President Donald Trump’s tariffs are hitting minority-owned and immigrant workers as economic setbacks sweep through the small business community. 97% of all importers in the United States are small businesses and two-thirds of them export, according to the Small Business Administration (SBA). While the economy grew at 2.5% in 2024, growth dropped to just 1.2% this year as consumer spending is now flatlined as a result of rising prices.
“Small businesses are at the heart of the U.S. economy. It’s a majority of our GDP,” Dilawar Syed, former Deputy Administrator at the Small Business Administration during the Biden administration, said. “They are the largest job creators in our country, and the impact on small businesses has been tremendous when it comes to these tariffs.”
Speaking at a briefing hosted by American Community Media on Aug. 15, Syed said small business sentiment is at its lowest in 15 years, with 58% of owners saying they are worse off today than they were a year ago. He said the sudden and profound policy changes are creating uncertainty among businesses, many of which lack the resources necessary to adapt. A large number of businesses are even facing closures.
“You need clarity, especially when you are operating a small business. What we have seen with these tariffs, the up and down, I don’t think anybody can track where these tariffs are,” Syed said. “Most small businesses don’t have the resources to be able to stay on top of these very abrupt and drastic policy changes, so they clearly have an impact on your ability to plan.”
Dr. Neale Mahoney, Director of the Stanford Institute for Economic Policy Research, said the uncertainty created by Trump’s tariffs is “paralyzing the economy,” leading small businesses to be uneasy about future costs. He said many are now reluctant to hire new workers or expand their facility.
“Small business owners from across industries were complaining about how tariffs are creating huge issues for their supply chains,” Mahoney said. “The impacts on business work against Trump’s priority of promoting businesses in the United States. If you are increasing their costs, for example, by imposing large tariffs on steel or on copper, you make it more difficult for businesses to operate in the United States, not less.”
As tariffs are a tax on consumer goods, they are expected to create a stronger impact on consumers as well, Mahoney said. Tariffs are increasing by about 15 percentage points, equivalent to about a 1.5% increase in overall prices. These impacts are expected to significantly hurt the American working class as prices of clothing, electronics, furniture and coffee are projected to continue rising.
Considering the adverse effects for businesses, Mahoney said it is concerning that Trump shows no sign of changing course and is instead pursuing a strategy to distract from the economy. They warn that while large corporations may successfully navigate these challenges through political leverage, small business owners are likely to be left behind.
“The administration frames this as sort of the art of negotiation. But it’s really freezing the economy in troubling ways,” Mahoney said. “….If I had to guess why Trump and the administration likes tariffs, it’s because it’s a form of power that allows them to extract concessions out of foreign governments. It means that CEOs of Fortune 500 companies are lining up to flatter Trump at Mar-a-Lago. The problem is, for many small businesses, for consumers, that’s not an option to go to Mar-a-Lago and bend the knee. So, they will be facing higher prices and have to cut back on their economic activity.”
Speakers noted that Trump’s coercive tariff approach has served as a political tool against foreign governments while creating tangible financial hurdles for entrepreneurs. Many negotiations with foreign nations have a prominent ideological component to them, as the current administration is seen using economic policy as a means to secure political ends.
Dr. Anil Deolalikar, professor of economics at the University of California, Riverside, said the 40% punitive tariff on Brazil stems entirely from the prosecution of former president Jair Bolsonaro, as admitted by the Trump administration. He said the 25% additional tariff on India is also non-economic in nature, acting as a punishment for purchasing Russian oil.
“This is not the purpose of tariffs in the first place,” Deolalikar said. “This is sort of really unusual for tariffs to be used as bargaining ploys and pressure tactics to change the policies of countries.”
Deolalikar said it is expected that the major emerging economies, known as BRICS, will come even closer together in the face of Trump’s tariffs, creating difficulty for the U.S. to successfully negotiate. India, China and Brazil are planning a three-way system to increase trade among themselves, a development likely to hurt long-term interests of U.S. businesses.
As Trump’s campaign promises overwhelmingly centered around economic policy, including bringing jobs back to the U.S. and revitalizing domestic industries, it remains unclear how his current policies will fulfill those goals. As some negotiations seem unlikely to succeed, tariffs will continue plaguing the economic prospects of many small business owners, especially those operated by minority groups.
Immigrant-owned businesses predominantly rely on imported goods to sustain their inventory, and tariff-induced price increases are now causing their financial outlook to appear grim. Cities like New York City, Los Angeles, San Francisco and Atlanta have significant minority populations with many small businesses owned by immigrants. Hungarian and other Eastern European small businesses located throughout the New York Tri-State area are also navigating rising prices and fluctuating consumer demand.
This situation has also had a severe impact on the Hungarian American community. With the exception of a few well-known wealthy figures, the Hungarian ethnic minority in the United States typically operates small, family-owned businesses. These enterprises are hit hardest by the rising costs of raw materials caused by tariffs.
In addition, a significant portion of Hungarian Americans are engaged in business ventures that import goods from China to resell on Amazon. Many Hungarian families depend on these businesses for their livelihoods, but they too are now facing serious difficulties. Hungarian shipping companies have also become victims of tariff policies, as continental transport has become more expensive and demand has dropped sharply.
The consequences extend beyond individual businesses, affecting the entire community. Less revenue means less financial support for Hungarian American institutions, the upkeep of churches and community buildings, as well as cultural preservation and archives. There will be fewer community events and gatherings, weakening cohesion within the Hungarian diaspora. Even Hungarian American schools may be adversely affected.
Minority populations have already been disproportionately impacted by a range of policies pushed forward by the Trump Administration, including the passage of the One Big Beautiful Bill. Now, tariffs and intensifying administrative regulations are adding yet another hurdle for ethnic communities and non-U.S. born workers.
For instance, as of March 2025, the SBA requires all businesses to be 100% owned by U.S. citizens or permanent residents who have resided in the U.S. for at least six months in order to qualify for an SBA loan. Such policies and tariff-related hardships are diminishing the hopes of many immigrants to pursue their business goals.
“We are a nation of immigrants, and immigrants bring with them the drive, the energy, this hunger to create,” Syed said. “These policies are absolutely crushing the drive and the dream that entrepreneurs have, who are from an immigrant background. Not just in the ways that we’ve talked about in terms of tariffs and what they’re doing, but also creating a sense of fear for immigrant communities.”
Syed recalled meeting with a Latina business owner who runs an ethnic food store. She received a bill from Customs and Border Patrol (CBP) for $19,500 of import duty. She was unable to pay the amount nor pass on the costs to the supermarkets she supplies due to the length of time needed to adjust pricing.
“So what’s the consequence? She’s going to have to lay off workers or she’s going to have to shut down,” Syed said. “That’s what we are seeing come out in data as we move forward.”
Marcus Bowers, a Navy veteran and Co-founder of She’s Happy Hair, also said he is concerned about how tariffs are going to impact his company. He relies on raw materials for hair extensions and wigs from India and processes them at factories in China. Due to Trump’s tariffs, he already needed to raise the price of hair bundles from $75 to $110 and hair extensions from $1,100 to $1,500. Bowers does not see the possibility for Trump to fully bring back industries to the U.S., as his own hair industry fully relies on foreign factories.
“As I traveled around the world and started comparing and contrasting suppliers and supply chain and the factories, there’s nothing in comparison to what China has to offer as far as everybody else around the world,” Bowers said.
Even as Trump promises to strengthen American manufacturing, Bowers said he does not see American workers being able to replace international suppliers, raising doubts about the effectiveness of Trump’s tariff plan. Considering his hair industry, he said he does not think Americans will weft hair for eight to 12 hours a day in factories.
“I don’t think Americans are going to be doing the deep cleaning, the sterilization, the sorting, the coloring, the bleaching,” Bowers said.
As Trump’s tariff plan continues to fragment the dreams and opportunities for many small business owners, experts envision some optimism with the possibility of local, state-level advocacy. In the midst of these challenges, Syed ended with a message to small businesses.
“I just want them to know your voice matters. We are a democracy, and we have seen every time there has been a clamor for what’s going on, and people are talking about the stories. Those stories matter,” Syed said. “Take your CBP bill to your member of Congress’s town hall. Mail a copy of that bill to members of Congress. Email them to the White House. Let them know these are taxes that you’re imposing on my business, and I’m on the verge of shutting down.”
