Since President Donald Trump was elected in November 2024, the term“tariff” has become a staple in the American vocabulary.
While “tariff” was a recurring buzzword throughout Trump’s reelection campaign, it wasn’t until after he was elected that the United States truly became acquainted with the reality of his economic plan. From rising diplomatic tensions and the early stages of a trade war with China to a volatile Wall Street and increasing consumer prices, it is unclear whether the U.S. is merely in the “transition period” Trump has been affirming or the onset of a recession.
On-Again, Off-Again: The Ups and Downs of Trump’s Tariffs
Modern Republican presidents have traditionally favored economic and trade policies centered around deregulation. Trump, on the other hand, has advocated for and implemented protectionist measures such as tariffs.
Trump’s earlier experiments with tariffs, which largely focused on limiting taxes on imports such as aluminum and solar panels, pale in comparison to his recent efforts to drive manufacturing back to the United States.
Beginning on February 1, 2025, Trump announced a 25% tariff on non-energy imports from Canada and Mexico and a 10% (later 20%) tariff on China. He also began implementing tariffs on copper, steel, aluminum, and other raw materials. This was only a prelude to a large-scale reciprocal tariff plan that saw a large proportion of countries facing a 10% blanket tariff as well as additional tariffs based on their trade surplus with the U.S.
This meant that countries like Lesotho, which designates nearly 75% of its exports to the U.S., were forced to pay tariffs of up to 50%. One of several African nations to benefit from the 2000 African Growth and Opportunity Act, Lesotho has become a major base of American textile manufacturing; not only do the tariffs threaten their export capacity, but they could result in wide-ranging financial repercussions that could significantly damage the fabric of their economy.
On April 9, though—just a week after “Liberation Day” when he announced his sweeping tariff plan—Trump agreed to a 90-day pause on the reciprocal tariffs for most countries, instead returning to the 10% tariff baseline he had pledged to establish. However, not all countries were spared; in fact, the tariffs on China were increased to 125% after they retaliated with tariffs of their own.
The rising friction with China has already sparked the beginning of a trade war, and tensions have escalated between the U.S. and other countries as well. However, the impacts of Trump’s tariff plan extend beyond just diplomatic relationships; the economic strains have resulted in a fluctuating stock market and economic insecurity at home. Despite Trump’s proclaimed mission to bring manufacturing jobs back to the U.S., American businesses—large and small—have been forced to deal with higher supply prices, a cost that is typically passed onto consumers through raised retail prices.
The Retail Response: The Commercial Sector Fights Back
As so many American businesses rely on labor and resources from foreign countries, their costs and profits have been dramatically warped by the Trump Administration’s tariff plans. International corporations like Walmart, Target, and Best Buy have announced their intention to raise prices in response to the tariffs, while companies like Mattel and American Eagle are being forced to reconsider their profit outlook and full-year guidance. A survey conducted by Chief Executive Group and AlixPartners reports that 68% of U.S. CEOs have already raised prices or anticipate doing so due to the economic impacts of the tariffs.
In April, controversy arose after Amazon considered the idea of displaying tariff costs next to a product’s price. The White House was quick to respond, with White House Press Secretary Karoline Leavitt labeling the proposal a “hostile and political act.” Soon after, Amazon backed down and scrapped the proposal.
However, it’s not just big business that has been affected; small businesses have faced an even more significant burden from the hiked prices placed on imports as a result of Trump's sweeping tariffs. Five small businesses, including wine company VOS Selections, fishing tackle and apparel company FishUSA, electronic education business MicroKits, women’s cycling company Terry Precision Cycling, and ABS pipe business Genova Pipe, are taking action. This legal battle involves the businesses being represented by the Liberty Justice Center, a nonprofit, against the Trump Administration. These particular businesses represent just a cross-section of the struggles small businesses are facing due to the tariffs and fluctuations in economic policy.
After taking the case to the U.S. Court of International Trade, on May 28, 2025, a three-judge panel ruled in V.O.S. Selections, Inc. v. Trump that the “Liberation Day” tariffs were unlawful. Despite Trump’s attempt to use the International Emergency Economic Powers Act to justify the tariffs, the court saw it as an infringement on Congress’s power to implement taxes.
“This ruling reaffirms that the President must act within the bounds of the law, and it protects American businesses and consumers from the destabilizing effects of volatile, unilaterally imposed tariffs,” said Jeffrey Schwab, Senior Counsel and Director of Litigation at the Liberty Justice Center, in a press release.
While the Liberty Justice Center views the court order as a win, the Trump Administration has been quick to file an appeal, and the tariffs will remain in place until the next arguments take place on July 31. For now, businesses will stay caught in limbo between the burden of heightened resource costs and the threat of rising prices for consumers. While this may place a strain on large companies, the true impact is on the small businesses—American businesses that have long been backed by Republicans, which are now struggling to stay afloat.