Economy

Small Businesses Struggle Amid Trump Tariffs, Economic Headwinds: How They’re Adapting

Small businesses struggle: tariffs, rising costs, and marketing woes. Many raised prices; confidence is down.

September 3, 2025, 11:56 AM

A small business owner in an apron and colorful headscarf works at the counter of her shop

A focused small business owner assists a customer from behind the counter of a restaurant or specialty food shop. By MDL.

Executive Summary

Small businesses globally face significant economic uncertainty, rising operational costs, and diminished marketing returns, with nearly half increasing prices in response to U.S. tariffs, which were recently ruled illegal.

A new survey indicates a noticeable decline in confidence among small businesses regarding their marketing efforts, with only 18 percent feeling “very confident” in their marketing impact, down from 27 percent.

To cope with rising costs (cited by 44%) and tariff impacts (affecting 62% of businesses), 46 percent of small businesses have increased prices, 39 percent have switched suppliers, and 22 percent have postponed product launches.

The Story So Far

Small businesses globally are grappling with significant economic uncertainty and rising operational costs, primarily driven by the impact of President Trump’s tariffs, which, despite a recent court ruling deeming them illegal, have already compelled nearly half of businesses to increase prices. This complex economic environment, combined with diminished returns from marketing efforts, has led to a noticeable decline in confidence among business owners.

Why This Matters

The recent ruling against President Trump’s tariffs, combined with widespread economic uncertainty, is compelling small businesses globally to raise prices, with nearly half of respondents indicating this move, directly impacting consumers. This challenging environment also significantly erodes confidence in marketing effectiveness and forces operational adjustments, such as switching suppliers or postponing product launches, as businesses struggle to adapt to rising costs and diminished returns.

Who Thinks What?

Small businesses globally are experiencing significant economic uncertainty, declining confidence in marketing effectiveness, and rising operational costs due to factors like U.S. tariffs, leading them to increase prices, switch suppliers, or delay product launches.

President Trump and his allies promoted tariffs as a mechanism to generate billions for the U.S. Treasury and counterbalance earlier tax cuts.

Constant Contact, through its Chief Marketing Officer Smita Wadhawan, observes a significant drop in small business confidence due to economic uncertainty but also highlights the inherent resilience of business owners in adapting to pressures and “doing more with less.”

Small businesses globally are grappling with significant economic uncertainty, diminished returns from marketing efforts, and rising operational costs, with nearly half of respondents in a new survey indicating they have increased prices in response to U.S. tariffs. The findings, published Wednesday, highlight a growing gap between marketing investment and perceived effectiveness, as businesses navigate a complex economic landscape.

Impact of U.S. Tariffs and Economic Headwinds

The survey emerges as President Trump’s tariffs, previously implemented under emergency powers, were ruled illegal by a U.S. appeals court last Friday. These tariffs, which Trump and his allies have promoted in negotiations with traditional allies like the European Union, Japan, and India, were intended to generate billions for the U.S. Treasury and offset earlier tax cuts.

However, many consumers are experiencing higher costs as businesses pass on increased expenses. The ongoing uncertainty regarding the duration of these tariffs has prompted some business owners to fundamentally re-evaluate their strategies to maintain viability.

Survey Highlights Marketing Confidence Decline

The report, titled The State of Small Business Marketing, details a noticeable decline in confidence among small businesses regarding their marketing efforts. Conducted by Constant Contact, a digital marketing tools provider, the survey gathered responses from approximately 2,500 businesses across the U.S., Canada, Australia, and the United Kingdom.

Fewer than one in five small businesses, specifically 18 percent, reported feeling “very confident” in the impact of their marketing, a decrease from 27 percent in 2024. Additionally, only 17 percent of respondents felt “very prepared” to adapt to external economic pressures.

Smita Wadhawan, chief marketing officer at Constant Contact, noted the significant drop in confidence, attributing it to the prevailing economic uncertainty. This environment makes forecasting challenging for business owners, even with the advent of new tools like AI, which still present a learning curve for those juggling multiple roles.

Operational Adjustments Amid Rising Costs

Rising costs of goods were cited as the primary concern by 44 percent of the surveyed small businesses. The report indicates that 62 percent of businesses have experienced impacts on their sourcing and operations due to tariffs.

Globally, 46 percent of small businesses have increased prices, 39 percent have switched suppliers, and 22 percent have postponed planned product launches. A Constant Contact spokesperson clarified that it is reasonable to infer that tariff-related confusion and policy changes contribute to the “concern” over rising costs.

Regional Disparities in Business Sentiment

The survey revealed varying sentiments across different regions. Small businesses in the U.S. were most likely to express a complete lack of confidence in their marketing effectiveness.

In Canada, nearly half of businesses have raised prices, and 69 percent are facing supply chain issues. Approximately 45 percent of Canadian small and medium-sized enterprises have been negatively affected by changes in U.S. trade policies this year, although 47 percent expect enthusiasm for Canadian-made products to grow.

Conversely, small businesses in Australia and New Zealand displayed the highest level of economic optimism, with 67 percent feeling confident about the remainder of the year.

Resilience in the Face of Pressure

Despite the significant pressures, including shrinking margins that impact marketing investments, Constant Contact’s Wadhawan emphasized the inherent resilience of small business owners. She stated that while they are forced to make tough choices like raising prices or delaying launches, they are consistently looking for ways to “do more with less.”

In conclusion, the survey underscores the ongoing challenges faced by small businesses globally, from the direct and indirect impacts of U.S. tariffs to broader economic uncertainties. While confidence in marketing effectiveness has waned, businesses continue to adapt and innovate to navigate these turbulent conditions.