Can Small Businesses Weather the Tariff Storm?

Tariff Impact on Small Business

The Cost of Protection: How Tariffs Challenge Small Business Resilience

Small businesses are the backbone of local economies—driving innovation, creating jobs, and fueling community growth. But a looming threat could slow their momentum: the next wave of tariffs.

As a former mayor of a border city in Arizona, Director of the Arizona Department of Commerce, and Chief of Staff at U.S. Customs and Border Protection, I’ve seen firsthand how trade policy hits the ground. Now, as CEO of Intermestic Partners, an international business advisory firm founded in 2011, my team and I help businesses navigate the ripple effects of cross-border policy shifts—especially in times like these.

Understanding Tariffs and Their Domino Effect

Tariffs—taxes on imported goods—are intended to protect domestic industries. But in practice, they often do the opposite for small businesses:

• Increased cost of goods, especially for import-reliant sectors

• Reduced global competitiveness

• Higher prices passed on to consumers, leading to softer demand

The Tariff Track Record

When steel and aluminum tariffs were introduced, small manufacturers bore the brunt. Yet not all sectors were equally affected—textiles and tech firms, for example, showed more flexibility. Resilience came down to supply chain structure and strategic foresight.

Over 97% of U.S. exporters are small businesses—but they account for only a third of total export value.

How Small Businesses Can Stay Ahead

With trade winds shifting, here are actionable ways small businesses can weather future tariff hikes:

1. Diversify suppliers: Don’t rely on one region. Spread risk across global partners.

2. Localize sourcing: Reduce tariff exposure by sourcing domestically when possible.

3. Renegotiate contracts: Share the tariff burden with foreign suppliers.

4. Cost-sharing strategies: Pass a portion of increased costs to consumers without alienating them.

5. Government programs: Stay updated on subsidies, grants, or favorable trade agreements.

The Government’s Role

Tariffs may boost revenue in the short term, but long-term policy must protect small businesses. Government actions like preferential trade deals, low-interest loans, or targeted grants are critical lifelines.

A Moment of Challenge—And Opportunity

While tariffs pose significant pressure, they also offer a rare opportunity to reevaluate and restructure. Businesses that pivot smartly—diversifying supply chains and deepening local roots—can turn policy headwinds into long-term growth.

At Intermestic Partners, we work with national and international firms to build these strategies. Our experience across North America’s border economies gives us a unique lens—and the practical tools—to help clients adapt.

Small businesses can survive tariffs. But survival isn’t enough—let’s help them evolve.

👉 Let’s talk: If your business is facing cross-border challenges, Intermestic Partners can help chart a smarter course forward.