As the 2024 U.S. presidential election looms, Donald Trump's proposal for universal tariffs ranging from 10% to even 50% is raising questions among business owners, particularly those running small businesses. While some large corporations might find ways to circumvent these tariffs through personal connections or political influence, smaller companies fear they may not have the same opportunities.
The Challenge for Small Importers
During a recent interview in Chicago, Trump acknowledged the existence of "exceptions" to these tariffs, but his statements suggested that these exceptions might primarily benefit big businesses. CEOs of major corporations, such as Apple's Tim Cook, reportedly have direct access to Trump and other high-level officials, allowing them to seek favorable terms. However, the outlook for smaller importers, who rely on overseas manufacturing and have far less political leverage, remains unclear.
Tina Wells, an entrepreneur who runs beauty and wellness companies, shared her concerns about how her business would be affected by Trump's tariff plans. "As a small-business owner, I'm thinking, 'Am I even being considered?'" Wells said in a recent interview. She recounted how tariffs imposed during Trump's previous administration left her business in a precarious position. "I'd lost my profit, ate the cost of the item, and had to ultimately destroy the product," she recalled. Wells fears that if another round of tariffs hits in 2025, the impact could be even more severe for small businesses.
Exceptions Based on Merit or Influence?
Despite Trump's assurances that tariff exceptions would be granted "based on merit," some experts are skeptical. Wendy Edelberg, director of the Hamilton Project at the Brookings Institution, highlighted that recent history shows exceptions tend to be driven more by political realities than merit. "Exceptions are often made for those with the most political clout, leaving smaller businesses at a disadvantage," she said.
The question of whether small businesses will be able to navigate the process of applying for exceptions looms large. While major corporations may have the resources to lobby for exemptions, smaller importers, who have fewer connections in Washington, D.C., may not be able to do the same. Trump's focus on his relationships with top executives, such as his frequent interactions with Tim Cook, underscores the disparity between how large and small businesses might fare under his tariff regime.
Potential Long-Term Effects
The broader economic implications of Trump's tariff policies are also a concern. Mark Cuban, an outspoken supporter of Kamala Harris, warned that Trump's tariffs could lead to higher consumer prices, especially during peak shopping seasons. "A Trump win would drive up prices to the point where you won't be able to afford the presents that you want for your family and friends," Cuban said during a recent appearance in Wisconsin. Cuban's remarks highlight the potential for higher costs across a wide range of consumer goods, further burdening small businesses and their customers.
Research from the Brookings Institution and other economic think tanks suggests that businesses may face significant challenges if they are forced to navigate a new round of tariffs. In the past, larger companies with political connections have been able to secure exceptions, while smaller importers struggled to cope with the additional costs. The uncertainty surrounding Trump's policies could lead to a "really exhausting" time for businesses, according to Edelberg. Planning for 2025 could begin as early as now, even though the full details of Trump's tariff plans have yet to be revealed.
The Uncertain Future for Small Businesses
For small businesses like Wells' beauty and wellness ventures, the stakes couldn't be higher. With plans for product deliveries already being finalized for early 2025, businesses are left wondering how Trump's tariffs will affect their bottom line. The lack of clarity around how tariff exemptions will be handled for small companies is creating anxiety for entrepreneurs across various sectors. As Wells put it, "That's happening now."
As the election approaches, many business owners are closely watching how the candidates' trade policies will shape the economic landscape. Whether Trump's tariffs will disproportionately impact small businesses, or if the exceptions process will provide relief, remains to be seen. However, one thing is certain: navigating the complexities of trade policy in a potential second Trump administration could prove challenging for all businesses, especially those without the resources or political connections to secure favorable terms.
Conclusion
The debate over Trump's proposed tariffs continues to dominate discussions in the business world. While large corporations may find ways to circumvent the tariffs, small businesses fear being left behind. The uncertainty surrounding the exceptions process, combined with the potential for higher costs, could make the coming months a particularly challenging time for small importers. As businesses plan for the future, they must prepare for the possibility of a "really exhausting" period of trade negotiations and economic uncertainty.
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