Tariffs and Bankruptcy

Small businesses are feeling the pressure that tariffs are causing, which has resulted in cuts to production and jobs, and even bankruptcies and company closures. The impacts of the tariffs on businesses who simply have no cushion to protect them has been devastating:

• Increases in costs of everything from raw materials to finished products, leaving companies with the option of either absorbing those costs and reducing profits, or raising prices for their consumers, which results in fewer purchases and a resulting profit loss.
• High costs combined with lowered demand means hiring freezes and layoffs put American workers in a bind.
• As production is paused or rerouted, shipments are in a state of flux, leaving retailers and customers alike uncertain.
• That uncertainty makes it difficult for companies to plan, invest, or manage inventory, and makes it impossible for workers to have any job security.

Small Businesses

The Center for American Progress goes so far as to say that small businesses are being crushed by the trade wars currently playing out across the globe. With the manufacturing sector decimated, freight contracts are shrinking, ports are deserted, and American workers are finding themselves looking for work. Corporate bankruptcies have already climbed nearly eight percent this year, putting more workers in peril. Since small businesses employ almost half of all workers across the country, these furloughs, layoffs, and firings are one key way for businesses to deal with falling demand, higher operating costs, and higher borrowing rates. Unfortunately, most small businesses operate with pretty thin margins, allowing for little leeway when under pressure.

Manufacturing Price Index

The manufacturing price index comes from a survey of purchasing managers in the manufacturing business. The increase from December 2024 to April 2025 was a whopping 17 points. The distress can only mean production lapses, layoffs, and bankruptcy, and when one supplier in a chain suffers, the whole system is at risk, just like a row of dominoes.

Investor Sentiment

As confidence in the United States at home and abroad slides, the value of our dollar begins to fall, further impacting Americans. Borrowing becomes more expensive, bond yields surge, and opportunities for individuals and businesses alike shrink.

For businesses, retaliatory tariffs contribute to a decline in exports, and, to be honest, consumers worldwide have been protesting U.S. products — all adding to the crisis here at home.

Dealing with Bankruptcy

Corporate and individual bankruptcy looks to be in the future for many hard-working Americans. If one of them is you, contact the experienced Miami bankruptcy attorneys at The Law Office of Julia Kefalinos to discuss your options with an attorney who advocates for you.

Source:

cbsnews.com/news/jobs-manufacturing-trump-tariffs-economy/