Update: How SMBs Feel About Tariffs

We just closed a survey of 500 SMBs to find out how they feel about the tariffs that have already been enacted and that may yet happen. This is an update to a similar survey that we fielded two months ago.

SMBs still have mixed, if now more negative, feelings about tariffs. For example, roughly half of SMBs agree somewhat or strongly that tariffs will hurt their business. At the same time, a similar percentage support tariffs as a way to protect domestic industries.

Specifically, 51% of very small businesses (VSBs, with 1-19 employees), 59% of small businesses (SBs, with 20-99 employees) and 61% of midsized businesses (MBs, with 100-1,000 employees), agree that tariffs will have a negative effect on their business. Sentiment appears to be moving away from tariffs; these percentages were 44%, 54% and 51%, respectively, in our last survey.

Tariffs will have a negative effect on my business

While VSBs remain less concerned about the impact of tariffs on operating costs than SBs and MBs, concerns have grown from 53% of VSBs, 69% of SBs and 70% of MBs two months ago to 61%, 72% and 74% respectively now.

Tariffs will increase our operating costs

We added a new question in this survey on the expectation that tariffs will cause layoffs. 25% of VSBs expect to let staff go because of tariffs, increasing to a significantly higher 37% of SBs and 49% of MBs.

We expect to make layoffs as a result of tariffs

Support for tariffs to protect domestic industries is significantly higher among SBs and MBs than VSBs. However, it has softened among MBs since our last survey, dropping from 68% to 61%.

I support tariffs as a way to protect domestic industries

More than half of respondents agree that tariffs hurt small businesses more than they hurt larger businesses: 60% of VSBs, 73% of SBs, and 69% of MBs agree – up from 52%, 68% and 59% two months ago.

Tariffs hurt small businesses like mine more than they hurt larger companies

Not surprisingly, larger SMBs are much better positioned to weather tariffs. 48% of VSBs agree their business is well-prepared to absorb the costs of tariffs, versus 64% of SBs and 72% of MBs. VSBs and SBs have been preparing for tariffs; these numbers are up from 38% and 55% respectively in our last survey (MBs are unchanged).

My business is well-prepared to absorb the additional costs resulting from tariffs

Likewise, larger SMBs are much more likely to be exploring supply chain changes to reduce the impact of tariffs. 40% of VSBs are looking into supply chain evolution, versus 72% of SBs and 78% of MBs. SMBs across the board have realized the need to evolve their supply chains; these percentages are up from 34%, 63% and 73% in our last survey.  

We are actively exploring changes to our supply chain in response to potential tariffs

Over half of SMBs expect to pass some or all tariff costs on to their customers, with larger companies more likely to pass them on: 52% of VSBs, 69% of SBs, and 72% of MBs plan to share the pain. Many more VSBs plan to pass cost increases along now than two months ago, when only 39% planned to.

We expect to pass some or all price increases resulting from tariffs on to our customers

Over half of SMBs see tariffs causing structural changes to their industry. 58% of VSBs, 67% of SBs and 71% of MBs agree that tariffs will lead to long-term changes. VSBs have become more concerned about these changes in the last two months (50% then versus 58% now), while MBs are slightly less concerned (78% versus 71%).

Tariffs will lead to long-term changes in our industry

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