In the runup to the one-year anniversary of President Donald Trump’s April 2, 2025, “Liberation Day” tariffs announcement, in which he promised to “supercharge our domestic industrial base,” the signs are unmistakable that the administration’s tariff strategy has failed to revive manufacturing while sticking the nation’s small businesses with a hefty bill. The “Liberation Day” tariffs followed initial tariffs levied by the Trump administration in March 2025, bringing the nation’s average effective tariff rates to levels not seen in decades. New analysis from the Center for American Progress finds that the tariff bills for small-business importers tripled over the most recent 12 months (from March 2025 through February 2026), compared with the previous 12 months (March 2024 to February 2025). CAP analysis finds that since the Trump administration began implementing its failed trade agenda, the average small-business importer paid $306,000 more in tariffs over the most recent period. Tariffs are raising costs for small businesses in each of the 50 states and the District of Columbia—underscoring the nationwide burden that the Trump administration’s trade policies are placing on small businesses.
Despite cost increases for small businesses, the president touted his tariff agenda during his State of the Union address in February as beneficial for Main Street America, saying that tariffs are paid by foreign countries. However, in survey after survey, small businesses are telling a different story. According to the Federal Reserve’s Small Business Credit Survey, rising costs remain the most frequently cited financial challenge for firms. More than 4 in 10 report that tariff-related price increases are affecting their operations, often forcing businesses to either absorb higher input costs or pass them on to customers, consistent with research showing that roughly 90 percent of the tariff costs in 2025 were ultimately borne by U.S. importers and consumers rather than foreign exporters.
Small-business importers paid the cost of Trump’s trade policies and tariff hikes
On “Liberation Day,” Trump announced the most sweeping tariff hikes in decades, effectively launching a global trade war against almost every country—with consequences that reverberated far beyond foreign economies and into America’s main streets. These tariffs added to those the administration imposed starting in March 2025, subjecting many imports from Canada and Mexico to 25 percent duties, with the exemption of U.S.-Mexico-Canada Agreement-qualified goods. Additionally, in March 2025, the Trump administration imposed tariffs under Section 232 that targeted specific industries such as steel and aluminum.
Tariff revenue surged sharply beginning in April 2025 as the Trump administration’s massive country-specific tariffs took effect. Customs duties increased into summer 2025, exceeding $30 billion per month from August 2025 into the new year. (see Figure 1) While these tariffs generated a dramatic increase in federal revenue, much of the cost was borne by U.S.-based importers—many of them small businesses that rely heavily on imported goods and components.
In February 2026, the U.S. Supreme Court ruled these tariffs illegal, finding that the administration lacked authority to impose them under the International Emergency Economic Powers Act. However, the president doubled down on his tariff strategy after the Supreme Court struck down his “Liberation Day” tariffs in February by ordering a sweeping 10 percent tariff, with his administration previewing raising it to 15 percent. The 10 percent rate will be in effect for 150 days under Section 122 of the Trade Act of 1974 while the administration works to impose a more lasting set of tariffs under Section 301 of the same act.
Small businesses are vital to the national economy, employing almost half of all American workers and generating about 1.2 million new jobs in 2025. Of the 36.2 million small businesses, roughly 236,000 are small-business importers that account for approximately 31.65 percent of the known value of U.S. imports. (see Methodological Appendix) About 97 percent of all U.S. importers are small businesses.
Small-business importers paid an average of $306,000 more per business in tariffs, or an average of $25,000 more in tariff costs per month.
CAP estimates that these 236,000 small-business importers paid a substantial share of the tariff increases following the “Liberation Day” tariff announcement. Based on the $227.9 billion increase in tariff revenue over the most recent 12 months compared with the prior 12 months, small-business importers paid an average of $306,000 more per business in tariffs, or an average of $25,000 more in tariff costs per month. (see Methodological Appendix) The burden varied by firm size: Mom-and-pop businesses (those with fewer than 50 employees) paid about $175,000 per firm between March 2025 and February 2026, compared with March 2024 to February 2025.
Monthly tariff payments by small-business importers have tripled since early 2025, indicating that the Trump administration’s higher tariff rates have significantly increased the cost burden on importers. From March 2025 through February 2026, small-business importers paid an average of $441,000 across all tariffs, or about $37,000 per month. Figure 2 illustrates the average monthly tariff costs—across all U.S. tariffs—paid by small-business importers from January 2024 through February 2026. These added costs are placing new pressure on local economies, increasing prices for producers and consumers while creating new barriers for small businesses already operating on thin margins.
High tariff costs threaten local economies nationwide
Small-business employers are vital to state economies, with nearly half of the workforce in most states employed by a small business. In 15 states, this share rises to more than half of the workforce employed by a small business. As small businesses struggle to shoulder the added costs of the Trump administration’s tariffs, business owners nationwide are being forced to make hard decisions about how to balance them. As small businesses struggle under economic uncertainty and higher costs, many have been forced to raise prices or cut back on hiring or expansion, which will greatly affect the health of local economies. A March 2026 survey from Small Business Majority reveals that input costs have increased as well, with more than half—53 percent—of small businesses experiencing increased costs from suppliers, and almost half—47 percent—reporting an increase in costs for materials or products.
The average small-business importer in Kentucky, Michigan, and Tennessee is paying more than an estimated $650,000 in additional tariffs compared with the prior 12 months.
The increase in small-business importers’ tariff payments by state from March 2025 to February 2026, based on CAP analysis of the value of states’ imports and the number of small-business importers, is shown in Table 3. (For details, see Methodological Appendix) For example, the average small-business importer in Wisconsin paid $272,000 in additional tariffs from March 2025 to February 2026 compared with the 12 months prior. In 15 states, small-business importers are paying more than the national average in additional tariff costs. The average small-business importer in Kentucky, Michigan, and Tennessee is paying more than an estimated $650,000 in additional tariffs compared with the prior 12 months. Notably, these three states’ economies rely heavily on manufacturing industry—which is struggling under Trump’s tariffs—and are among the most reliant on imports, with almost one-third of Kentucky’s gross domestic product stemming from imports.
Conclusion
Despite promises that tariffs would lead to economic gains, the Trump administration’s tariffs have instead slammed small businesses and consumers with higher costs. The average small-business importer has paid $306,000 more in tariffs from March 2025 to February 2026 compared with the prior 12 months. While this amount varies by state, the data emphasize that small-business importers are faced with higher tariff costs; in some states, the average small business paid hundreds of thousands more in tariffs due to the Trump administration’s policies. Small businesses are not just facing higher import costs: Small-business bankruptcies increased by 11 percent in 2025, underscoring the financial struggles small businesses are facing in the Trump administration’s economy.
These economic headwinds for the nation’s small businesses have not deterred the Trump administration from imposing a new set of temporary, across-the-board tariffs with a goal of making them permanent via existing authorities, following the Supreme Court invalidation of the “Liberation Day” tariffs. This new round of tariffs will only ensure that small businesses continue to bear the burden of the administration’s trade policies at a time when U.S. entrepreneurs are looking for solutions to lower their costs.
The authors would like to thank Sara Estep, Corey Husak, Ryan Mulholland, Emily Gee, Lily Roberts, Colin Seeberger, Jazmine Amoako, and Amina Khalique for their reviews and feedback, as well as the CAP story, Bill Rapp, Christian Rodriguez, Nicole Piper, and Audrey Juarez for their guidance. The authors would also like to thank Small Business Majority, Small Business For America’s Future, and the small-business owners whose tariff stories are referenced in the column.
Appendix: Methodology
The authors used tariff revenue data from the U.S. Treasury Daily Treasury Statement. Daily tariff revenue figures were aggregated by summing the values within each calendar month to construct monthly tariff revenue totals. Daily treasury statements recorded tariff revenue as collections from “DHS – Customs and Certain Excise Taxes”
from September 30, 1998, to November 7, 2025. Beginning on November 10, 2025, tariff revenue was categorized as “DHS – Customs Duties, Taxes, and Fees.” For this analysis, the authors used both categories to find the monthly tariff revenue. These monthly values were then aggregated into two consecutive 12-month periods for comparison. The comparison periods were selected to align with the implementation of the Trump administration’s new tariffs in March 2025. Tariff revenue collected between March 2025 and February 2026 was then compared with the preceding 12-month period of March 2024 to February 2025 to estimate the increase in tariff revenue associated with the policy change.
To estimate the share of tariffs paid by small-business importers, the authors used the most recent data from the U.S. Census Bureau report “A Profile of U.S. Importing and Exporting Companies, 2022–2023.” In this CAP article, small-business importers are defined as importing firms with fewer than 500 employees. Using the U.S. Census Bureau’s measure of “known value”—the portion of U.S. imports that can be matched to identified companies—small-business importers account for 31.65 percent of identified importer-reported import value. State-level estimates were calculated by applying the national small-business import share (31.65 percent) to each state’s reported value of known imports. Each state’s estimated small-business import value was then divided by the total national import value to determine that state’s share of small-business imports.
For analytic purposes, the number of small-business importers (firms with fewer than 500 employees) was estimated by allocating the national total of small-business importers (236,000 firms) across states based on each state’s share of total importers. This ensures that state estimated counts of state small-business importers sum to the national total of small-business importers. The total number of small-business importers includes data from Puerto Rico and the U.S. Virgin Islands, but the authors did not include these data in the map. The authors elected to use this method to avoid overestimating the number of small-business importers across states due to data limitations, as the Census Bureau state data count multistate importers in every state in which they are present. The state shares of small-business importers were then used to allocate the estimated $227.9 billion increase in tariff revenue between March 2025 and February 2026, and between March 2024 and February 2025 across states. The resulting state-level additional tariff cost was divided by the estimated number of small-business importers in each state to calculate the average tariff increase per small-business importer.