Navigating the Impact of Recent U.S. Tariffs on North American Trade
How Small and Mid-Sized Businesses Can Adapt and Support Each Other Locally
In early February 2025, the U.S. administration announced sweeping tariff measures, imposing a 25% tariff on all steel and aluminum imports—including those from Canada and Mexico—as well as 10% tariffs on Chinese goods. While the stated goal is to protect domestic industries, these measures introduce significant challenges for small and mid-sized businesses (SMBs), which often lack the financial buffers and global networks of larger corporations. Obviously, SMBs don’t want to pass on the costs to their customers, but it’s likely that they will have to in order to stay afloat. Take the owners of Denver Concrete Vibrator, for instance, who spoke to the AP recently. They’ll be losing money in the short term in order to not raise prices every time the cost goes up for materials.
Rather than viewing this as an insurmountable challenge, SMBs can leverage strategic planning and local collaboration to mitigate the impact - though there WILL be impact. Let’s explore the specific risks SMBs face, proactive strategies for adaptation, and ways to strengthen local markets through business partnerships.
How Tariffs Impact Small and Mid-Sized Businesses
Tariffs act as a hidden tax that increases costs for businesses reliant on imported materials. While large corporations may have the resources to absorb these costs or shift production elsewhere, SMBs are often left with fewer options. Obviously, most businesses would buy domestically or locally if it was feasible, but especially for smaller businesses, buying internationally is usually the better return.
Here’s where they will feel the pressure most:
1. Rising Costs of Goods and Materials
Industries such as manufacturing, construction, and automotive—which heavily rely on steel and aluminum—will see material costs spike by up to 25%.
These costs then have to either be absorbed by the business or passed on to the customer.
Small businesses in consumer goods, packaging, and electronics that source from China may struggle with supply chain disruptions.
This will delay shipping, or cut out entire products from eligibility for sale based on cost and availability. Some small businesses will have to shift their offerings, or restructure their products entirely.
2. Tighter Profit Margins
Many SMBs work on thin profit margins and cannot easily pass these costs onto consumers without losing competitiveness or straining their relationships with their current customer-base.
Businesses locked into long-term contracts at fixed prices may experience financial strain, as some may not be able to absorb rising costs like larger competitors.
3. Potential Retaliatory Tariffs from Trading Partners
Canada and Mexico are among the largest buyers of U.S. goods. If/when they impose retaliatory tariffs, SMBs that export to these markets could see sales decline.
Agricultural, food, and beverage industries—especially craft breweries and specialty food producers—could be among the hardest hit. And that’s just scratching the surface with the tariffs in play at the present, not in the future.
4. Supply Chain Disruptions
The lack of predictable pricing and stable sourcing forces SMBs to make difficult decisions about inventory, staffing, and long-term planning.
Expect to see restructuring of people, resources, and process.
Many businesses do not have backup suppliers or the ability to absorb high freight costs associated with alternative sourcing.
Proactive Strategies: How SMBs Can Adapt and Stay Competitive
Instead of waiting for the effects to settle in, small businesses can take action now to strengthen resilience.
1. Localize Your Supply Chain
Explore regional suppliers for raw materials and components to reduce exposure to tariffed goods.
Partner with local manufacturers and fabricators that are willing to offer competitive pricing.
Work with co-ops and industry groups to find bulk-buying options that reduce costs.
Weigh the pros and cons of higher costs from buying and sourcing domestically/regionally/locally versus by enforced tariff.
2. Review Pricing and Contracts
If possible, renegotiate contracts with vendors to account for price fluctuations.
Consider adjusting pricing models with a value-added approach rather than just increasing costs to consumers.
Offer subscription-based pricing or bundled services to maintain revenue stability.
3. Strengthen Local Business Collaboration
Establish partnerships with other SMBs to share resources and negotiate better bulk pricing.
Work with local economic development groups to access grants, funding, or tax incentives.
There may even be room for bartering agreements in regard to services and resources.
Support other small businesses by sourcing locally whenever possible.
4. Diversify Revenue Streams
If your business relies heavily on tariffed imports, consider expanding service-based offerings that don’t depend on raw materials.
Identify new markets that are not impacted by retaliatory tariffs.
Embrace e-commerce and digital services to expand customer reach without increasing material costs.
5. Engage in Policy Advocacy
Stay informed* and engage with local chambers of commerce to voice concerns about how tariffs impact SMBs.
Participate in industry coalitions that advocate for tariff relief or exemptions for small businesses.
Staying informed is the single most proactive thing you can do for yourself and your business. I encourage you not to live in a bubble - look at all news sources, from all regions, and all industries. Keep up to date as much as you can without burning yourself out on external information. Talk with other business owners and friends and family to also get their perspectives.
How We Can Support Each Other Locally
The best way to mitigate economic uncertainty is through community-driven solutions. Here are some ways we can help each other in our local markets:
Buy from local manufacturers, artisans, and service providers whenever possible.
Encourage B2B networking among small businesses to find shared solutions.
Use social networking sites to connect and collaborate.
Organize industry roundtables or meetups to discuss local sourcing options and business strategies.
Advocate for local government support—such as grants or tax credits—to ease the burden on SMBs affected by tariffs.
By focusing on collaboration, innovation, and strategic planning, small and mid-sized businesses can weather the impact of tariffs and emerge stronger. While these trade policies may create short-term hardships, they also present opportunities to rethink supply chains, strengthen local economies, and build lasting business partnerships.
Final Thought: Resilience Through Smart Business Strategies
The impact of tariffs is not just a policy issue—it’s a business issue, and further down the line a consumer issue.
Just like any other market disruptor, SMBs that adapt early, collaborate with local partners, and explore creative solutions will be the ones that thrive despite economic shifts. Now is the time for businesses to lean on each other, support local industries, and create a more resilient marketplace.
Additional Sources:
apnews.com
Trump readies matching tariffs on trade partners, possibly setting up a major economic showdown
theguardian.com
Canada, Mexico and EU criticise Trump's metal tariffs amid fears of trade war
businessinsider.com
Trump moves ahead with 25% tariffs on all steel and aluminum imports, escalating trade tensions