A stark new economic analysis reveals the Trump administration’s trade policies are extracting a heavy toll from Main Street, with small-business importers paying approximately $25,000 more per month in tariff costs since April 2025. The report, published Dec. 17 by the Center for American Progress (CAP), a left-wing think tank, details how a “chaotic approach” to trade and the elimination of key import exceptions have created a financial crisis for entrepreneurs during the critical holiday season.
According to the analysis by Michael Negron and Mimla Wardak, the administration’s “Liberation Day” tariff announcement triggered a sharp increase in duties collected from American businesses. From April through September 2025, CAP estimated, the roughly 236,000 small-business importers in the U.S. paid an average of more than $151,000 in additional tariffs compared to the same period in 2024. (CAP cited the centrist Chamber of Commerce’s research on the small-business importer sector of the economy.)
“The Trump administration’s broad, costly, and frequently shifting policies threaten to undermine one of the strongest engines of the American economy,” Negron said in a statement to Fortune. “A season of opportunity for small businesses has turned into one of uncertainty.”
The burden is not limited to larger enterprises. The report found “mom-and-pop” businesses—those with fewer than 50 employees—paid, on average, over $86,000 more per business during this six-month window than they did the previous year. The outlook for the immediate future is equally grim: CAP projects that if current monthly costs persist, the typical small business will face a tariff bill exceeding $500,000 in 2026, potentially resulting in additional layoffs, bankruptcies, and delayed investments. For the holidays, CAP concludes the tariffs are a “costly lump of coal” in American small business’ collective, proverbial Christmas stocking.
Administrative red tape stifles growth
Beyond direct financial costs, small business owners are struggling with a sudden increase in bureaucratic red tape. The administration eliminated the de minimis exception, which previously allowed low-value shipments to enter the U.S. without duties or extensive paperwork. This policy change has forced businesses to prepay new tariff rates and complete complex customs forms for millions of shipments that were formerly exempt.
Jyoti Jaiswal, founder of OMSutra, a small business selling sustainable fashion and home goods, told CAP the changes have forced her to consolidate shipments and block more capital upfront. Jaiswal noted her company now spends 10 to 15 hours on tariff-related administrative work per shipment, up from eight to 10 hours previously, preventing her from passing costs on to consumers without losing competitiveness.
Similarly, Legrand Lindor, CEO of LMI Textiles, told CAP his medical supply company went from spending zero time on tariff paperwork to spending four to five hours per transaction. Facing a 20% increase in product costs—roughly $80,000 in additional spending—Lindor was forced to scrap plans to open a new warehouse in 2025.
The rising costs appear to be cooling the labor market for small firms. Data from payroll provider ADP shows that businesses with fewer than 50 employees laid off 120,000 workers in November 2025, the highest number of small-business layoffs in five years.
While the administration claimed foreign nations would pay these costs, the report emphasizes tariffs are taxes paid by American importers. Goldman Sachs calculated that of August 2025, businesses had absorbed 51% of the cost of tariffs, though they had passed 37% onto consumers through higher prices. A survey by Small Business Majority from late 2025 indicated 74% of small-business owners are now worried about their business surviving the next 12 months.
Compounding financial pressures
The tariff crisis coincides with other financial headwinds. The report highlights the expiration of enhanced Affordable Care Act premium tax credits in 2026 threatens to double premiums for millions of entrepreneurs and small-business employees.
With the holiday season typically accounting for at least one-quarter of annual revenue for retailers, the convergence of high tariffs and administrative confusion has delivered what the report describes as “a decidedly unhappy holiday season” for the nation’s 236,000 small-business importers. Without a change in policy, these businesses face the prospect of escalating costs and reduced investment heading into the new year.
For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.
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