President Donald Trump’s sweeping expansion of tariffs on imported goods has upended the global trade landscape and sparked mounting concern among American businesses, both large and small, as new levies are set to take effect on August 1.
Since returning to office, Trump has implemented new tariffs on a wide array of imports, beginning with Chinese goods and quickly extending to nearly every major trading partner. As a result, most imports into the U.S. now face duties ranging from 10% to 50%, a stark contrast to the average rate of under 2.5% earlier this year.
Trump has defended the policy as a win for U.S. manufacturing, claiming it is revitalizing industry, opening foreign markets, and generating record revenue for the government. “We have the hottest country of anywhere in the world,” he said, pointing to more than $100 billion in tariff revenue collected this fiscal year.
However, the cost of the tariffs is increasingly falling on U.S. businesses. Jared Hendricks, owner of Utah-based Village Lighting Company, said the new levies forced him to take out a $1.5 million loan to absorb rising costs. “It’s been an absolute nightmare,” he said, as he struggles to pay employees and compete with larger firms racing to beat the August deadline.
Major companies are also reporting financial strain. General Motors said it has already paid over $1 billion in tariffs since April, while Tesla reported an additional $300 million in related expenses. Toymakers Hasbro and Mattel have lowered their sales forecasts, citing tens of millions in extra costs, and aerospace giant RTX warned of a $500 million hit.
Despite carve-outs for some industries, including automotive parts from Mexico and Canada, economists warn that the broader economic impact could be significant. Goldman Sachs recently estimated that the tariffs could shave one percentage point off U.S. growth this year.
“There’s this middle ground of ‘not great,’” said Ernie Tedeschi of Yale University. “And I think that is what we’re looking at with tariffs.”
For smaller firms like Earthquaker Devices, an Ohio-based guitar pedal manufacturer, the uncertainty is already weighing heavily. CEO Julie Robbins said she has delayed hiring, postponed equipment purchases, and expects to raise prices. “The current trade war policy is the largest threat to our business,” she said.
While some sectors such as domestic steel see the measures as a boon, many businesses fear the worst is yet to come, with post-August effects still rippling across supply chains and consumer markets.
“There are so many ways this could go sideways,” Robbins added.
