What the Latest Tariffs Mean for Small Retailers—And How to Lessen the Impact

President Donald Trump has declared April 2, 2025, as “Liberation Day,” ushering in a new wave of tariffs designed to reset trade relationships. These “reciprocal tariffs” aim to mirror the duties other nations place on U.S. products and include a 25% duty on foreign-made cars and auto parts, among others. For small retailers, this signals a shift in the economic landscape—one that could have a direct effect on your bottom line and the buying power of your customers.

If your shelves carry goods sourced from countries like Canada, Mexico, or China, you may soon see rising wholesale costs. And your customers? They’re already bracing for it. Analysts project that car prices could rise by $4,000 to $15,000 per vehicle, and an analysis from Yale University estimates the average household could end up paying $2,000 more annually because of these tariffs. Add to that the fact that the manufacturing sector is slowing down, and it’s no surprise that 72% of Americans believe prices will rise in the short term, with fewer than a third expecting any long-term relief according to a CBS News/YouGov Poll.

As consumer budgets tighten and shopping habits shift, small retailers like you are facing some tough decisions—but you’re not powerless. There are smart, strategic ways to adjust and stay resilient:

1. Rethink Pricing

• Adjust your pricing proactively to maintain margins.
• See if your suppliers can share some of the tariff burden.
• Shop around for the most affordable freight options.

2. Curate Your Product Line

• Add value-driven or budget-friendly items.
• Highlight product categories that remain essential or “worth the splurge.”
• Explore U.S.-made goods to appeal to patriotic or price-conscious shoppers.
• Test out new, untariffed product categories.

3. Diversify Your Supply Chain

• Research alternative manufacturing sources in countries like Mexico or Thailand.
• Consider working directly with manufacturers to cut out middlemen.
• Shift away from regions hit hardest by tariffs.

4. Optimize Daily Operations

• Pause major investments or hiring until the economic climate steadies.
• Use events and in-store experiences to keep foot traffic steady.
• Talk to your landlord about rent flexibility.
• Build contingency into your business plans—be ready to pivot.

5. Advocate and Educate

• Learn the ins and outs of how tariffs are shaping your industry.
• Share your story with lawmakers—they need to hear from small business owners.
• Consider inviting local officials to your store so they can see the real-world effects.

At the end of the day, small retailers are the backbone of their communities—and your adaptability is one of your greatest assets. Staying proactive, informed, and connected will help you weather these challenges and continue serving your customers, no matter what comes next.