WASHINGTON – U.S. President Donald Trump’s aggressive tariff policies are failing to significantly reduce the country’s trade deficit, despite inflicting substantial costs on American importers and consumers, according to data released Thursday by the Commerce Department. The deficit, which Trump pledged to shrink during his campaign and presidency, totaled approximately $901.5 billion in the past year, a mere $2 billion decrease from 2024.
The persistent deficit stems largely from a 2.1 percent increase in the trade of goods, reaching nearly $1.241 trillion, while the surplus in services grew by 8.9 percent to $339.5 billion. These figures reach despite the imposition of numerous tariffs on goods from dozens of countries, including China and the European Union, beginning in January 2025.
Trump’s administration has consistently argued that these tariffs are necessary to protect American industries and level the playing field in international trade. However, a study by the Kiel Institute for World Economics found that American importers and consumers bear the overwhelming majority – 96 percent – of the cost of these tariffs. “The tariffs are a self-goal,” said Julian Hinz, research director at the Kiel Institute. “The claim that foreign countries are bearing these tariffs is a myth. The data shows the opposite: Americans are paying the bill.”
The impact is particularly acute for small businesses. A report from the Senate Committee on Small Business & Entrepreneurship details that 36 million small businesses and their employees have faced increased costs since Trump took office, encompassing expenses like healthcare, energy, food, childcare, and housing. Between March and November 2025, these small businesses paid a collective $63.1 billion in tariffs, with November alone accounting for $8.1 billion. The report estimates that continued tariffs could cost small businesses $100 billion in 2026.
The economic strain extends to manufacturing. U.S. Production has declined for ten consecutive months since Trump’s “Day of Liberation” in April, with 72,000 factory jobs lost during that period.
Small business owners are increasingly vocal in their opposition to the tariffs. Jennifer Bergman, owner of West Side Kids, a Latest York toy store founded by her mother in 1981, was forced to close her business due to the increased costs of importing goods from China, where tariffs reached as high as 145 percent. “It’s crazy. I don’t know what to do, I can’t sell,” Bergman said. She described closing the store as “the hardest thing” she’s ever done, emphasizing the importance of small businesses to the American economy.
Gabe Hagen, owner of Brick Road Coffee in Arizona, explained that tariffs function as taxes. To offset the increased costs, he would need to cut 20 hours of labor, equivalent to a part-time employee. He noted that less than one percent of coffee is grown domestically, making the tariffs particularly burdensome. Sari Wiaz, inventor of Baby Paper, a calming toy for infants, stated that a tariff increase from 10 to 30 percent forced her to raise prices by 15 to 20 percent, a level she deems unsustainable.
The growing discontent among small business owners comes at a critical juncture for Trump, as the midterm elections approach in November. Republicans currently hold narrow majorities in both the Senate and the House of Representatives. A shift in control of either chamber would significantly hinder Trump’s agenda for the remainder of his term. Recent polls indicate a potential advantage for the Democratic Party in the upcoming elections, fueled in part by economic anxieties.
The White House acknowledged the importance of small businesses during National Small Business Week in early May 2025, stating that the 33 million small businesses in the U.S. Employ 61.7 million Americans – nearly half of the private sector workforce – and create almost two-thirds of new jobs. The administration has not yet responded to requests for comment on the recent data regarding the impact of tariffs on small businesses.
