Atlanta, GA – The U.S. Chamber of Commerce is urging tariff reform to alleviate burdens on small businesses across America, as persistent trade policy uncertainty continues to pose significant challenges. Tom Sullivan, Vice President of Small Business Policy at the Chamber, highlighted the impact of these trade pressures during a recent episode of the U.S. Chamber of Commerce Small Business Update.
Sullivan underscored that the misconception of international trade being solely the domain of large corporations needs to be rectified. A substantial 97% of the approximately 220,000 to 230,000 U.S. importers are in fact small businesses, with over half employing fewer than 50 people. Collectively, these small enterprises contribute to nearly a third of the total value of all U.S. imports.
The ramifications of tariff policies reach beyond just importers; domestic manufacturers also feel the squeeze. Sullivan noted that even small manufacturers sourcing materials domestically, such as steel, are experiencing cost hikes of up to 17%, despite these materials not crossing international borders. He questioned why it remains so difficult for small businesses to thrive given their significant role and contribution to the economy.
To address these challenges, the Chamber is advocating for an automatic tariff exclusion for small businesses, aiming to provide them with the certainty needed to plan and grow. Furthermore, Sullivan called for new free trade agreements to offer small businesses more sourcing options, especially as they look to reduce reliance on Chinese suppliers and consider reshoring production back to the U.S.
Sullivan highlighted Murphy’s Naturals, a North Carolina-based company as a success story. Initially reliant on Chinese suppliers for ingredients, the company has shifted to domestic providers over six to eight years and aims to have 100% of its essential oils manufactured in-house by next year. The founder also plans to become the only domestic producer of incense sticks, a product previously manufactured overseas.
Beyond trade policy, Sullivan warned of an impending tax hike for small businesses if Congress fails to extend key pro-growth tax provisions by the end of the year. The Chamber is collaborating closely with the White House to prevent this scenario. Sullivan emphasized that while small businesses align with the goal of reshoring manufacturing, they require time and alternative trade solutions to make the transition feasible.
The travel and tourism industry is another sector affected by recent trade tensions and policy shifts. Places like Park City, Utah, have seen a decline in reservations due to international disputes, even before new travel restrictions were enacted.
To navigate these turbulent times, Sullivan advises small businesses to leverage peer networks to stay informed about tariff changes and share their stories with advocacy groups like the Chamber. He believes that the more policymakers hear real-world examples, the more likely they are to craft solutions that support small business growth.
Sullivan remains optimistic, asserting that despite the challenges, it's still a good time to start a small business in the U.S., particularly for those addressing meaningful problems. Record-high startup activity indicates that the entrepreneurial spirit is robust, even amid uncertainty.
