What Trump’s Win Means for Small Businesses

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Trump takes office
Raising tariffs on imported goods
- “Made in America” companies could come out ahead. Small businesses that produce and sell goods wholly made in the U.S. stand to benefit from this proposal, according to the Tax Foundation, a nonpartisan nonprofit
. - Other businesses may have to pass the buck. Businesses that rely on imported products, parts or materials will have to choose between absorbing the tax themselves or passing it onto consumers
. Many studies found that tariffs levied during Trump’s first term drove up costs for both American businesses and individuals . - Counter tariffs pose a potential threat. When one country imposes tariffs on another, they’re often met with retaliatory tariffs
. If the U.S. imposes blanket tariffs on all imports and other countries respond in kind, businesses may have a harder time exporting goods.
Expanding tax cuts for small businesses
- Small-business owners will feel some relief. The 2017 Tax Cuts and Jobs Act was well-received by small-business owners, with overwhelming support for the qualified business income deduction, according to the National Federation of Independent Business, a nonprofit, nonpartisan advocacy group
. Extending these tax breaks would keep the door open for growth and innovation for many small businesses in the U.S. - Service businesses might retain more workers. Service-based industries where workers rely heavily on tips, such as restaurants and hotels, often struggle to keep employees
. By not having to pay taxes on tips received or overtime wages, workers may be more inclined to stay in these jobs . In addition, wage-based service businesses may be prompted to adopt a tip-based compensation system of their own, according to the Tax Foundation .
Mass deportation of undocumented immigrants
- America’s labor market could take a hit. With many undocumented immigrants working in construction, manufacturing and agriculture
, business owners in these industries may face a tougher labor market, according to the Brookings Institution, a nonprofit, nonpartisan research organization . This is especially true for businesses in states like Nevada, Texas, Florida and California, where the share of unauthorized immigrants is highest. - Some employers could be in hot water. Businesses caught knowingly employing unauthorized immigrants may face legal consequences, such as fines, imprisonment or losing their business license.
Cutting through the red tape
- Heavily regulated industries may catch a break. Small businesses in heavily regulated industries, such as energy, tech and finance may experience fewer administrative costs and restrictions, according to Morgan Stanley
.
Article sources
- 1. Center for Strategic and International Studies. Making Tariffs Great Again: Does President Trump Have Legal Authority to Implement New Tariffs on U.S. Trading Partners and China?. Accessed Nov 19, 2024.
- 2. Tax Foundation. How Will Trump’s Universal and China Tariffs Impact the Economy?. Accessed Nov 19, 2024.
- 3. Tax Foundation. Who Really Pays the Tariffs? U.S. Firms and Consumers, Through Higher Prices. Accessed Nov 19, 2024.
- 4. Cato Institute. Americans Paid for the Trump Tariffs—and Would Do So Again. Accessed Nov 19, 2024.
- 5. Council on Foreign Relations. What Are Tariffs?. Accessed Nov 19, 2024.
- 6. National Federation of Independent Business. The Tax Cuts and Jobs Act, One Year Later: Part II. Accessed Nov 19, 2024.
- 7. U.S. Bureau of Labor Statistics. Quits levels and rates by industry and region, seasonally adjusted. Accessed Nov 19, 2024.
- 8. Congressional Research Service. Taxation of Tip Income. Accessed Nov 19, 2024.
- 2. Tax Foundation. How Will Trump’s Universal and China Tariffs Impact the Economy?. Accessed Nov 19, 2024.
- 10. Pew Research Center. What we know about unauthorized immigrants living in the U.S.. Accessed Nov 19, 2024.
- 11. Brookings Institution. The labor market impact of deportations. Accessed Nov 19, 2024.
- 12. Morgan Stanley. What the Trump Victory Means for Markets. Accessed Nov 19, 2024.