U.S. Chamber of Commerce pushes for tariff reform to support small businesses

Tariff policy uncertainty continues to weigh heavily on America’s small businesses, according to Tom Sullivan, vice president of Small Business Policy at the U.S. Chamber of Commerce. In today’s episode of U.S. Chamber of Commerce Small Business Update, he outlines how these trade-related pressures are disrupting growth plans for many entrepreneurs and calls on policymakers to take decisive steps that would ease the burden on this critical segment of the U.S. economy.

Sullivan emphasizes that while many associate international trade with large corporations, 97% of the approximately 220,000 to 230,000 U.S. importers are small businesses. More than half of those have fewer than 50 employees. These firms collectively account for nearly a third of the total value of all U.S. imports. The ripple effects also extend to domestic manufacturers. Some small manufacturers sourcing materials domestically, like steel, are still experiencing significant cost increases, up to 17% in some cases, even when those materials do not cross borders.

“Small businesses, according to data and the economy, are doing pretty well. But it still begs the question: Why are we making it so darn hard for small businesses to be successful?”

This widespread impact has prompted the Chamber to advocate for an automatic tariff exclusion for small businesses. The goal is to give owners the time and certainty they need to plan and grow. Sullivan also urges the administration to pursue new free trade agreements that can provide small businesses with more sourcing options, especially as they work to shift away from Chinese suppliers and potentially reshore production to the United States.

One example Sullivan highlights is Murphy’s Naturals, a North Carolina-based company that originally sourced all ingredients from China. Over the course of six to eight years, the company transitioned to domestic suppliers and is on track to have 100% of its essential oils manufactured in-house by next year. The founder is also poised to become the country’s sole domestic producer of incense sticks, a product previously reliant on overseas manufacturing.

In addition to trade policy, Sullivan warns of a potential year-end tax hike for small businesses if Congress does not extend key pro-growth tax provisions. He notes that the Chamber is working closely with the White House to prevent that outcome. Small businesses, he says, are aligned with the goal of reshoring manufacturing but need both time and trade alternatives to make the transition sustainable.

The travel and tourism sector has also felt the effects of recent trade tensions and policy shifts. Businesses in destinations like Park City, Utah, have seen declines in reservations due to international disputes, including with Canada and Mexico, even before new travel restrictions were imposed.

To help small businesses navigate these challenges, Sullivan recommends two strategies: leaning into peer networks to stay current on tariff changes and sharing their stories with advocacy groups like the Chamber. The more real-world examples policymakers hear, he argues, the more likely they are to create solutions that support small business growth.

Despite the headwinds, Sullivan maintains that now is still a good time to start a small business in the U.S., especially for entrepreneurs solving meaningful problems. He points to record-high startup activity as a sign that the entrepreneurial spirit remains strong, even amid uncertainty.