US Small Businesses Paying $25,000 Extra a Month Due to Tariffs

2026 Could Bring Half-Million Dollar Bills

If you run a small business that imports anything, you already know 2025 has been brutal. But the numbers are worse than most people realize.

A new analysis found that the average small-business importer has been paying about $25,000 more per month in tariffs since April. That adds up to $151,000 in extra costs over six months.

And the pain is just getting started, because analysts project those bills could top $500,000 per business in 2026.

Liberation Day Changed Everything

On April 2, 2025, President Trump signed executive orders imposing sweeping new tariffs on imports from nearly every country. He called it Liberation Day and declared a national emergency over the trade deficit.

The orders imposed a 10 percent baseline tariff on imports from nearly all countries starting April 5, with higher country-specific rates kicking in April 9.

China got hit with an additional 34 percent on top of existing tariffs, while the EU faced 20 percent and Taiwan 32 percent.

$151,000 Extra in Six Months

The Center for American Progress analyzed tariff data and found that roughly 236,000 small-business importers paid an average of more than $151,000 in additional tariffs from April through September 2025 compared to the same period in 2024.

That works out to about $25,000 extra per month per business.

Small businesses paid an average of $36,000 in total tariffs per month during that stretch, more than three times what they paid during the same period the year before.

Mom-and-Pop Shops Hit Hardest

The smallest businesses are absorbing the biggest blows relative to their size.

Businesses with fewer than 50 employees paid an average of over $86,000 more during those six months than they did the previous year.

Small employers have limited cash flow and thin margins, which makes them far less able to absorb rising costs than larger companies. Many cannot raise prices without losing customers to bigger competitors.

120,000 Jobs Cut in November

The tariff squeeze is showing up in the job market. ADP reported that businesses with fewer than 50 workers cut 120,000 jobs in November 2025.

That was the largest monthly drop in two and a half years.

Large and medium firms actually added 90,000 jobs during the same month, but small business losses dragged the overall private sector into negative territory.

Paperwork Hours Have Doubled

Beyond the direct costs, business owners are drowning in new administrative work.

One sustainable fashion company told researchers it now spends 10 to 15 hours on tariff-related paperwork per shipment, up from 8 to 10 hours previously.

A medical supply company went from spending zero time on tariff paperwork to spending four to five hours per transaction. That time comes straight out of running the actual business.

Cheap Packages Now Cost More

The administration also eliminated the de minimis exemption, which had allowed packages under $800 to enter the country duty-free.

The exemption ended for China and Hong Kong on May 2, 2025, and for all other countries on August 29, 2025. De minimis shipments had risen from 140 million in 2014 to 1 billion in 2023.

Now every one of those packages faces tariffs and formal customs procedures.

74 Percent Fear Closing

The anxiety among small-business owners is reaching crisis levels.

A late-2025 survey by Small Business Majority found that 74 percent of small-business owners are now worried about their business surviving the next 12 months.

Goldman Sachs calculated that as of August 2025, businesses had absorbed 51 percent of tariff costs while passing 37 percent onto consumers through higher prices. The rest is eating into margins.

Real Businesses Feeling the Pain

The stories behind the numbers are grim. A Utah holiday lighting company said its tariff bill on 100 shipping containers is approaching $1 million, and about half its sales were locked in at prices set before the tariffs existed.

A New York toy company owner said her credit score has dropped because of loans taken to cover tariff costs, and banks are no longer willing to lend to her.

A spice shop in Boston had to stop importing ginger from India entirely after tariffs hit 50 percent.

$500,000 Bills Coming in 2026

If current tariff rates hold, the outlook for next year is even darker.

The Center for American Progress estimates that in September 2025, small businesses paid an average of roughly $42,600 in total tariffs.

If that monthly amount continues throughout 2026, the typical small business will pay more than $500,000 in tariffs next year. Analysts warn that could trigger additional layoffs, bankruptcies, and delayed investments.

Supreme Court Could Change Everything

On November 5, 2025, the Supreme Court heard arguments in consolidated cases challenging whether the president has the authority to impose tariffs under the International Emergency Economic Powers Act.

Justices across the ideological spectrum questioned whether the 1977 law authorizes sweeping tariffs, a power that traditionally belongs to Congress.

A decision is expected by the end of 2025 or early 2026 and could clarify whether importers can receive duty refunds.

Small Businesses Wait for Relief

For now, 236,000 small-business importers are stuck paying bills they never budgeted for.

The report called the tariffs a costly lump of coal for businesses during what is normally their most important sales season. A Supreme Court ruling against the tariffs could bring refunds and relief.

A ruling in favor of the administration would mean those $500,000 projections for 2026 become reality. Either way, the answer is coming soon.

This article was created with AI assistance and human editing.

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