US Bankruptcies Hit 15-Year High as Tariffs Crush American Businesses

717 Companies Filed in 2025

Corporate America just had its worst year since the Great Recession.

At least 717 companies filed for bankruptcy through November 2025, according to S&P Global Market Intelligence.

That is 14 percent higher than the same period last year and the most since 2010, when the economy was still reeling from the financial crisis.

Companies blamed inflation, high interest rates, and Trump administration trade policies that disrupted supply chains and drove up costs.

The pain was not spread evenly, and the sectors that got hit hardest tell a bigger story about what went wrong.

Tariffs Hit 90-Year High

The numbers explain a lot. In January 2025, the average U.S. tariff rate sat at 2.5 percent. By November, it had climbed to nearly 17 percent, the highest level since 1935.

President Trump imposed double-digit taxes on imports from almost every country, using emergency powers to justify the move. Steel and aluminum tariffs jumped to 50 percent.

Chinese goods faced rates as high as 47. 5 percent. The policy was supposed to bring manufacturing back to America.

Instead, companies that depended on imported materials found themselves paying bills they could not afford.

Factories Take the Hardest Hit

In a shift from previous years, industrial companies led the bankruptcy wave.

Businesses tied to manufacturing, construction, and transportation filed at the highest rates, overtaking the consumer retailers that usually dominate the list.

The sector lost more than 70,000 jobs year-over-year by November. Automakers warned of ballooning costs from 35 percent tariffs on Mexican parts.

Suppliers filed Chapter 11 in waves. The very industry Trump promised to revive ended up bleeding the most.

Spirit Airlines Goes Bust Twice

Spirit Airlines filed for Chapter 11 bankruptcy in August 2025, just five months after emerging from its first bankruptcy.

The Florida-based budget carrier had struggled for years with rising labor costs, an engine recall that grounded part of its fleet, and a failed merger with JetBlue that left it without a backup plan.

By December, the airline was surviving on $100 million cash infusions from creditors while cutting routes, furloughing 1,800 flight attendants, and slashing its fleet from 214 planes to around 100.

Solar Companies Collapse Nationwide

The solar industry went from boom to bust in 2025.

Louisiana-based PosiGen, which installed panels for 40,000 residential customers across 15 states, filed for bankruptcy in November.

The company blamed the administration’s cuts to renewable energy tax credits and tariffs on imported solar materials that climbed to 20 percent. PosiGen was not alone.

SunPower, Sunnova, and Solar Mosaic all filed in 2025.

Research firm Wood Mackenzie now projects residential solar installations will drop by as much as 46 percent through 2030.

Forever 21 Closes 500 Stores

The fast-fashion chain that once packed American malls shut down its entire U.S. operation in March 2025. It was the second bankruptcy for Forever 21 in six years.

This time, there was no coming back. The company blamed foreign competitors like Shein and Temu that undercut its prices using a tax loophole on small shipments.

Mall traffic kept falling, and the brand’s massive store footprint became a liability instead of an asset. About 500 locations closed, ending 41 years in the American retail market.

Rite Aid Disappears After 63 Years

The pharmacy chain that once operated more than 4,500 stores across the country closed its last locations in October 2025.

Rite Aid had been shrinking for years under the weight of opioid lawsuit settlements, shrinking profit margins, and competition from CVS and Walgreens. A second bankruptcy filing in May sealed its fate.

By the time it was over, one of the last independent national pharmacy chains was gone, its stores sold off piecemeal to rivals.

Mega Bankruptcies Surge Early

The biggest companies were not immune. Between January and June 2025, 17 companies with more than $1 billion in assets filed for bankruptcy, the highest half-year total since the COVID-19 outbreak in 2020.

Home decor retailer At Home filed in June after expanding aggressively during the pandemic only to watch demand collapse.

Teen accessories chain Claire’s filed in August, with most of its products coming from China, Cambodia, and Indonesia, right in the crosshairs of the tariffs.

Businesses Absorb Costs Until They Break

Many companies tried to protect their customers by absorbing the tariff costs themselves instead of raising prices. It was a losing strategy.

Import-dependent businesses found themselves squeezed between higher expenses and consumers who were already cutting back on non-essential purchases.

A Yale professor told reporters that companies were acutely aware of the affordability crisis facing average Americans. Some had the pricing power to survive.

Others simply folded.

Economy Grows While Businesses Fail

The contradiction was hard to miss. GDP grew at 4.3 percent in 2025, the fastest rate in two years. The stock market hit record highs.

But economists said the growth masked deeper problems. Wealthy consumers kept spending.

Corporate investments in artificial intelligence pumped money into the economy.

Meanwhile, smaller businesses in manufacturing, retail, and energy were going under at rates not seen in 15 years. The economy looked strong on paper, but not every industry got the memo.

8,100 Stores Close Nationwide

The bankruptcy wave left empty storefronts across the country. More than 8,100 retail locations closed in 2025, up 12 percent from the year before.

Party City, Joann Fabrics, Bargain Hunt, and Hooters all shut down or drastically reduced their footprints. Some closures came from companies that filed bankruptcy and liquidated.

Others came from chains that cut locations to survive.

Either way, the American retail landscape at the end of 2025 looked a lot emptier than it did at the start.

More Failures Expected in 2026

The wave is not over. Tariffs remain in place.

Credit conditions are still tight. Small and medium-sized businesses continue to struggle with costs that larger competitors can absorb.

Business experts predict that 2026 will bring more bankruptcies as companies that have been hanging on finally run out of options. The Great Recession took years to fully play out.

This time, the damage is still accumulating, and the bill is not yet paid.

This article was created with AI assistance and human editing.

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