2025 Trump Tariffs: Impact on Small Business Financing and Industry Dynamics

On December 17, 2025 (EST), CNBC reported that small U.S. businesses affected by President Trump’s 2025 import tariffs are taking on high-interest loans to cover increased operating costs [9]. This development unfolds in a historically high-tariff environment: the 2025 tariffs pushed the average U.S. import rate to 16.8%—a level not seen since 1935—resulting in over $200 billion in tariff revenues collected by U.S. Customs by December 2025 [1][4]. Small businesses, particularly in retail (e.g., apparel), manufacturing (e.g., machine parts), and chemicals (where some firms operate below capacity due to tariff-related demand declines), are disproportionately affected due to their reliance on imported inputs/goods and limited financial cushions compared to large corporations [2][5].

While the Small Business Administration (SBA) guaranteed a record $44.8 billion in small business loans in fiscal 2025, many firms unable to access affordable SBA loans are turning to alternative financing with interest rates as high as 20–30% [1][9]. The tariffs have triggered a cascading effect: rising import costs → cash flow gaps → increased demand for high-interest borrowing (a 20% increase in financing flows as frontloaded 2025 inventories are exhausted) [3]. To adapt, small retailers like Loftie have scrambled to shift production from China to Thailand, incurring additional costs, while a net 34% of small businesses raised prices (the largest monthly jump in NFIB survey history) to offset tariff burdens [2][7].

1. Disparate Competitive Impact
   : Large corporations with greater scale, cash reserves, and global supply chain flexibility can absorb tariff costs or shift suppliers more easily, potentially gaining market share from smaller peers [7].
2. Policy Response Implementation Lags
   : The SBA doubled loan limits for small manufacturers to $10 million via the Made in America Manufacturing Finance Act, but the measure’s real-world impact on reducing financing gaps remains unproven [8].
3. Legal Uncertainty Delays Planning
   : A pending Supreme Court ruling on the legality of Trump’s tariffs is delaying long-term supply chain and investment decisions for importers [3].
4. Consumer Price Ripple Effects
   : Higher prices from small businesses (driven by tariff costs) may erode consumer discretionary spending, creating secondary economic impacts [7].

• Short-Term
  : Cash flow insolvency and loan defaults due to exorbitant 20–30% interest rates on alternative financing [1][9].
• Medium-Term
  : Market share loss to large firms and costly supply chain restructuring (e.g., production shifts) [2][7].
• Long-Term
  : Policy uncertainty from the Supreme Court ruling delaying investment and supply chain modernization [3].

• Government-Supported Resilience
  : The Made in America Manufacturing Finance Act provides opportunities for small manufacturers to access larger, more affordable loans for onshoring efforts [8].
• Private Credit Growth
  : The shift to high-interest loans is driving demand for private credit in tariff-affected sectors, though this comes with elevated default risks for lenders [3].

This analysis synthesizes critical data on the 2025 Trump tariffs’ impact on small businesses:

• Tariff Environment
  : 16.8% average U.S. import rate (1935 high); $200 billion in tariff revenues by December 2025 [1][4].
• Affected Sectors
  : Retail, manufacturing, chemicals [2][5].
• Financing Landscape
  : SBA guaranteed $44.8 billion in loans in FY2025, but alternative financing carries 20–30% interest rates [1][9].
• Policy Measures
  : Made in America Manufacturing Finance Act doubled SBA manufacturing loan limits to $10 million [8].
• Stakeholder Impacts
  : Small businesses (cash flow pressure, layoffs), lenders (higher default risk), consumers (higher prices) [7][8].

[0] Ginlix Analytical Database (internal)
[1] CNN - “‘Everyone is hunkering down.’ The affordability crisis is rattling mom-and-pop shops” https://www.cnn.com/2025/11/18/business/prices-economy-tariff-small-business (2025-11-18)
[2] The Business of Fashion - “Small US Retailers Face Holiday Supply Chaos Due to Trump Tariffs” https://www.businessoffashion.com/news/retail/small-us-retailers-face-holiday-supply-chaos-due-to-trump-tariffs/ (2025)
[3] CNBC - “Trump trade war shift away from Chinese manufacturing has reached tipping point” https://www.cnbc.com/2025/12/07/trump-tariffs-trade-war-china-manufacturing-supply-chain.html (2025-12-07)
[4] CNBC - “U.S. Customs: More than $200B collected under Trump tariffs in 2025” https://www.cnbc.com/video/2025/12/16/u-s-customs-more-than-200b-collected-under-trump-tariffs-in-2025.html (2025-12-16)
[5] ICIS - “President Trump’s tariffs change chemical industry business models” https://www.icis.com/chemicals-and-the-economy/2025/11/president-trumps-tariffs-change-chemical-industry-business-models/ (2025-11-30)
[6] Axios - “Trump tariffs, inflation: Small-business owners are losing confidence” https://www.axios.com/2025/12/10/trump-tariffs-small-business (2025-12-10)
[7] NBC News - “For small businesses hit by soaring costs, layoffs are painful and personal” https://www.nbcnews.com/business/consumer/small-business-owners-layoffs-personal-rcna247229 (2025)
[8] The Manila Times - “Administrator Loeffler Applauds House Passage of ‘Made in America Manufacturing Finance Act” https://www.manilatimes.net/2025/12/02/tmt-newswire/globenewswire/administrator-loeffler-applauds-house-passage-of-made-in-america-manufacturing-finance-act/2234817 (2025-12-02)
[9] CNBC - “Trump tariffs: Small businesses take on high-interest rate loans to cover new costs” https://www.cnbc.com/2025/12/17/trump-trade-tariffs-business-loans.html (2025-12-17)