Business
Small businesses are being crushed by Trump’s tariffs, and economists say it’s a warning for the economy
President Donald Trump listens during a Cabinet meeting at the White House on April 30, 2025 in Washington, DC.
Andrew Harnik | Getty Images
Viresh Varma can’t sleep.
The CEO of AV Universal Corp., a small footwear company that sells through retailers like Macy’s, Nordstrom and DSW, said he needed to take out a $250,000 loan to pay his tariff bill on a container of shoes he imported from India for the holiday shopping season.
Varma didn’t have the cash on hand to pay the duties, which he said used to be around $7,500 for a similar-sized container before President Donald Trump‘s new tariffs. But without the financing, he wouldn’t have anything to sell during the holidays.
So the 64-year-old said he was faced with a choice: take on the line of credit— which came with onerous terms like weekly payments and a 32% interest rate — and raise prices to pay it back, or close the business he’s spent the last nine years building. He decided to take out the loan.
“Everybody believes that I’m a fighter, so I’m fighting it,” Varma told CNBC in an interview. “We’ve reduced some salaries. We had planned to hire some people we’re not going to hire anymore. … If things don’t look good, especially after increasing the prices, and we don’t get the sales, then obviously we may lay off some people, as well.”
AV Universal is just one of the many small businesses that are buckling under Trump’s global trade war, struggling to pay the sudden increase in duties and forecast what’s ahead as policy evolves. Businesses of all sizes have raised prices and negotiated with vendors to weather the tariff storm and many larger retailers have so far proven resilient, with minimal impact to their profitability and future growth outlooks. Better-than-expected quarterly reports have led investors to largely shrug off the tariff threat, as the S&P 500 hovers near record highs.
But the higher costs have hit smaller companies harder because they have fewer levers to pull than their larger competitors. Their margins are slimmer, their supply chains less diverse and their negotiating power with vendors dampened by the smaller sizes of their orders.
Small businesses owners interviewed by CNBC said they largely expect to be able to manage higher costs from tariffs by raising prices, but only if it doesn’t cause shoppers to buy less — which most are already starting to see.
Often called the backbone of the U.S. economy, small businesses routinely represent more than 40% of the nation’s GDP and employ nearly half of the American workforce, according to the U.S. Chamber of Commerce.
Trump says his tariffs allow the U.S. to reduce its trade deficits with other nations and encourage domestic manufacturing, but some of the small business owners who spoke to CNBC said that’s happening partially at their expense.
The struggles they’re facing could be a warning sign for the rest of the economy and bigger businesses in 2026, said Kent Smetters, a professor of business economics and public policy at the University of Pennsylvania’s Wharton School.
“The small businesses … they’re kind of like the canary in the coal mine here,” said Smetters, the faculty director of the Penn Wharton Budget Model. “They’re going to get hit first, and then I think you’re going to see more of an impact with some delay on larger businesses.”
Larger retailers have been able to manage higher tariff costs in part because they had the foresight and ability to order extra inventory before the new duties went into effect, said Smetters. At a certain point, that stock will run out and push costs higher, and those companies only have so many low-tariff countries where they can produce goods.
The fate of many of Trump’s tariffs is unclear after a federal court ruled them illegal, prompting an appeal from the White House that the Supreme Court is now reviewing. The nation’s highest court, which includes three Trump appointees and has a 6-3 conservative majority, agreed to hear the appeal on a faster-than-normal timeline with arguments scheduled for the first week of November. It’s unclear how fast the justices will issue a ruling, and the tariffs remain in effect during the appeal.
CNBC spoke with around a dozen business owners to better understand how tariffs are affecting them. Here’s how much the duties are costing some of those companies — and what the businesses are doing to offset them.
AV Universal Corp.
Total tariffs paid in 2024: $45,000
Total tariffs expected in 2025: $353,125
Employees: 10
Supply chain: India 80%, Vietnam 15%, Europe 5%
Varma, AV’s CEO, spent much of his career in corporate America before deciding to get into the footwear business about a decade ago. He built three brands from scratch that are now sold online by Amazon, Macy’s, DSW, Nordstrom and other retailers. Varma was in the process of sending orders for the 2025 holiday season — which typically accounts for about 40% of AV’s annual revenue — when Trump announced tariffs on dozens of trading partners on April 2.
Thinking the president was bluffing, Varma placed an order for 20,000 pairs of shoes from his manufacturer in India, but ultimately only shipped half because he couldn’t line up the financing necessary to pay the expected tariff bill on the entire order. Varma expects holiday sales to drop about 30% because he’ll have less inventory to sell, but that decline could get worse if consumers balk at the higher prices he implemented. Since he increased prices earlier this year, sales fell about 30% in August and September.
Varma has searched across the globe to escape the Trump administration’s 50% tariff on Indian goods and is now considering moving his manufacturing to China, as long as Trump walks back his latest threat to raise tariffs on Chinese imports to 100%.
Talus Products
Total tariffs paid in 2024: ~$223,000*
Total tariffs expected in 2025: ~$499,000*
Employees: 9
Supply chain: primarily China
*The figures are adjusted for order volume
Talus Products co-founder and CEO David McClees (middle left) pictured with his team during the holidays.
Handout
David McClees, co-founder and CEO of Talus Products, opened his business 38 years ago with a single product: an inflatable travel pillow. The company has since expanded into a range of items, including car organizers and other travel accessories, that it distributes through retailers like The Container Store, Amazon and airport gift shops.
McClees said he’s not worried about having to shut down operations, but said he expects tariffs to put a “severe crimp” in his annual profitability. The company raised prices on certain products to offset tariffs, but is waiting until January to hike again, partially over concerns it could dampen consumer demand during the holiday shopping season. Sales on Amazon, which account for more than half of Talus’ revenue, have already been “soft” in recent weeks, he said.
“We’re nervous,” said McClees. “We don’t typically offer huge discounts on Prime Day, but we do see a bump from their increased traffic, and that was smaller than what we would normally see. It seems like buyers are being very cautious.”
McClees attempted to move some of Talus’ production to Mexico and Vietnam, but said he ultimately decided it was too expensive.
Village Lighting
Total tariffs paid in 2024: less than $50,000
Total tariffs expected in 2025: at least $1 million
Employees: between 11 and 17, depending on season
Supply chain: 50% spread across Vietnam, Cambodia, Indonesia, Myanmar and Thailand, the other 50% in China
Village Lighting CEO Jared Hendricks (center, pictured in white) with his wife, children and son-in-law.
Handout
Jared Hendricks, founder and CEO of Village Lighting, started his business 20 years ago making Christmas lighting and decorations before expanding into holiday storage, selling directly to consumers via his website and through big-box stores like Walmart and Target. Since his business is centered around the holidays, his buying and cash flow needs are unique compared with others in the retail industry.
Every year, just before Christmas, he said he uses a $2 million line of credit he took out against his home to buy the inventory he needs for the following year’s holiday and then uses that eventual revenue to pay back the debt. This year, he had to use that line of credit to pay his tariff bill.
“Hopefully I can turn around and mark things up enough for people to buy them from me so I can pay back my tariff debt,” said Hendricks. “It’s to the point now where it could kill us, it could take us down, and I could lose everything. I can’t afford to not bring stuff in because I’ll have nothing to sell. So that’s a game over scenario.”
Because of Village Lighting’s unique buying schedule, the company had to take a loss on about 40% of its annual sales because the orders and pricing were already contractually agreed upon when many of the new duties went into effect. Hendricks said he hopes to make it up by raising prices on his website and wholesale customers. Sales so far this season have been down between 8% and 10% and he owes millions of dollars to his suppliers, who have agreed to accept late payments. Hendricks said the situation has created massive stress for him and his wife, adding that the challenges the Covid-19 pandemic posed to his business feel like “a piece of cake” compared with now.
“I call them my demons. They’re my two or three o’clock in the morning demons, where they just wake me up in a panic, like, ‘how am I going to pay for this? Or how am I going to make this work? What have I done? Should I have quit last April and just cashed in?'” said Hendricks. “Being a small business owner isn’t worth it when your country turns on you.”
Picnic Time
Total tariffs paid in 2024: $950,000
Total tariffs expected in 2025: $2.25 million
Employees: 75
Supply chain: 85%-90% in China, the remainder in India
Picnic Time CEO Paul Cosaro, shown in a gray shirt, with his family outside of the company’s headquarters.
Handout
Paul Cosaro’s family business, Picnic Time, was started 43 years ago by his father, an Italian immigrant on a mission to sell high-quality picnic baskets. The company now sells a wide range of products, from coolers to beach chairs, to major retailers like Kohl’s, Target and Macy’s. Since Trump’s new tariffs went into effect, Picnic Time had to freeze hiring and capital expenditures, limiting its ability to produce and release new products, Cosaro said.
“It absolutely has stifled innovation,” he said. “You don’t want to take risks anymore … there’s no room for error.”
Cosaro said he attempted to move his supply chain to other countries during Trump’s first term, hiring additional staff and conducting sourcing missions in India and Mexico. But years later, he was only able to move about 10% of production. He said he raised his prices earlier this year to account for the new tariffs and the third quarter has so far been “very, very, very soft.” Sales are down about 20% and key retailers have pulled back on orders. The holiday season is always important to Picnic Time, as it accounts for about 35% of annual revenue, but this year it feels like the company is putting “all of our eggs in one basket,” said Cosaro.
“For us, it’s critically important,” he said. “We’re literally going to be waiting until the last day of the year to find out if this is going to be a profitable year or not.” For now, Cosaro said he will keep his supply chain primarily in China. He’s considered moving some of it to the U.S., but said he doesn’t have the budget available to take the risk.
Citibin
Total tariffs paid in 2024: $67,883
Total tariffs expected in 2025: $380,000
Employees: 8
Supply chain: 90% Vietnam, 5% China, 5% U.S.
Frank Picarazzi, the chief operating officer of Citibin (left) with his wife Liz Picarazzi, the company’s founder and CEO (right).
Courtesy: Frank Picarazzi
When Liz Picarazzi first started Citibin, which makes rat-proof trash enclosures for cities, parks and homes, the company manufactured in the U.S. After a few years, she said she found U.S. producers couldn’t meet her expectations on price, quality or lead time. She moved production to China and for several years, the business enjoyed manageable tariffs and reliable partners. However, in the lead-up to the 2024 election, she and her husband Frank Picarazzi, Citibin’s COO, started looking for other options over concerns that either candidate would raise tariff rates.
“I told Frank two days after the election, ‘we’re going to Vietnam, like, as soon as we can,'” Liz Picarazzi said.
The couple spent the next few months moving most of their production to Vietnam, only to learn of Trump’s decision to raise tariffs on all aluminum and steel imports to 50%. That raised costs for just about every product Citibin sells. Though her supply chain is now more diversified, Liz Picarazzi said that moving to Vietnam was “somewhat pointless” as a result.
Meanwhile, she said higher costs are affecting talent retention, research and development, and revenue. The company has added a 15% tariff surcharge to products to offset the cost of tariffs. Frank Picarazzi said it has contributed to a 25% decline in sales to homeowners, which the company expects will account for about 50% of overall revenue this year.
Reekon Tools
Total tariffs paid in 2024: $65,000
Total tariffs expected in 2025: more than $400,000
Employees: 20
Supply chain: Malaysia, Thailand, Vietnam and China
Christian Reed, founder and CEO of Reekon Tools, on a job site holding the T1R Hybrid Laser Tape Measure
Handout
Research and development is critical for Christian Reed’s tool startup Reekon. He said the company had to cut back R&D spending by 20% because of tariffs.
“This certainly put a thorn in the side of our hiring plan for the rest of the year around engineers for R&D activities,” said Reed. “That’s something that will continue to have to either be paused or completely canceled if nothing changes.”
The hundreds of thousands of dollars Reed planned to use to hire between three and five designers and engineers is now going to tariffs instead, he said. The company, which makes innovative products like digital tape measures for tradespeople, needs to ensure every tool it produces is effective and able to withstand tough conditions on worksites.
“There’s a unique combination of making a product that you can feed up, throw on the concrete, you know, slam around and not break, and at the same time add this digital aspect,” said Reed. “So that puts a very high burden on the testing, the research we have to do … it’s a very costly product as most of the products we’re making are new to [the] world.”
Reed said he’s avoided raising prices on most items, choosing to take the hit to profit margins, but recently increased the price of a new tool – a smaller version of its digital tape measure. Initially, Reekon wanted to price it at $99 and while the margins would’ve been slim, the company expected to be able to make it up in volume, Reed said. However, after tariff rates rose, the company priced it at $119 when it launched in September to help it offset losses in other parts of the business. While the product has been well received, sales so far have fallen short of the company’s projections.
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Gold and silver sales alone accounted for an astonishing Rs 60,000 crore of the total trade, registering a robust 25% increase from last year’s value
Gold prices have soared by approximately 60% year-on-year, crossing the Rs 1,30,000 per 10-gram mark. (Representational image/News18)
Indian consumers defied a massive surge in prices to spend an estimated Rs 1 lakh crore on Dhanteras this year, showcasing the festival’s undiminished cultural and economic significance. According to the Confederation of All India Traders (CAIT), this massive spending spree marks a significant festive boost, with strong consumer confidence overriding high-cost pressures.
The driving force behind this record expenditure was the traditional purchase of precious metals. Gold and silver sales alone accounted for an astonishing Rs 60,000 crore of the total trade, registering a robust 25% increase from last year’s value. This surge is particularly striking given the steep rise in bullion costs: gold prices have soared by approximately 60% year-on-year, crossing the Rs 1,30,000 per 10-gram mark, while silver prices have also jumped by roughly 55%.
CAIT attributed this resilient demand to the deep-rooted Indian belief in precious metals as the most secure form of investment and an auspicious purchase on Dhanteras, the day that marks the beginning of Diwali celebrations. While volumes may have seen a slight dip, the rise in value was substantial, as many consumers opted for strategic buying—favouring lightweight jewellery, gold coins, and bullion for investment purposes to fulfill the shagun (auspicious tradition).
Beyond bullion, the festive purchasing extended across various sectors, underlining a broad economic recovery. Other major contributors to the Rs 1 lakh crore total included utensils and kitchen appliances (estimated at Rs 15,000 crore), electronic and electrical goods (Rs 10,000 crore), and vehicles, textiles, and decorative items.
The festive spending also received a further boost from the popularity of the “Vocal for Local” campaign, with consumers showing a clear preference for Indian-made products, benefiting small traders and local manufacturers across the country.
Pathikrit Sen Gupta is a Senior Associate Editor with News18.com and likes to cut a long story short. He writes sporadically on Politics, Sports, Global Affairs, Space, Entertainment, And Food. He trawls X via …Read More
Pathikrit Sen Gupta is a Senior Associate Editor with News18.com and likes to cut a long story short. He writes sporadically on Politics, Sports, Global Affairs, Space, Entertainment, And Food. He trawls X via … Read More
October 18, 2025, 22:34 IST
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Business
Dhanteras turns record-breaking! Cars, electronics and jewellery see unprecedented demand; GST cuts, festive spirit fuel purchases – The Times of India
Dhanteras 2025 is turning into a record-breaking festival for Indian retailers, with strong demand across automobiles, electronics, and jewellery.Maruti Suzuki India expects to cross the 50,000-unit mark over the two-day festival, marking its highest-ever Dhanteras sales, said senior executive officer, marketing & sales, Partho Banerjee. “We are expecting around 41,000 deliveries today, with another 10,000 customers taking delivery tomorrow. This is going to be the all-time high for Dhanteras deliveries,” he told reporters. As per news agency PTI, Banerjee added that since the September 18 price reduction, the company has received nearly 4.5 lakh bookings, with small car bookings approaching one lakh units and retail deliveries reaching 3.25 lakh units in a month.Rival Hyundai Motor India Ltd MD & CEO designate Tarun Garg noted strong festive demand, with expected deliveries around 14,000 units, a 20 per cent increase from last year.“The positive momentum is driven by the festive spirit, a buoyant market environment and the encouraging impact of GST 2.0 reforms,” he said, as per PTI.Consumer electronics firms are also reporting a surge in sales. Panasonic Life Solutions director Sandeep Sehgal said large-screen TVs of 55 inches and above contributed to a 4K sellout growth of over 36 per cent from October 1 to 17, with overall TV and RAC sales expected to grow around 30 per cent compared to last year. Haier Appliances India reported strong demand for premium products such as large-screen TVs, side-by-side refrigerators, and front-load washing machines, with growth expected to exceed 50 per cent.The companies attributed the boost partly to the recent GST reforms, which reduced duties on electronics and essential goods, leaving more disposable income with consumers.Jewellery retailers also saw healthy festive sales, spanning investment-driven purchases above Rs 2 lakh to lightweight jewellery and gold coins, Tanishq senior vice president Arun said.Demand was robust across metros and Tier-2 and Tier-3 towns.Overall, the festival is witnessing an unprecedented consumer turnout, reflecting optimism fueled by GST rate cuts and the convenience of festive shopping across multiple categories, from cars and electronics to gold and jewellery.This year’s Dhanteras demonstrates a broad-based consumption surge, with both traditional purchases like gold and modern categories like automobiles and electronics benefiting from economic reforms and festive enthusiasm.
Scottish Greens will “call out the lies of big polluters”, co-leader Gillian Mackay said as she branded plans to develop the Rosebank oil field as “pure climate vandalism”.
Ms Mackay spoke out as demonstrators opposed to drilling the site gathered in London on Saturday.
Plans to develop the North Sea field – which is estimated to contain up to 300 million barrels of oil – have been submitted again by owners Equinor.
However, Ms Mackay told the Scottish Green Party conference in Edinburgh: “We have to be the party that calls out the lies of big polluters.”
Ms Mackay, who was elected co-leader with fellow MSP Ross Greer in August, told her fellow Scottish Greens: “Drilling for new oil and gas in fields like Rosebank will do nothing to lower energy bills or protect our planet.
“It is pure climate vandalism and we have to stop Rosebank.”
Development of the oil field, which lies 80 miles west of Shetland, had been approved by the Conservative government in 2023 but that decision was challenged in the courts in the wake of a Supreme Court ruling which said the emissions created from burning fossil fuels should be considered when granting permission for new drilling sites.
Her comments came as Zack Polanski, leader of the Green Party of England and Wales, insisted the UK is “one of the most nature depleted countries in the world”.
Addressing protesters in London, Mr Polanski said: “The very least this Government need to do is to stop making things worse.”
Ms Mackay also used her conference speech to hit out at the UK Government over the closure of Scotland’s only oil refinery in Grangemouth.
Hundreds of jobs were lost after owners Petroineos closed the refinery earlier this year, with Ms Mackay, who grew up in the area saying: “I’m sick of governments and corporations using tags like ‘just transition’ as a cheap slogan.
“What happened in Grangemouth is not a just transition.
“Our communities don’t need empty words, words don’t pay the bills, or put food on the table.
“They need real plans to provide real jobs and real opportunities.”
Ms Mackay insisted: “That site could have been saved. Labour promised to save it – they promised £200 million – and the message from the workers is clear: show us the money.”
She said that the Grangemouth plant “could have been nationalised”, adding: “We cannot leave the future of our communities in the hands of billionaires who are all too happy to abandon us when the money dries up.”
With the Scottish Greens having set the target of overtaking Labour in May’s Holyrood ballot, Ms Mackay said her party was “on the verge of a historic election” with the “chance to elect more green voices than ever before”.
She also told how the birth of her first child, Callan, in June meant she had “never felt more committed to building a greener Scotland”.
She joked that she was speaking at Saturday’s conference “in relatively one piece, without too much baby dribble on me” as she said the Green model, with two co-leaders at the helm, had allowed her to take on the challenge.
“In other parties there would have been a whole load of barriers to a new mum being elected to a leadership role,” Ms Mackay said.
“It is only because of our co-leadership model and the support of ordinary members, I have been afforded this opportunity.”
She continued: “The support I have had says something about our party and the values we stand for.
“When I think about the country I want us to be, it is one where we support each other, one where we lift each other up and one where we do things differently.”
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