The backbone of the economy being hurt by tariffs
Impact on tariffs to American small businesses
99.9% of the businesses in US are small businesses
45.9% of Americans are employed by a small business
Small businesses account for over 43% of US GDP. And significant portion of small businesses rely on India, China, Indonesia, Vietnam imports. These countries continue to face massive US tariffs that are driving small American companies to the brink.
Let me take two American companies examples to demonstrated the impact. AV Universal Corp. and then Village lighting, both saw their tariff bill increase by over 700%. Directly impact their survival.
AV Universal Corp., an American shoe company with 10 employees and a few million in annual revenue.
- 80% of their supply comes from India; 15% from Vietnam; 5% from Europe.
Being in business for over a decade, selling three brands on Amazon and other stores.
After the last tariff increase, they couldn’t afford the full import cost and cut their orders in half. With less inventory, revenue is expected to drop 30%, while rising prices could lead to an unsupported demand.
To this specific company tariff breakdown:
India: 10% reciprocal tariff + 26$ India-specific tariff + 25% secondary tariff on India goods
Vietnam: 20% reciprocal tariff + 40% tariff on goods transshipped through Vietnam
That’s represent a 780% increase in their tariff bill. These costs directly hit growth, consumers, and jobs.
Village Lighting, a US company that sells Christmas lights. Their entire business depends on one season. Every year, they have a $2m credit line to stock up, then repay it after holiday sales.
This year, they had to increase that credit line just to cover tariffs. Without it, they’d have no inventory to sell. Even so, sales have already fallen 8 to 10% and they’re struggling to pay suppliers.
Their tariff bill jumped from $50k to over $1m, a 2,000% increase. Half their supply comes from Vietnam, Cambodia, Indonesia, Myanmar, and Thailand. The other half from China.
With a new 100% tariff starting November, Village lighting may not survive to this Christmas.
Tariffs like these end up not targeting foreign nations. They are attacking American small businesses, the backbone of the economy.
During the year end, we will start hearing more histories about American small businesses, and this can quickly represent customer price increase, bankruptcy of American small businesses, credit line defaults and lack of GDP growth.
It is not sustainable.
US companies imported around $3.4 billion in Christmas-related products, of which 87% comes from China. This 100% tariff comes in the worst time. Or you kill the China tariff or you kill US Christmas.
Probably this tariff is another nothing burger. But Trump is massing with Christmas and small business owners. It is a risky step to take.
Sources:
https://www.cnbc.com/2025/10/17/how-much-trump-tariffs-are-costing-small-businesses.html
https://www.uschamber.com/small-business/small-business-data-center
https://www.avuniversalcorp.com
https://villagelighting.com
https://www.bloomberg.com/news/features/2025-08-21/christmas-decorations-made-in-china-hit-by-trump-s-tariffs