America’s small businesses are buckling under the strain of economic chaos under the second Trump administration.
The squeeze—driven by President Donald Trump’s flip-flopping on tariffs, surging energy costs, and the wider fallout from his war with Iran—marks a sharp reversal, according to The New York Times.
Owners appear to have begun the year cautiously hopeful as inflation cooled, borrowing got cheaper, and the president’s many trade wars finally looked predictable enough to plan around.
That optimism is now gone, the newspaper reports. Trump’s war in the Middle East has driven fuel and building-supply prices higher, inflation has picked up again, and the odds of further rate cuts this year are dimming.
Trump and Iranian officials announced the outline of a deal to halt the fighting on Sunday. The president is already under fire for what critics say amounts to a litany of concessions for very little in return, with the economic damage caused by the conflict likely to linger for months.
“It has been a fight like has never existed before,” Bruce Jovaag, the 68-year-old owner of Norse Construction, a home-remodeling firm in Fenton, Missouri, told the Times. He started his business in 2013 and enjoyed sales of around $1 million during what he calls strong years.
They fell by almost a quarter last year, with a $3,000 tax refund barely offsetting the $10,000 he drained from savings to stay afloat. “It’s been a nightmare,” he said. “I’m ready to retire.”
Jovaag’s gloomy view of the future is not an isolated one. In May, the National Federation of Independent Business posted its bleakest economic outlook since Trump’s second-term win, the Times reported.
Wholesale prices climbed 1.1 percent that month and 6.5 percent over the year—the steepest annual jump since Nov. 2022, according to the Bureau of Labor Statistics.
Bankruptcies among small firms, which drive nearly half of the nation’s jobs and most new hiring, have also risen in the months following the introduction of the latest tariffs. The White House, for its part, would appear to be looking at an altogether different picture.
Kelly Loeffler, a billionaire Trump backer who now heads the Small Business Administration, told a summit last month that “America First policies are restoring the American dream on Main Street to new heights.”
Francesca Costa and her fiancé, who run the juice bar Cranky Carrot Juice in Houston, Texas, have had to raise prices by 50 cents on cold presses and a dollar on smoothies for fear of having to shut down. “We are very worried,” she said. “It is a very real possibility that we could also have to close.”
The Daily Beast has contacted the SBA and White House for comment on this story.
