Trump Tariff Block Could Small Businesses Finally Catch a Break?

Small Business Owners Dare to Hope as Courts Challenge Trump-Era Tariffs

For years, American small business owners have navigated a turbulent sea of tariff-related anxieties, confusion, and frustrations. However, recent court decisions challenging the legality of President Trump's tariffs have injected a fresh dose of optimism into their operations.

A Wave of Relief and Uncertainty

“I feel a lot of relief and hope,” shares Sarah Wells, owner of a Virginia-based company specializing in breast-pump backpacks and maternity accessories. Wells, like many of her peers, faced unexpected financial burdens when tariffs surged, forcing her to scramble for an additional $15,000 to receive a crucial shipment from China.

Now, with two federal courts ruling that President Trump potentially exceeded his authority in imposing these tariffs, a crucial question lingers: Will businesses recoup the funds they paid? The White House's vow to appeal adds another layer of uncertainty, leaving entrepreneurs wondering if this is merely a fleeting moment of respite in an ongoing saga.

Strategies for Survival: Stockpiling and Order Cancellations

Barton O'Brien, a former Marine and the owner of BAYDOG, a Maryland-based pet supply company, took proactive measures to mitigate the impact of tariffs. He maximized available space to stockpile leashes, harnesses, and other pet supplies.

“We had dog life jackets in the bathroom,” O'Brien recalls. “Our warehouse was bursting. We had to rent a container and put it out back.”

O'Brien even canceled orders for doggie sweaters. The threat of a 26% tax on imports from India, which would have decimated his profit margins, forced him to make tough decisions. Looking ahead, he's cautiously optimistic that tariffs will decrease, potentially thanks to Supreme Court intervention.

The complexities of international trade demand foresight, as O'Brien emphasizes: “The production cycle is very long. So you need to plan things six months, eight months out. We don't know what the tariff regime is going to be, but we have to at least get them made and then hopefully we get a favorable decision.”

Court Rulings and the Impending Legal Battle

Recent court decisions have introduced significant uncertainty:

• U.S. Court of International Trade: Initially struck down many of Trump's tariffs, siding with 12 states and five businesses.
• U.S. Appeals Court: Temporarily paused the judgment pending further legal proceedings.
• Second Federal Court: Blocked Trump's authority to unilaterally impose tariffs, ruling in favor of two Illinois toy importers.

The White House remains resolute, vowing to appeal and defending its use of the International Economic Emergency Powers Act (IEEPA) of 1977. Spokeswoman Karoline Leavitt stated, “We expect to fight this battle all the way to the Supreme Court.”

Caught in Limbo: Hesitation and Uncertainty

These legal battles leave businesses in a precarious position, unsure of how to proceed with production, shipments, factory locations, and pricing strategies.

Rozalynn Goodwin, owner of GaBBY Bows, a South Carolina-based company that sells patented double-snap hair barrettes made in China, encapsulates this hesitation: “I'm not planning to do anything right now. I don't trust what's going on right now, I just don't.”

The High Cost of Tariffs: A Cent Makes a Difference

Goodwin’s experience highlights the financial strain caused by tariffs. A significant deal to supply GaBBY Bows to hundreds of Claire's stores was jeopardized when tariffs on her products soared to over 170%. Even when tariffs temporarily decreased to 35%, they remained unaffordable.

“When you're selling a product that is $3.99, every cent counts,” Goodwin emphasizes. “Every cent.”

She has had to renegotiate with Claire's, focusing on existing inventory rather than new designs. While she continues to explore U.S.-based manufacturing options, their prices remain prohibitive. Goodwin remains hopeful for a resolution: "I am hopeful that by the fall, you know, cooler heads are at work, and we can get to some type of resolution. I'm going to make what we have work. Until I cannot make it work anymore.”

Beyond the Current Rulings: Other Avenues for Tariffs

Even if the court rulings stand, the White House retains other legal mechanisms to impose import taxes, albeit potentially on a smaller scale. Section 232 of the Trade Expansion Act allows tariffs to address national security threats, and Section 301 of the 1974 Trade Act permits taxes to penalize trade violations. These powers have been previously used to impose tariffs on steel, aluminum, and goods from China.

Passing on the Costs: Price Increases

Many businesses have resorted to raising prices to offset tariff expenses. Sarah Wells of Sarah Wells Bags has increased prices by 10% to 15%. Cosmetics company e.l.f. has also announced a $1 price increase across its product line. Earlier this month, Trump criticized Walmart after the retail giant warned of tariff-induced price hikes.

Wells laments, "I have just been squeezed from all ends. The cost of shipping has gone up. The cost of boxes has gone up, shipping labels.”

A State of Flux: The Impact on Business Decisions

The ever-changing tariff landscape has created logistical challenges. Importers rushed to stash cargo in bonded U.S. warehouses when tariffs on goods from China spiked to 145%. Then, when tariffs dropped to 30%, they raced to retrieve their goods. Wells has explored alternative manufacturing in Cambodia, but shipments are not expected until 2026. For now, she's closely monitoring the tariff lawsuits.

Marc Busch, a trade law expert at Georgetown University, notes that the uncertainty is stifling business activity: “Until we get a little more clarity, the ultimate irony is we're not going to see companies rushing to do much of anything, in terms of reshoring to the U.S. or moving out of China. No one knows what could be next. It could change in a heartbeat and that really is the big problem today.”

Navigating an Uncertain Future

The recent court decisions offer a glimmer of hope for small business owners grappling with the burdens of tariffs. However, the impending legal battles and the potential for new trade restrictions mean that uncertainty will likely persist. Businesses must remain agile, informed, and prepared to adapt to the ever-changing landscape of international trade. The resilience and determination of these entrepreneurs will be critical as they navigate this challenging environment.

Source: https://www.npr.org/2025/05/30/nx-s1-5415763/trump-tariffs-blocked-small-businesses-refunds