Tariffs’ Toll on Main Street

How small- and medium-sized businesses are finding opportunity in scarcity.

Tariffs are heating up, and small- and medium-sized businesses (SMBs) are feeling the burn. Though tariffs are a multifaceted solution to various macroeconomic issues and may serve as a catalyst to achieve new economic heights, a sudden hike in tariffs may also put a financial squeeze on revenues and profits for SMB owners like Steve Jamison of Blue Sole Shoes on Philadelphia’s iconic Chestnut Street. 

Jamison is one of the 33.5 million SMBs that contribute $13 trillion to GDP in the U.S. Like Jamison, many SMBs rely on imported consumer goods and services from China, Mexico, and Europe. Jamison, who runs a middle market boutique that showcases high-end shoes, clothing and accessories from Italy and around the globe, says “there are very few American designs. Implementation of the White House’s initiative to raise $100 billion in revenue annually through tariffs could be more complicated.” According to the Census Bureau and the U.S. Bureau of Economic Analysis, the goods and services deficit was $98.4 billion in December 2024 and is now up by $19.5 billion from $78.9 billion in November. Furthermore, Jamison says that “near-shoring is not an option.” 

“There is no single right answer or path forward, but there is one right way to frame the problem,” says Harvard Business School professor Clayton Christensen: reframing the problem altogether. 

In other words, there may be an opportunity for American consumer goods and services to innovate and achieve more brand recognition locally and internationally. If tariff mandates can raise federal revenue, increase jobs, and boost manufacturing in the U.S., there may be new opportunities for SMBs to grow and thrive. Additionally, there may be an opportunity for bipartisan regulatory reforms that build common ground, such as preserving community development financial institutions (CDFIs), which are lifelines for small business financing.  

Some SMB owners like Jamison, who have overcome prior economic recessions like the 2008 financial crisis, are adapting to this new paradigm with a mindset of self-sufficiency. As Jamison says, “worrying immobilizes one, but concern, spurs action.”

Ibe Imo (Journalism ’25) covers venture capital, responsible Al, data privacy, sports, and wholesale and consumer finance at Merie Studios. He’s a business leader and technology professional at a Fortune 100 company. At Harvard Business School's independent student publication, he leverages his unique blend of storytelling and computer science expertise to empower business and technology leaders to optimize opportunities. Previously, Ibe managed the fintech and regulatory reporting newsletter at PwC's U.S Banking & Capital Markets advisory group. At Accenture in Silicon Valley, he led global social media campaigns, empowering people to unlock value and support equitable opportunities.