At a recent special event for small business owners, John Murphy, head of the US Chamber of Commerce vice president, chief insurance officer and strategic advocacy vice president, John Murphy, international vice president, shared the latest in tariffs and how they are affecting small businesses.
The duo will break down trade tariffs, what is the tariff, what is not, and what may happen next.
Bradley explained that these duties are different from other previous duties.
“We’re used to some degree of tariffs in history and commerce,” Bradley said. “The tariffs imposed this year fall under the International Emergency Economic Force Act (IEEPA). The benefit from the administration’s perspective is that no notice or public comment is required to make any changes.”
“In the past, it took years to negotiate trade agreements with other countries. It’s very difficult to predict how many people will negotiate in 90 days and when it will occur,” Bradley said.
The administration has two options for the future, Bradley said. “They were able to extend the suspension or expire the suspension. It’s difficult to predict where most countries and most products will be 30, 60, 90 days or later.”
(For more information, see SMEs and Medium Enterprises are affected by trade tariffs.)
Bradley said the uncertainty is creating practical problems for small businesses.
These include:
The receiving company will notice that foreign suppliers have stopped delivering their products. Traditional customs bonds no longer cover imports. Existing contracts at fixed prices are suddenly subject to higher tariffs. You are trying to determine whether it makes sense to change a foreign supplier. Supply Chain Issues When others in the supply chain rely on foreign suppliers.
Bradley suggests that small businesses reconsider their contracts to determine whether there are clauses that allow changes based on tariffs and other supply chain delays.
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What are the latest tariffs affecting small businesses?
“The tariffs have been around for a long time,” Murphy said. “Some of them are just part of the international trade landscape. But the tariffs imposed so far have been exposed to many waves.”
25% tariff on goods from Canada and Mexico. These tariffs were imposed on all goods that were not in accordance with the US-Mexico-Canada (USMCA) trade agreement that President Trump negotiated in his first term in office at the beginning of March. Today, half of everything coming in from Canada and Mexico is subject to tariffs. A series of tariffs on goods from China. We have seen an impressive series of six wave tariffs imposed on all goods from China. A 145% tariff is in effect, adding to the tariffs that President Trump imposed on goods from China in his first term. Therefore, it is about 170% obligation. It is almost impossible to trade under these conditions, and this has had a major impact on many companies. The 25% tariff is on steel and aluminum imports. The tariffs imposed on steel and aluminum imports from all countries also apply to so-called “derivatives.” These are products containing many steel and aluminum, and customs duties apply to that share of content of products containing intakes related to automobile imports. As of April 3, duties are imposed on all imports of cars from all sources, and on May 3, the obligation is expected to be imposed on all auto parts that enter the country. On April 2nd, the introduction of so-called mutual tariffs was seen. All goods worldwide are 10% obligations, with around 57 largest trading partners, which is a rather high obligation. For a period of several hours, these duties were well above 20% for all products from the European Union, 24% for products from Japan and 40% for many of Southeast Asian countries.
Which customs duties have been suspended?
The suspension of customs duties was only over 10%. The 10% tariff is still in force, and it’s still a pretty big deal. We currently have the highest tariffs in recent history. The United States is one of the most customs countries in the world.
How do these tariffs affect the US economy overall?
Increased consumer costs
The tariffs that have been imposed so far are expected to cost around $4,000 on a typical American household, and tend to have what economists call a regressive effect. This means they are heavy in low-income households. This tends to spend most of your income on traded goods.
The decline in the global competitiveness of US manufacturers
All 56% of the US imports are actually raw materials, parts, components and capital goods that manufacturers use to manufacture products here in the US. These higher costs fit the manufacturer’s margins perfectly. In many cases, you are forced to raise prices.
When manufacturer costs rise, it undermines our global competitiveness. About half of everything US manufacturers make is actually for the export market. Therefore, if their prices were forced, they would not be able to compete in the international market.
Potential global retaliation
Tariffs cause retaliation. Canada is the world’s largest export market, and Canada, the closest trading partner, is retaliating against billions of dollars in US exports. In particular, in the automotive sector, they reflect U.S. automotive rates. The European Union retaliated against tariffs on steel and aluminum, while China retaliated very extensively. This drips down the economy and has a wide range of impacts.
Why is the current tariff situation so unpredictable?
Due to the way this year’s tariffs have been implemented so far, what will happen in the future is particularly difficult to predict. Tariffs change from time to time, especially when there is a dispute with a country or a new trade agreement. However, there is usually a process involved (i.e., notifications, public comments) and there is some time before it changes to a duties or mandatory rate.
What could happen next with customs duties?
In fact, tariffs can change with almost every notice given the authority that it is being done underneath. However, there are a few things you can search for as a kind of guide post.
10% tariffs could stay here
First, there appears to be a consistent message from the administration that this baseline 10% tariff is something that could be intended to remain intact. In particular, this 10% may be much lower than some of the tariffs spoken on April 2nd. However, in terms of looking back just a few months ago, there is about four times the average tariffs applied in most countries.
Additional customs duties may take effect
We also know there are other tariffs that are moving through the process, such as lumber and medicine. There’s a story about semiconductor tariffs, but they’re all like going through a process, and that can be added to the tariffs we currently have.
There may be negotiations on bilateral trade agreements
Regarding the suspension, it has been shown that the administration wants to negotiate a bilateral agreement with other countries during this period. In the past, it usually took years to negotiate bilateral trade agreements between the United States and other countries. It is undoubtedly likely that this could be promoted, but it is extremely difficult to predict the number of trade agreements that can actually be negotiated in 90 days.
For more information about US Chamber of Commerce’s tariff compensation, see:
The US Chamber of Commerce will quickly terminate tariffs that have come into effect. It highlights the true harm to American businesses, workers and consumers.
US Chamber of Commerce: It’s time to accelerate the growth agenda instead of tariffs
How broad tariffs bring growth to us and prosperity is at stake?
“Survival Issues”: Small and medium-sized businesses talk about tariffs
Share small business customs stories at the US Chamber of Commerce: https://www.uschamber.com/action/share-your-story-trade
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Released on April 11, 2025
