As the current administration continues to impose higher tariffs on countries worldwide, confidence and uncertainty among individual investors, small businesses, and corporations plummet.
According to Apollo Global Management’s Chief Economist, Torsten Slok, the potential impact of the current tariffs, particularly with China, is staggering. If they remain in effect, the number of small business bankruptcies will skyrocket.
Small businesses have little working capital and will take the most significant hit compared to larger corporations, which are better equiped to absorb tariff price increases.
Slok said that in addition to an increase in bankruptcies, job losses will also soar as small businesses employ 80% of all workers in the US. He said that as many as 70% of these businesses that sell on Amazon, source their goods from China. He also added that 40% of all imports from China go to small businesses. Also, according to Amazon, in 2023, these independent sellers on its platform employed nearly 2 million people in the US.
Small businesses, due to the quick implementation of these tariffs, found themselves in a situation where they lacked the time to prepare and adjust to the possibility of new sources of their goods.
With time not on the side of small businesses, the urgency of resolving the tariff issue cannot be overstated. It is critically important to resolve this matter quickly as it affects a significant percentage of US livelihoods in this crucial area of the economy.
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