Tariffs Trigger Mounting Small Biz Crisis

20% Predict Shutdowns, 50% Fear Sales Declines

BOSTON, MA, May 8, 2025 – A new report from Alignable, North America’s largest network for small business owners, reveals rising anxiety among entrepreneurs as the U.S. trade war continues to disrupt operations and destabilize revenue.

One in five entrepreneurs (20%) now fear they won’t make it through the year if tariff conditions persist. 

Half expect revenue declines (50%) due to current or future tariffs—up from 44% in April and just 30% in January. And 26% say they’ve already taken a financial hit, reporting income losses directly tied to trade barriers.

While concern is widespread, 20% of SMB owners still expect tariffs to boost their revenue—up slightly from 18% in April’s report. 

Meanwhile, 30% say tariffs will have no effect on their business, down from 38%, signaling that the ripple effects of U.S. trade policy are spreading quickly.

Study: Collaboration With HBS & MIT Researchers

These findings come from Alignable’s May Tariff Report, based on 2,392 survey responses collected between April 9 and April 24, 2025, along with insights from 13,000+ earlier poll participants. This study was conducted in collaboration with Harvard Business School researchers Zoe Cullen and Ebehi Iyoha, and MIT researcher David Atkin.

In addition to concerns about declining revenue, the May report highlights mounting operational challenges and long-term planning roadblocks for small business owners:

• Many entrepreneurs are feeling the effects of tariffs even without direct trade exposure, due to inflation.
• More than 50% say they’re unable to negotiate lower prices with suppliers.
• Domestic alternatives often cost at least 25% more and can take six to twelve months to secure.
• 42% expect trade policy uncertainty to persist through the rest of 2025.
• 75% believe a high-tariff environment—defined as average rates of 15% or more—will remain in place for years to come.

“Business owners are incredibly resourceful, but tariffs are creating more intense cost pressures and deeper uncertainty with each passing month,” said Eric Groves, Alignable’s Co-Founder and CEO. “With half of SMB owners now expecting sales to decline, it’s a clear signal that we need to act together. One of the most effective ways to push through this turbulence is by leaning on your community and tapping into your most trusted relationships. The AI-powered networking we have at Alignable helps uncover the hidden value in your network—surfacing the connections and introductions that lead to real opportunities. In times like these, strong relationships aren’t just helpful—they’re essential for sustainable growth.”

States Feeling the Strain

According to Alignable’s May report, the states where concerns about lost sales are highest include:                                                                               

• New York – 57% (up from 55%)
• California – 56% (up from 45%)
• North Carolina – 56% (up from 39%)
• Arizona – 55% (up from 44%)
• Colorado – 55% (up from 39%)
• Illinois – 54% (up from 40%)
• Ohio – 54% (up from 38%)
• Florida – 51% (up from 48%)
• Pennsylvania – 50% (down from 52%), and
• Massachusetts – 48% (no change).

Industry Pressure Points

As national concern over tariffs rises from 44% to 50%, several sectors are feeling the impact even more acutely, as well:

• Marketing – 70% (up from 47%)
• Restaurants – 67% (up from 54%)
• Travel/Lodging – 67% (up from 54%)
• Mining – 67% (up from 60%)
• Retail – 64% (up from 54%)
• Manufacturing – 63% (up from 52%)
• Transportation – 61% (up from 53%)
• Arts/Music – 58% (up from 49%)
• Construction – 53% (no change)
• Health/Wellness – 46% (up from 41%)

Some sectors, however, saw signs of stabilization this month:

• Education – 40% (down from 49%)
• Finance – 28% (down from 32%)

In Their Own Words

While the data is compelling, the personal experiences of small business owners bring the impact of tariffs into sharper focus. Here are several direct quotes from survey participants:

• “My business is too small and low-margin to weather significant increases in my costs of goods, at the same time that many of my customers are losing their jobs.” (Retail)
• “Tariffs will NOT bring manufacturing jobs back to America. Conservatively, it would take a company 5–10 years to identify a location, build plants, hire and train employees, and begin production.” (Management)
• “Tariffs will create hardship in the interim. But over time bringing American industry back will create jobs, build communities, and allow for more domestic purchasing power.” (Construction)
• “If the extreme tariffs on EU imports (specifically wine) are put in place, we will go out of business.” (Retail)
• “As an M&A Advisor, my clients across a host of industries are suffering from the actual tariffs, the threatened tariffs, and the uncertainty.” (Finance)
• “Tariffs are very disruptive, but also an opportunity to even out U.S. trade imbalances — and for our company to benefit by being more intellectually responsive than our competitors.” (Transportation)
• “The instability is forcing companies to change operations, so they only produce exactly what is likely to sell. Companies will not invest in new capital assets, because they have no idea whether tariffs may destroy the market.” (Professional Services)

For more quotes or detailed data by state or industry, contact Chuck Casto via email: chuck@alignable.com. 

To review prior survey results, visit the Alignable News Center, which chronicles small business sentiment and trends across North America.

About Alignable

Alignable, North America’s largest network for small business owners, connects more than 9 million entrepreneurs across 35,000+ communities. Built to help entrepreneurs network smarter, Alignable makes it easy to build trusted relationships, grow through referrals, and share insights with peers. Powered by Alignable 360, an intelligent relationship engine, the platform enhances business visibility, surfaces high-value connections, and fosters lasting growth. Learn more at www.alignable.com.