Tariffs are biting small business

A toy store in Houston can’t treat a tariff like a bad weather day, because a tariff hits every shipment and keeps hitting for months. Misfit Toys told NPR that higher import costs and the uncertainty around them have pushed customers to pull back and squeezed profit on the items still selling. (vpm.org) That is the pattern showing up across small retailers and importers a year after President Donald Trump’s “Liberation Day” tariff push. National Public Radio’s reporting says owners are dealing with both the direct tax on imported goods and the harder-to-price problem of not knowing what the next order will cost. (vpm.org) The tariffs were announced on April 2, 2025, when Trump ordered double-digit import taxes on goods coming into the United States and said factories and jobs would come back. One year later, National Public Radio reported that many of those import taxes had been struck down by the Supreme Court, but the policy shock was still rippling through business decisions. (nprillinois.org) For a small business, a tariff works like a rent increase that lands only on the products you need to stock your shelves. Big chains can spread that cost across thousands of stores, but a local shop often has to choose between raising prices, shrinking margins, or ordering less inventory. (cfr.org) (vpm.org) Luis Torres, a senior business economist at the Federal Reserve Bank of Dallas, told NPR that businesses in his region were reporting increased selling prices, margin losses, and uncertainty tied to tariffs. That combination is especially rough for stores selling discretionary goods, because shoppers can delay buying a toy, a gift, or a home item when prices jump. (vpm.org) The court system is now showing the same strain in harder numbers. Epiq AACER said Subchapter V small-business bankruptcy elections rose to 833 in the first quarter of 2026 from 499 in the first quarter of 2025, a 67 percent jump. (epiqglobal.com) Subchapter V is the part of Chapter 11 bankruptcy built for smaller firms trying to reorganize instead of shutting down. The United States Trustee Program says it was created by the Small Business Reorganization Act of 2019 to give qualifying small debtors a simpler path to restructure their debts. (justice.gov) Those filings do not prove tariffs caused every bankruptcy case, because higher interest costs, weaker demand, and old debt loads can push companies into court too. But Epiq AACER also reported that total commercial bankruptcies rose 14 percent in the first quarter of 2026, which fits the picture of broad pressure on smaller firms. (epiqglobal.com) The result is that a trade policy argued in Washington is being managed at the cash register and in the warehouse. A shop owner has to decide whether to eat the tariff, pass it on, cut staff hours, or gamble on smaller orders and hope shelves do not go empty. (vpm.org) (cfr.org) That is why the damage can outlast the legal fight over the tariffs themselves. Even if some duties are rolled back or refunded later, a lost customer, a canceled order, or a bankruptcy filing in March 2026 is a real event that a small business cannot rewind. (houstonpublicmedia.org) (epiqglobal.com)