Tariffs, Trade Wars, and Tiny Businesses: What the Heck Is Going On?

Holy City High
Apr 10
4 min read

United States President Donald Trump presenting his reciprocal tariffs plan

So, you’re minding your own business, scrolling the news or maybe just trying to figure out why your favorite gadgets, tools, or even avocados cost more these days. Suddenly you see words like “tariffs,” “trade war,” and “economic retaliation” flying across the screen like you’ve accidentally stumbled into an episode of Game of Thrones: Global Edition.

Let’s break it down. What are tariffs, why do they matter, and how did Donald Trump’s tariff crusade end up throwing a wrench into the gears of small business across the country?

First Things First: What’s a Tariff?

Think of a tariff as a tax — but not the kind you pay on your income or your latest Amazon haul. This is a tax on imported goods, meaning stuff that’s made in other countries but sold in the U.S.

Let’s say you want to buy a sweet new electric bike made in China. Without a tariff, it costs $1,000. But with a 25% tariff slapped on? Now it costs $1,250. That extra $250 doesn’t go to the company in China — it goes to Uncle Sam.

Why Do Countries Use Tariffs?

Governments use tariffs like a toolbox full of wrenches, hammers, and maybe a crowbar or two. Some of the reasons:

Protect local industries: By making imported goods more expensive, domestic products seem cheaper and more appealing.
Raise revenue: Before income taxes were a thing, tariffs were one of the main ways governments got their cash.
Political leverage: Tariffs can be used to put pressure on other countries — a kind of economic “do what I want, or I’ll make life expensive for you.”

The Pros of Tariffs

Alright, let’s give tariffs their flowers (at least for a second):

Boosts local production – If imported widgets become pricier, people might buy the locally-made widget instead.
Saves jobs in protected industries – A tariff can protect struggling sectors like steel or textiles from being overwhelmed by cheaper foreign competition.
Can raise government revenue – Cha-ching! Tariffs mean more money for government programs or infrastructure (in theory, anyway).

The Cons of Tariffs

Now here’s the twist — for every pro, there are some juicy cons:

Higher prices for consumers – We, the people, end up footing the bill. Your $800 washing machine just turned into a $1,000 one.
Hurts businesses that rely on imports – Small shops that sell foreign-made parts, materials, or goods? They’re in trouble.
Retaliation – Other countries can fire back with tariffs of their own. Suddenly, our exports (like American soybeans or whiskey) get hit abroad.
Global tension – Trade wars strain international relations and make markets twitchy.

Trump and the Tariff Tantrum

Enter: Donald J. Trump — real estate mogul, reality TV host, 45th/47th President, and self-proclaimed “Tariff Man.”

Trump didn’t just dabble in tariffs. He went full Super Saiyan. He imposed billions in tariffs on China, along with tariffs on steel, aluminum, and other goods from friendly countries like Canada, the EU, and Mexico. His reasoning? To combat what he called “unfair trade practices,” bring back American manufacturing, and close the trade deficit.

But here’s where things started to unravel — particularly for the small businesses caught in the middle.

How Small Businesses Got Caught in the Crossfire

Small businesses don’t have massive legal teams, international offices, or bottomless wallets like big corporations. They operate on thinner margins and rely heavily on global supply chains.

So when tariffs made imported goods more expensive, guess who paid the price? Yep, the little guys.

Real-World Example Time:

Take a small U.S. bike shop that imports parts from China. Suddenly, thanks to tariffs, their components cost 25% more. They either have to:

Eat the cost and lose profits
Raise prices and risk losing customers
Try to switch suppliers (which can take years and cost more anyway)

None of those are good options. Many had to lay off workers, halt expansion, or close entirely. Not exactly the American dream, right?

The Myth of “China Pays the Tariffs”

One of the most repeated lines during Trump’s trade war was: “China is paying the tariffs.”

Spoiler alert: They’re not.

When the U.S. imposes a tariff on goods from China, the American importer pays that tax — and usually passes it down to consumers. It’s like blaming Starbucks for your expensive pumpkin spice latte when it was actually the dairy tax that spiked the price. Sure, China may feel some pain if demand drops, but the upfront cost hits here at home.

Trade War Fallout: A Big Bill and Few Wins

Farmers hit hard – China retaliated by slapping tariffs on U.S. agricultural products. American farmers lost key markets and needed billions in bailouts.
Manufacturers got squeezed – Steel tariffs raised prices on U.S. manufacturers who use steel — like carmakers and appliance brands.
No clear victory – The trade deficit didn’t shrink much. Manufacturing jobs didn’t come roaring back. The economy took a hit during an already fragile time.

So... Were There Any Wins?

To be fair, the tariffs did call attention to legitimate concerns: China’s intellectual property practices, forced tech transfers, and state-subsidized industries. The U.S. should protect its economic interests.

But a full-blown trade war with scattershot tariffs wasn’t the most strategic way to handle it — especially when allies got caught in the crosshairs and small businesses became collateral damage.

What Should Happen Instead?

Instead of going full Rambo on global trade, a smarter approach might include:

Targeted tariffs or sanctions – Focus on sectors tied to actual abuses, like IP theft.
Strengthening domestic industries through investment – Not punishment.
Collaborating with allies – A united front against unfair practices is stronger than going it alone.

Wrapping It Up

Tariffs aren’t evil. They’re a tool — and like any tool, they can build or break, depending on who’s using them and how.

Trump’s trade war might’ve been intended to protect American jobs, but in practice, it ended up hurting small businesses, straining international ties, and making everyday goods more expensive for regular people.

Next time you see “tariff” in the headlines, you’ll know it’s not just some boring econ term. It’s a real-world force with winners, losers, and a whole lot of receipts.

So if you’re a small business owner feeling the pinch, or just a curious citizen wondering why your blender now costs $50 more — now you know: Tariffs matter. Use responsibly.