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Tariffs and Small Businesses: State of Emergency or Big Opportunity?

Before Liberation Day 2025, the average entrepreneur may not have known much about tariffs or the impact they could have on their business. Now, tariffs are in the news cycle regularly, and many business owners are scrambling to learn how to cope with their impact. Others are using the shifting trade policies as an opportunity to innovate. Let’s take a look at both sides of the story.

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What Is a Tariff?

If you aren’t quite sure what a tariff is or haven’t thought about them since your high school history class, it’s a government-imposed tax on items entering a country.

For example, if a toy company manufactures products in China and the U.S. imposes a tariff on Chinese imports, the importer—typically the U.S.-based company—must pay the tariff when goods enter the country. It is then up to the toy company to decide how to cover the increased cost of doing business. Often the costs are passed on to the customer in the form of higher prices.

Onshoring Opportunity

There are a couple of reasons why world leaders raise tariffs. One is to protect the public from cheaper, lower-quality goods that could hurt citizens and don't meet U.S. safety standards.

Another major reason is to encourage nearshoring (also called onshoring) and strengthen U.S.-based manufacturing. Many businesses are already embracing marketing monikers like “locally grown” or “Made in the USA,” and the federal government has set up a portal to help businesses find domestic sourcing partners.

According to JungleScout’s recent Tariff Index, online searches for “Made in the USA” surged 5x following the Liberation Day announcement, signaling a potential growing interest from consumers in products sourced within the U.S.

From ‘Shark Tank’ to State of Emergency

Tariffs are already taking a major toll on small businesses, with categories like apparel, housewares, baby products, pet care, and toys hit hard because they often have their products manufactured in the countries where tariffs are being imposed. The up-and-down nature of the tariff announcements has also simply made it impossible for small brands to plan inventory and forecast for major selling events like Amazon Prime Day, back to school, and holiday shopping.

Consider the story of Rinseroo, a popular slip-on shower hose that makes rinsing tubs, showers, and even pets a breeze. In the same year that they wowed the sharks on “Shark Tank” and walked away with the coveted Golden Ticket, the possibility of astronomically high tariffs on Southest Asian imports took them to a near state of emergency.

Co-founder Lisa Lane says while she’s not opposed to the concept of tariffs, they could unfairly hit small businesses hard. For Rinseroo, producing the product domestically isn't realistic. “I've gotten quotes. It's not just more expensive—it's wildly more expensive. The materials, the tooling, the infrastructure—it's just not there for a business of my size.”

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What Can Small Businesses Do?

Being able to identify and adjust to changing tariff impacts in real time is becoming a competitive necessity today. While small brands can’t easily absorb rising shipping and sourcing costs like some larger brands, they are often more agile, able to pivot and innovate faster than larger competitors.

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Get a GS1 Barcode to Optimize Sourcing, Tracking, and Selling

GS1 US and the globally accepted barcodes we offer can help you become more adaptable to the uncertainty of retail today. Having a GS1® barcode that connects your brand to your product can help your company track and sell products across increasingly complex supply networks.


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Diversify Suppliers

A strategy that may also be helpful is to diversify suppliers. Learn more about GS1 US and Alibaba.com’s jointly released guide “Mastering E-Commerce: A Guide for U.S. Companies,” which helps businesses understand why a foundation of data based on GS1 barcodes is helpful when sourcing and selling products internationally.


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Speed Up Sustainability Initiatives

For example, by finding more cost-effective product components, the total price to make the product should decrease. Also, consider the price of materials for packaging, such as recycled paper products over foam inserts.

Ultimately, no matter where your business stands, tariffs have led to an important conversation in the supply chain world about supplier relationships and global sourcing and selling. GS1 Standards, such as the UPC barcode, are globally recognized and have enabled companies to do business beyond boundaries for decades.


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