Turning on the news brings a plethora of information about a variety of tariffs, including some on specific goods like aluminum. Other tariffs being introduced have to do with the country of origin of imports. Regardless of what type of tariffs are instituted, there’s a considerable chance that these will affect small businesses.
Understanding how these tariffs will affect small businesses should be at the top of everyone’s list right now because those effects can filter down to consumers.
Increased costs for small businesses
Many small business owners look for the least expensive options for the products they sell. For some items, the profit margin is tiny, so a tariff of even as small as 10% may dip into their profits in a way that makes it impossible to continue to sell imported items. In some cases, these tariffs will push small businesses to close because they don’t have the buying power to leverage during price negotiations.
Some consumers may not realize how far-reaching these tariffs may become. Canadian imports account for approximately 30% of softwood lumber in this country. A tariff on these imports could mean that a sheet of plywood will cost considerably more than before the tariff. Most construction companies and craftsmen who use plywood won’t be able to comfortably absorb those increases, so they’ll have to pass them on to consumers.
Any small business that deals with imports in any manner should determine how the new tariffs may affect their business. Adjusting business models and learning about any alternatives may be beneficial for these business owners.