul their supply chain or face significant, escalating price increases.” Meanwhile Small Business & Entrepreneurship Council president and CEO Karen Kerrigan elaborated on the threat to small businesses, noting, “The newly announced Mexico tariffs, if acted upon, are not only bad for small businesses and entrepreneurs but come at a horrible time. Mexico and Canada are moving forward with ratification of USMCA, and this new action undermines trust and the potential passage of this important agreement.” Interestingly, Kerrigan seemed to be sympathetic to the President’s plight, suggesting, “Congress must step up on this critical matter and work with President Trump’s team to resolve the growing influx of illegal immigrants and related humanitarian crisis.” Yet her position stands in contrast to what Trump has suggested about tariffs, as she notes, “Imposing new taxes on Americans is not the answer.”
With just one week until the first round of tariffs on Mexican goods is set to go into effect, small businesses that import parts or products from the country will likely need to start considering their options. Additionally, with the possibility of tariffs doubling only a few weeks later and potentially climbing higher shortly after that, it’s no wonder that some entrepreneurs are finding themselves scrambling to figure things out in these uncertain times. Just as economists and investors will be closely monitoring the trade situations with Mexico and China, surely many of America’s small business owners will be waiting with bated breath as well.