Tariff Turmoil: The Unintended Consequences of Trump’s Trade War

The latest salvo in the ongoing trade war has left small business owners reeling, as the Trump administration’s tariff policies continue to wreak havoc on an already uncertain economic landscape. A recent report from Crux Analytics paints a stark picture of the devastating impact these policies are having on the nation’s smallest businesses.

Small business bankruptcies have skyrocketed by 67% in the first quarter of 2026, with total business bankruptcies up 14% year-over-year. The Small Business Administration’s lending program has seen a record $45 billion dispensed to over 84,000 businesses in the 2025 fiscal year. Many small firms are turning to expensive merchant cash advances or high-interest credit cards as a last resort.

Crux Analytics attributes the trend to the “whiplash” effect of ever-changing tariff policies. The Trump administration’s decision to replace expiring international tariffs with new levies on 80 nations has created an atmosphere of uncertainty that’s crippling small businesses’ ability to plan for the future. According to Jacob Bennett, CEO of Crux, this volatility is causing real business collapse in some cases.

Not everyone agrees that the situation is as dire as the numbers suggest. Ami Kassar, CEO of Multifunding, a Philadelphia-based SBA deal broker, believes that the tariff policy change won’t have a significant impact on small businesses. He points to his own company’s growth prospects, which he expects to increase by between 80% and 100% this year over 2025.

However, Kassar’s skepticism is tempered by the fact that working capital management has become a much bigger focus for small businesses in recent years. Attorney Scott Oliver, a partner at Lewis Kappes in Indianapolis, notes that the Small Business Administration has always been ready to lend to small businesses that need operating capital. He cautions against reading too much into the numbers.

The tariff war is having far-reaching consequences for small business owners and lenders alike. The question is: what comes next? Will the Trump administration continue to impose tariffs without regard for their impact on small businesses, or will it take steps to mitigate the damage?

As the situation unfolds, one thing is certain: small businesses will bear the brunt of the trade war’s unintended consequences. Bennett notes that the worst-case scenario is that these numbers don’t reverse, and the economy quickly feels the effects. The onus is now on policymakers to take a hard look at the impact of their decisions on the nation’s smallest businesses.

Small business owners are not just collateral damage in this trade war; they’re the canary in the coal mine. The question is: will anyone listen before it’s too late?