America could see surge in business closures this year: poll

Small business owners are feeling anxiety over President Donald Trump’s new tariff policies, with 20 percent saying they fear they could have to shut down within the year due to the ongoing trade war, according to a new Alignable report.

The report found half of surveyed small business owners expect their revenue to decline due to current or future tariffs. That’s up from 44 percent who said the same in April.

Why It Matters

Trump’s 2025 tariff policies have significantly reshaped trade relations with countries worldwide.

In April, the president imposed a minimum 10 percent tariff on all imported goods, with significantly higher levies on imports from certain countries such as China, in a move Trump said was necessary to combat trade imbalances and restore U.S. manufacturing.

Most of these were paused days later amid strong backlash and a spiraling stock market.

What To Know

The sweeping tariffs are expected to increase costs for U.S. consumers and businesses, particularly in sectors reliant on imported electronics, machinery, and agricultural products.

Trump’s trade policies have also strained relations with key trading partners, including Canada and Mexico.

The new Alignable report showed a mix of reactions from small business owners to the tariffs in place.

While one in five are worried the tariffs will cause shutdowns, another 20 percent said they still expect tariffs to boost their revenue—up slightly from 18 percent in April’s report.

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek that with more time, more small businesses are likely to shutter completely.

“The longer this tariff policy continues, the more small businesses we’re going to see shutter who rely on other countries for products and don’t have the funding or time to pivot to domestic production,” Beene added.

Meanwhile, 30 percent say tariffs will have no effect on their business, according to Alignable.

Even business owners who aren’t directly importing may be impacted by the tariffs, with more than 50 percent reporting they’re unable to negotiate lower prices with suppliers.

The report was based on 2,392 survey responses collected between April 9 and April 24, 2025.

The Trump administration has defended the trade measures as essential for protecting domestic industries, but analysts warned that the tariffs could exacerbate inflation and disrupt supply chains.

The most recent development in Trump’s tariff strategy occurred over the weekend, when the U.S. and China agreed to a 90-day pause in their reciprocal tariffs, reducing the rates by 115 percentage points each.

The new rates lower U.S. tariffs on Chinese goods to 30 percent and Chinese tariffs on U.S. goods to 10 percent. This temporary truce allows both sides to negotiate a more permanent trade agreement.

Though the stock market suffered after Trump’s “Liberation Day” tariffs announcement, it soared on Monday following the agreement, with the Dow rising 1,000 points.

What People Are Saying

Eric Groves, Alignable’s Co-Founder and CEO, said in the report: “Business owners are incredibly resourceful, but tariffs are creating more intense cost pressures and deeper uncertainty with each passing month. With half of SMB owners now expecting sales to decline, it’s a clear signal that we need to act together.

Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “We’ll likely see more small businesses close, but predicting the exact number is tricky. Some owners will renegotiate contracts, restructure payments, or tap into equity lines of credit to stay afloat. Others may decide to cut their losses and shut down. One common thread I keep hearing is that, at the end of the day, these costs often get passed on to the end consumer.”

Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: “Tariffs are more than just a policy problem. They’re a small business execution nightmare. Look, 20% of us are staring down the barrel of shutdown, and it’s not because we’re weak. It’s because we’re being squeezed tighter than ever.”

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “On a seemingly daily basis, we continue to encounter stories of small businesses that are raising the red flag on how tariffs could devastate them. Some businesses have stopped importing items from countries with tariffs because the math no longer works for turning a profit. The reality is some of these businesses may close, and others with more cash on hand will either temporarily pause once inventory runs dry or absorb parts of the tariff to keep products as affordable as they can for the consumer.”

What Happens Next

Ryan said many small business owners are juggling impossible choices: raise prices and lose customers or absorb costs and bleed savings.

“The real killer isn’t even the immediate hit. It’s the psychological warfare,” Ryan said. “When you can’t predict next quarter’s material costs, you start playing defense, not offense. And in small business? Defense is just a fancy word for slow death.”