FOR IMMEDIATE RELEASE
December 5, 2025
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ICYMI: Tariffs Drive Job Losses for Small Businesses and Manufacturing
New economic data shows growing pressure from tariffs on small businesses and manufacturers. ADP’s November employment report revealed that private sector firms cut 32,000 jobs in November overall. The decline was led by small businesses, which lost 120,000 jobs in November. Meanwhile, a new survey from the Institute of Supply Management indicated a continued decrease in employment.
Since April, Trump has imposed across-the-board tariffs of 10%–50% on nearly all imports, with higher rates for dozens of countries and industries. The average tariff rate now tops 16.8%, the highest since 1935.
“It just seems to be a classic case of the sort of canary in the coal mine scenario,” Sean Higgins, research fellow at the Competitive Enterprise Institute, told FOX Business.
“There’s a lot of economic uncertainty right now due to tariffs and other things, and the smaller businesses are having a harder time weathering that, waiting for things to go through.”
The Main Street Alliance, which consists of 30,000 small-business owners, blamed President Donald Trump and his fellow Republicans for the difficult conditions.
“Today’s ADP report showing a loss of 120,000 small business jobs in November highlights the lasting damage of Trump-era and Republican economic policies,” Richard Trent, the group’s executive director, told NBC News. “Trade wars, healthcare cuts, and tax breaks for big corporations have left Main Street businesses struggling to hire and grow.”
One manager in the electrical equipment, appliances and components business said tariffs are causing a tougher business climate than during the Covid crisis.
“Conditions are more trying than during the coronavirus pandemic in terms of supply chain uncertainty,” the respondent said.
To Dean Baker, a co-founder of the Center for Economic and Policy Research, tariffs have been largely to blame for the uncertainty and “overall weakness in demand” that has driven cautious hiring across blue-collar sectors.
“Companies are reluctant to invest in a context where they have no idea what tariffs will be in place six months from now, much less three to five years from now,” he told Newsweek. “Also, tariffs pull money out of consumers’ pockets, reducing demand.”
- The New Republic: Trump Official Panics as Brutal Jobs Report Blames Trump’s Tariffs
“Larger companies are still hiring,” wrote Heather Long, chief economist at Navy Federal Credit Union, on X. “Smaller firms (under 50 workers) are doing the layoffs. It’s been a very tough year for small biz due to tariffs and more selective spending from lower and middle-class consumers.”
In an interview with investor and entrepreneur Nikhil Kamath released on Sunday, Musk said he warned Trump against tariffs, arguing they “create distortions in markets.” The Tesla CEO has previously expressed concern that import taxes would cause a recession and drive up the prices of goods. In April, the EV maker stopped taking orders for some models in China, which then faced a retaliatory 125% tariff.
“The president has made it clear he loves tariffs,” Musk said in the interview. “I’ve tried to dissuade him from this point of view, but unsuccessfully.”
The report said that tariffs and retaliatory trade policies by the Trump administration are contracting real GDP growth, driving up costs, and creating widespread uncertainty that restrains business investment. As a result, regional employment growth has weakened across most sectors in 2025 and is projected to soften even further into the first half of 2026, the report said.
Tariffs and trade tensions are a big part of what’s keeping decisions on ice: when firms can’t predict input costs or export demand, they tend to hold off on both expansion and layoffs. That leaves the labor market idling in neutral – not strong enough to fuel confident wage gains, but not weak enough to trigger bold policy moves either.
“We are starting to institute more permanent changes due to the tariff environment,” said one business executive in the transportation equipment sector. “This includes reduction of staff, new guidance to shareholders, and development of additional offshore manufacturing that would have otherwise been for U.S. export.”
Reporting on these new numbers, CNBC host Steve Liesman said that Trump’s tariffs may be to blame for some of the pain felt by small businesses.
“That’s the fourth negative number in the past six months,” Liesman said. “The estimate was for plus 40,000, so the street was off on this one… Small business getting hammered and there is some information that some of this may be coming from being hammered by the tariffs.”
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Economists said middle- and lower-income Americans are being squeezed by President Donald Trump’s tariffs and stagnant job growth, creating a K-shaped economy. Goldman Sachs warned that cuts to Medicaid and SNAP will further depress low-income spending in 2026.
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About Tariffs Cost US
Tariffs Cost US is a campaign dedicated to providing the public with reliable, comprehensive information about global trade and tariffs and their impact on both businesses and consumers. More information is available at tariffscostus.com.
