A New York City comedian who riffs on current events recorded a sidewalk debate with another man about tariffs, then posted it. It got 7MM views on YouTube and 28MM on TikTok. It was his biggest response ever, and he was hardly alone in getting soaring responses by posting about tariffs. Everybody, it seems, is talking about tariffs these days, but have your small and medium-sized business (SMB) customers made enough adjustments to weather the storm? The levies are reshaping trade at breakneck speed, leaving many small businesses scrambling. Businesses with a wait-and-see attitude may find themselves left behind. Data: SMBs Are Worried About TariffsA recent poll of small businesses by the National Small Business Association found that more than half were concerned about increasing tariffs, with 29% very concerned. Only one in five supported broader tariffs. The U.S. Chamber of Commerce collected a sizeable sampling of comments by small businesses expressing worries about the new tariffs. Here’s what the owner of one small seafood business had to say: “I’m a smaller business, and I’m not really staffed, equipped, and knowledgeable enough to know how to navigate tariffs.” In an interview with Good Morning America, a small loungewear business’ CEO discussed the tough decisions his company will have to make, as all inventory is from China. “Costs are going to get so high that either we have to choose to go out of business with ridiculously high prices on stuff no one’s going to buy or sell it below cost.”CFIs should be concerned as well. Their client small business owners are facing new and unexpected challenges from tariffs — challenges that they may find difficult to overcome. For example, when it comes to China, tariffs affect prices on everything from clothing to electrical equipment to consumer electronics, and the impact on small business is especially tough. Practical Tips for Immediate Tariff ManagementFor SMBs already feeling the impact of disrupted supply chains and skyrocketing costs, being proactive in response to tariffs remains critical. Many SMBs are looking for information and direction, and this is an area where CFIs could be very helpful, pointing out potential strategies and considerations. Here are some tips for advising SMB owners:
- Evaluate costs. CFIs should encourage their SMB clients to review operating costs and identify where tariffs may have the greatest impact. By focusing on the highest priorities, SMBs can craft a more effective response.
- Review supplier contracts. SMBs should start by having candid discussions with suppliers, pointing out how tariff-related supply price increases would impact them. SMBs should advocate for contract adjustments, and they should also be open to conversations about sharing tariff burdens with their suppliers.
- Explore alternative suppliers. SMBs should evaluate whether existing suppliers remain cost-effective under current tariffs. This may include sourcing more domestic options to avoid added fees or identifying international partners in countries not subject to the same trade restrictions. Diversifying the supply chain can help mitigate risk and create more pricing stability over time. It’s also important to understand an SMB’s concerns about breaking long-standing supplier relationships and building new ones.
- Adjust product prices. Businesses should review the prices they charge and consider increases to reflect higher costs. It is important that businesses communicate with customers about the reasons and needs for any price hikes. Price adjustments need to be done with care to make sure businesses don’t drive customers to competitors. There needs to be a balance between competitiveness and margin preservation.
- Control expenses. One way for businesses to absorb higher costs from tariffs is to reduce other expenses. This is a good time to carefully review spending and trim wherever possible, with a focus on cuts to discretionary spending that can improve cash flow.
How CFIs Can Help SMBs Navigate Tariffs CFIs should be engaging with their SMB clients to get an idea of how exposed these small businesses are to tariffs. There are a number of ways CFIs can help SMBs weather any tariff storm.
- Provide financial support. Small businesses may find themselves with an immediate cash crunch as result of pressures from tariffs. CFIs can help bridge that gap by providing business lines of credit to address immediate cash flow concerns.
- Help restructure debt. Tariff-affected borrowers may find themselves squeezed by the demands of their business loans. CFIs can help by restructuring debt as needed to help relieve pressure.
- Provide advice. CFIs can be key financial advisors for small businesses, helping them plan financial strategies around tariffs. CFIs can provide effective support for cash flow management and expense planning, as well as helping find ways to mitigate credit risk. CFIs can also encourage SMBs to engage with their own accountants and financial advisors about their situations.
- Discuss technology solutions. Digital banking tools, if used effectively, can help improve financial management efficiency. CFIs can discuss how their digital solutions can be effectively deployed to help small businesses as they try to deal with the impact of tariffs.
- Encourage long-term resilience. Ultimately, CFIs want to see their business clients shore up any weaknesses that make them vulnerable to tariff-hike disruptions. Businesses should be encouraged to diversify supply chains. Technology investment should also be encouraged as a way to improve efficiency and save on operating expenses. Long-range planning should be undertaken, with a focus on trade policies. CFIs, with their financial expertise, can be powerful partners in helping SMBs achieve their goals.
The disarming speed with which tariffs have arrived should send a clear message to small businesses: immediate action is required to manage the impacts. Carefully crafted strategies can help SMBs get through it, and CFIs can be trusted partners in navigating the uncertainty. The end result should be more resilient businesses.
