NextFin news, On Friday, October 10, 2025, small coffee shops and other small businesses in Iowa and nationwide are facing significant financial strain as a result of tariffs implemented under former President Donald Trump’s administration. These tariffs have led to increased costs for imported goods, including essential supplies such as disposable coffee cups, packaging, and ingredients, forcing many small business owners to consider raising prices or even closing their doors.
Katrina Golden, founder and CEO of Lil Mama's Sweets and Treats, a bakery and coffee shop located inside the VA hospital in Augusta, Georgia, described the impact of tariffs on her business. She reported that the cost of disposable coffee cups, a critical supply for her to-go coffee service, has nearly doubled—from $100-$150 per case to $200-$250 per case—due to tariffs on imported goods. Golden also noted that her overall supply costs have risen sharply, affecting her ability to keep prices affordable for customers, many of whom are veterans and hospital workers.
Golden explained that the uncertainty surrounding tariffs has made it difficult to plan for the future. She recalled being offered the chance to lock in prices before tariffs took effect but lacked the capital to stockpile supplies. Since then, her sales have declined, including a sharp drop in large catering orders during the Masters golf tournament, a key revenue period for her business. Golden warned that by the first quarter of 2026, she may have to either raise prices or close her coffee shop if conditions do not improve.
Similar stories have emerged from small businesses across the country. Dilawar Syed, former Deputy Administrator of the U.S. Small Business Administration and current professor at the University of Texas at Austin, highlighted that 97% of importers in the U.S. are small businesses, many of which rely heavily on imports for their operations. He emphasized that tariffs have created a new layer of costs and bureaucratic hurdles, such as dealing with Customs and Border Protection fees, which many small business owners are ill-equipped to manage.
Small business owners also report that the elimination of the de minimis rule, which previously exempted small-value imports from tariffs, has further increased costs on everyday items like coffee stirrers and packaging. These cumulative cost increases have forced some small businesses to reduce inventory, cut back on orders, or close entirely. In Augusta alone, three bakeries have shut down this year, according to Golden.
On the other hand, Kelly Loeffler, head of the U.S. Small Business Administration under the Trump administration, has defended the tariffs, stating they protect American manufacturers and workers by reducing reliance on foreign imports, particularly from China. Loeffler argued that small businesses are investing and benefiting from the administration’s economic policies, citing an 80% increase in SBA loan volume compared to the previous administration. However, these claims have been contested by small business advocates and data showing widespread price increases and financial strain among small enterprises.
Gabe Modert, owner of Industrial Service and Design, a small tooling manufacturer in Williamston, Michigan, described how tariffs and related uncertainty have led to a 50% cut in production orders from key clients, resulting in lost revenue and the need to pivot to other business areas. Modert expressed frustration with the lack of stable trade policies, which complicate long-term planning for small businesses.
Experts warn that the ongoing tariff policies and trade uncertainties risk undermining the economic recovery post-pandemic by forcing small businesses—key drivers of employment and community growth—to downsize or close. They call for predictable trade policies and targeted relief measures, such as the proposed Small Business Relief Act, which would exempt small businesses from certain tariffs and refund duties already paid.
As of October 2025, small business owners like Katrina Golden continue to navigate these challenges day by day, hoping for policy changes that will allow them to sustain their operations and serve their communities without passing excessive costs onto customers.
Explore more exclusive insights at nextfin.ai.
