Mere hours after the Trump administration's latest tariff scheme launched on July 24, the government was sued again by the same small businesses that had already defeated prior White House tariff shenanigans, most notably at the Supreme Court. As Bloomberg Law reported, these companies are part of an “increasingly vocal cohort of business owners who emerged as the face of mom-and-pop tariff resistance.” What about Walmart Inc., Ford Motor Co. and the other titans of corporate America paying many millions of dollars in new import taxes? They’ve mostly kept quiet.

Much of this silence, the report explains, is strategy: Large U.S. firms don’t like the tariffs but have routed their objections through industry associations and legal filings to avoid blowback from the government or partisan customers. Doing so arguably makes good business sense, given President Donald Trump’s repeated targeting of companies that criticized his tariffs, publicized their price effects, or sought refunds following the White House’s Supreme Court loss. When a single presidential tweet can cause a company’s stock to crater, it’s often smarter to let smaller, more sympathetic firms “carry the water,” explained one trade lawyer.

Yet the silence from large firms – and the noise from small businesses – reflects a harsh financial reality: For big companies, the tariffs are a nuisance while for most all others they’re an existential threat hitting from three different directions. Given that smaller businesses employ almost half of America’s private sector workforce – and that they’re what eventually become market-driving big businesses – these disadvantages mean real economic harm, now and in the future.

The first hit is the taxes themselves. Between January 2025 and June 2026, the government collected almost $284 billion in gross import taxes, roughly 90% of which was paid by American importers, including tens of thousands of small businesses. The Center for American Progress estimates that the average small business importer’s bill was around $306,000 larger during the first year of Trump’s tariffs than in the prior 12 months. Firms with fewer than 50 employees paid roughly $175,000 more.

Research shows that around half of all U.S. tariffs were absorbed by importers last year instead of passed on to customers and end-consumers, and the Federal Reserve’s latest Small Business Credit Survey reported that 60% of U.S. small businesses ate at least some of their new tariff costs. No surprise, then, that the same survey found that 42% of small firms – mostly in retail and manufacturing – reported that increased tariff costs were a top financial challenge.

Most everybody bears a direct tax burden, but tariffs disproportionately harm smaller businesses, leading to the second hit. Unlike income and sales taxes, companies generally pay tariffs to the government upon an item’s entry into the country and long before a single unit is sold. Diverting working capital to pay these taxes or secure customs bonds is a particular problem for smaller companies without the deep cash reserves or easy access to capital markets that large, public companies have. Many small firms have taken on debt to pay the tariffs or drained their personal savings, and stories abound of businessowners forced to pay surprise tariff bills by running up credit cards, emptying retirement accounts, taking out second mortgages, or turning to costly loans or cash advances. They can only repay these debts when they make a sale.

Small firms are also at a major disadvantage in terms of the resources available to navigate the 17 and counting U.S. tariff regimes in place, up from just three before Trump’s first administration. Since 2017, the Harmonized Tariff Schedule has added roughly 800 pages, undergoing 74 separate modifications in the last 20 months. Deciphering these ever-changing tariff rules has become a full-time job at many businesses – a position smaller firms don’t have and can’t afford. Thus, as the Federal Reserve Bank of Richmond's August 2025 survey showed, around half of small and mid-sized manufacturers reported no certainty about their input costs compared with 23% for their bigger competitors.

Large firms also can deploy customs and supply chain strategies to mitigate trade costs, and they often have the market power to insist that unaffiliated suppliers or customers share any new tariff burdens. Small companies lack these relationships or the capital to forge new ones. The Fed’s small business survey thus reports that just 13% and 8% of respondents changed to domestic or different foreign suppliers, respectively, and only 3% moved production onshore. When the small business coalition We Pay the Tariffs surveyed its members this summer, just 3% had found a domestic supplier that met their specifications and budget. Instead, they just… pay the tariffs!

Large businesses have the political clout – along with lobbyists and trade lawyers on retainer – to win some of the hundreds of new tariff exemptions or protections from import competition. According to OpenSecrets, the number of firms lobbying Washington on tariffs tripled from 2024 to 2025 and continues to rise. Few, if any, small firms are spending dollars on these efforts, and none of them can obtain special tariff treatment by giving the president a golden trinket or Oval Office photo op.

Even Trump’s tariff refunds can disadvantage smaller companies – their third extra burden. The administration deserves some credit for quickly refunding the bulk of the tariffs the Supreme Court canceled earlier this year. However, because the process for delivering these refunds is not automatic – importers must affirmatively apply to get their money back – and requires legal skills and knowledge that many small businesses lack, approved tariff refunds have been concentrated in large, high-value entries made by big companies like Apple and Nike. They and other public firms have since reported receiving billions in tariff refunds, while many smaller businesses – such as two-person sneaker business Proof Culture in Ohio – have wondered whether the effort to file their refund claim is worth the $25,000 they’re still owed.

The Trump administration is challenging some tariff refunds in court, fighting a class action and insisting that importers file individual lawsuits to obtain relief for certain entries. Thousands of companies have incurred this legal expense, but tens of thousands of others haven’t – likely because they’d pay more in lawyer fees and paperwork headaches than they’re owed from the government.

Put it all together and you’re left with small companies paying unlawful tariffs and replacement tariffs, facing extra burdens when they do, and facing the worst odds of getting refunds their larger competitors are collecting, with interest. It’s a vicious triple-whammy and one baked into a tariff system with rules so complex and discretionary that they inevitably advantage the companies with the deepest pockets and priciest lawyers.

This explains the odd spectacle of American toymakers, spice importers, wine merchants, and baby retailers being the voice of the tariff resistance in the courts. For them, Trump’s tariffs aren’t just a sliver of profits – they’re life and death.

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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Scott Lincicome is an economist with the Cato Institute. He specializes in domestic policy and international trade.

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