Fortune | Thursday, March 5, 2025 
Fed survey reveals Trump’s tariff gut punch to the backbone of the U.S. economy: small business

During Donald Trump’s State of the Union address last month, the president championed the revival of his tariff agenda as a win for Main Street America. The levies, he said, would be paid for by foreign countries, “taking a great financial burden off the people that I love.” Quite the contrary, according to what mom-and-pop businesses are telling the Federal Reserve. Instead of an income tax replacement, as Trump has repeatedly described them, the data suggests the costs of tariffs have been primarily shouldered by U.S. companies and consumers. For American small businesses in particular, the backbone of the economy, there is less flexibility to diversify their operations or absorb costs and tariffs have completely rewritten the script, with massive implications for the national economy. Almost half of U.S. small businesses, 42%, have experienced rising costs due to tariffs over the past year, calling it a primary financial challenge, according to a Federal Reserve survey published this week. In some critical sectors, that figure surges well past the halfway mark, with 69% of retail firms, 62% of manufacturers, 61% of leisure and hospitality firms, and 56% of healthcare and education firms reporting that tariffs have squeezed their bottom lines…Read more