Tariffs have been a contentious issue in US trade policy for centuries, but their effects are still felt today. Introduced by King George III 250 years ago as a way to boost government revenue, tariffs involve taxes placed on foreign goods and materials imported into the United States.
The impact of tariffs can be significant, particularly for small businesses that rely heavily on imports from abroad. When tariffs are imposed, companies often pass on the increased costs to consumers in the form of higher prices. However, not all businesses take this approach; Harley-Davidson, for instance, absorbed a 25% tariff on European Union gas motorcycle imports in 2021.
Governments impose tariffs for various reasons, including generating revenue and protecting domestic industries. The recent EU threat of a 50% levy on Harley-Davidson imports as of April 1, 2025, highlights the complexities of global trade. For small businesses, understanding how tariffs work and their potential impact can be crucial to navigating these challenges.
Source: https://www.fastcompany.com/91297930/why-tariffs-are-likely-to-hurt-american-small-businesses