By Ruth Simon

The owner of a San Francisco card-game company cashed in his money-market funds. The founder of a tent maker is looking for investors. A watch and jewelry company in Colorado is holding off on signing a new office lease. And a New Hampshire consumer-product company has laid off more than half its staff.

Around the country, small businesses that import goods made in China are taking actions -- big and small -- to try to outlast the current 145% tariff regime on items from that country. But many are worried that their companies won't survive.

"Nobody in power seems to care about small business," said Scott Anderson, owner of 5 Star North, which works with Chinese manufacturers to make its products ranging from acrylic markers to tiki torches. "At this point the only option I see is selling out the rest of what we have and shutting our doors."

Anderson now has five employees, down from 12 at the start of the year. Three are looking for jobs and Anderson expects them to leave by the end of the month. The New Hampshire company is also running low on stock and expects to be out of most items in the next few months.

Unlike larger companies, small businesses have fewer levers to pull to help them endure the new tariff regime. Most work with a single factory or a handful of suppliers, making switching production to lower-tariff countries especially difficult. Smaller margins, thinner cash cushions and tiny staffs leave them more vulnerable to trade battles and other economic storms.

The stakes are high, and deeply personal. Finances of small businesses and their owners are often deeply intertwined, with a business its owners' largest -- or only -- asset. Personal guarantees can also make owners liable for their company's debt.

Ronak Trivedi, co-founder of Pietra, an AI-powered e-commerce operations platform, said he has seen a tariff-induced jump in small-business closures over the past four weeks. "We don't even think the worst is over," he said. As goods ordered before the policy change now arrive in the U.S. and are subject to the new tariffs, Trivedi said, "we are going to see a massive round of layoffs and shutdowns."

In April, the U.S. Chamber of Commerce called on the Trump administration to provide an automatic exclusion from the new tariffs for any small-business importer. "Small businesses do not have the margin or capital reserves to sustain the increased tariffs, nor do they have the ability to quickly modify supply chains," the chamber said.

Small Business Majority, an advocacy group, has asked the office of the United States Trade Representative, the Small Business Administration and other government agencies to provide resources to help small businesses navigate exemption requests and stay compliant with evolving tariff regulations.

"There's a lack of support coming out of the SBA," said Sarah Wells, chief executive of Sarah Wells Bags, a Virginia-based seller of breast-pump bags and other nursing items. "There are no webinars on how to find American manufacturers, no case studies on how to find experts. There are no pathways I have been able to find."

SBA spokeswoman Caitlin Odea said the agency has endorsed bipartisan plans to double SBA loan limits for small manufacturers. In the coming weeks, it will announce additional programs to match small businesses with American manufacturers, fabricators and producers, she said.

"The SBA is working to support the new America First economy with dedicated efforts to help small businesses begin building -- and sourcing products -- in America again," Odea said.

President Trump dismissed calls for small-business relief in a recent TV interview. "They're not going to need it," he said. "They're going to make so much money -- if you build your product here."

But small businesses say they don't have the resources to wait for Trump to strike a trade deal with China. Many say they can't find U.S. manufacturers to make the products they sell, or who can do it at a price customers will accept.

Some small businesses that manufacture in the U.S. are also struggling, because they rely on imported materials. Joe Bissonette, whose company, Sky View Tents, produces tents in Colorado from Chinese fabric, decided not to reorder supplies for a summer restocking. Instead he will produce fewer tents -- 300 instead of a planned 600. As a result, he laid off one worker on his fabrication team of five.

Bissonette, who had planned to self-fund his business, is now looking for investors. He plans to give up a stake in the startup in exchange for cash to resupply materials and ride out the tariff storm.

Lisa Popowich and Jonathan Stein, owners of Think Tank, didn't know how big the tariff bill would be until they opened their latest United Parcel Service invoice earlier this month. The pair weren't sure whether recent exemptions would lower charges on specific items. The company makes watches, watch bands and medical-alert jewelry in China.

The bill showed tariffs as high as 161% per item, adding $8,752 to the $5,649 order.

"I wanted to throw up," Popowich said. "An item that would have cost me $4 two months ago, now it costs me $7.92." She is now calling wholesale customers to see whether they will agree to pay higher prices.

The Colorado company negotiated a new lease for its office space, set to take effect in October, but has yet to sign the agreement. "Our margins have evaporated and gone into the negative," Popowich said.

Alfred Mai, co-founder of ASM Games, has drawn down his company's credit line and liquidated personal bonds and money-market funds to raise cash to cover tariffs on the holiday order he needs to place within the next few weeks.

"I am essentially paralyzed," said Mai, who started ASM in his living room and is the card game company's only employee. "Do I pay the tariffs to get inventory in or do I run out of inventory?"

A sales director at Mia Galison's educational toy company, eboo.com, recently pushed her to bring in more items from the backlist to better supply big customers. Galison, who founded the company, tabled the request. She is reluctant to bring in any goods from China now because the company would lose money.

"I'm 62. I don't want to risk my house in the last inning," she said. "It's really rough. If we don't have inventory, we have nothing to sell. We can't make our numbers."

Write to Ruth Simon at Ruth.Simon@wsj.com

(END) Dow Jones Newswires

May 11, 2025 09:00 ET (13:00 GMT)

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