Jared Hendricks calls them his “demons.” They are the thoughts that wake him in a panic at two or three in the morning. “How am I going to pay for this? Or how am I going to make this work? What have I done?” he wonders. Hendricks, the founder of Village Lighting, a two-decade-old business selling Christmas decorations, is not being haunted by poor business decisions or a lack of grit. He is being haunted by his own government. Under Donald Trump’s chaotic and punishing trade war, his American dream is turning into a nightmare. “It’s to the point now where it could kill us, it could take us down, and I could lose everything,” he told CNBC.
In a heartbreaking confession that speaks for thousands of entrepreneurs across the country, Hendricks added, “Being a small business owner isn’t for you when your country turns on you.”
Hendricks is not alone. In an assault on the very people he promised to protect, Donald Trump’s erratic tariff policy is crushing the backbone of the American economy: its small businesses. While Trump and his mouthpieces insist that foreign countries are footing the bill for his trade war, a devastating new analysis and the harrowing stories of business owners reveal a brutal reality. The cost is being paid by American consumers and entrepreneurs, amounting to one of the most egregious betrayals of his supporters and a massive hidden tax on working families.
A new report from S&P Global lays bare the staggering scale of the damage. By the end of 2025, Trump’s tariffs will gouge a $1.2 trillion hole in the global economy. But the lie that foreign exporters will absorb this blow has been thoroughly debunked. According to the firm’s analysis, which it calls conservative, corporations will only shoulder about one-third of the cost. The rest – a jaw-dropping $800 billion – fall directly on the shoulders of American consumers. That amounts to a hidden tax of over $2,500 on every single American, making everyday goods from shoes to car parts to Christmas lights more expensive. As S&P Global’s report grimly states, “consumers are paying more for less.”
This is the opposite of the populist rhetoric Trump sold to his voters. He promised to fight for the forgotten man and woman, yet his policies are draining their wallets. The White House continues to push the fiction, with spokesman Kush Desai stating, “the cost of tariffs will ultimately be borne by foreign exporters.”
Tell that to Viresh Varma. The 64-year-old CEO of AV Universal Corp., a small footwear company, told CNBC he has trouble sleeping. To get his inventory for the holiday season, he was forced to take out a $250,000 loan with a punishing 32% interest rate just to pay the tariff bill. A container of shoes that once cost him $7,500 in duties now costs multiples of that. He has already cut salaries and frozen hiring. Layoffs are next if sales don’t pick up, but he’s been forced to raise prices, which has already caused sales to plummet 30%. Varma is a fighter, but he is fighting a war declared on him by his own president.
These small businesses are what Kent Smetters, a professor at the University of Pennsylvania’s Wharton School, calls “the canary in the coal mine.” In an interview with CNBC, he warned that the pain they feel today is a dire warning for the rest of the economy. “They’re going to get hit first, and then I think you’re going to see more of an impact with some delay on larger businesses,” Smetters said.
The stories are a litany of despair, each one a testament to the incompetence of Trump’s waffling tariff policy. David McClees of Talus Products, which sells travel accessories, has seen a “severe crimp” in his profitability. Paul Cosaro, whose family has run Picnic Time for 43 years, said the tariffs have “stifled innovation” because there’s “no room for error.” Sales are down 20%, and he’s waiting until the last day of the year to see if he’ll even turn a profit.
The cruelty of the policy is matched only by its ineptitude. A central promise of Trump’s “America First” agenda was that tariffs would force companies to bring manufacturing back to the United States. The reality on the ground shows this to be a catastrophic failure. Business owners who have tried to onshore production have found it impossible. Liz Picarazzi, founder of the rat-proof trash bin company Citibin, originally manufactured in the U.S. but told CNBC she had to move production to China because American producers couldn’t meet her needs on price, quality, or timing. When she later tried to escape Chinese tariffs by moving to Vietnam, Trump slapped new duties on Vietnamese goods, making her effort “somewhat pointless.” Paul Cosaro of Picnic Time looked into moving production to the U.S., but said he simply doesn’t have the budget to take the risk.
Instead of a renaissance of American manufacturing, Trump has created a hopeless game of whack-a-mole, where small businesses are bludgeoned no matter where they turn.
This leaves a burning question: if the tariffs are failing to revive U.S. manufacturing and are instead taxing American families and destroying small businesses, what is their true purpose? Trump’s policy proposals have grown increasingly outrageous, including a threat to put a 100% tariff on all Chinese goods. Critics have noted that these drastic economic policies, which create constant chaos and dominate headlines, serve as a convenient distraction from a growing list of scandals plaguing the president, including swirling questions about his connections to the sex trafficker Jeffrey Epstein as he declines to release relevant files. While small business owners are kept up at night by financial demons, the architect of their misery deflects attention from his own.
The final insult is that Trump’s trade war may even be illegal. A federal court has already ruled against the tariffs, a decision the White House has appealed to the Supreme Court. While the conservative-leaning court weighs the case, the economic demolition continues unabated.
From Jared Hendricks using his home equity to pay duties, to Viresh Varma taking on predatory loans, to Paul Cosaro watching his family’s legacy crumble, the message is clear. This is not a strategic policy to restore a fair trade balance. It is a reckless, politically motivated attack on the American people, cynically disguised as patriotism. It is a transfer of wealth not from foreign nations to the U.S., but from the pockets of working families and the life savings of small business owners into government coffers and the abyss of a failed economic experiment.