The Tariff Squeeze That Never Happened: Small Businesses Aren’t Raising Prices Because of Tariffs Bu

[mystery-ak]

The Tariff Squeeze That Never Happened: Small Businesses Aren’t Raising Prices Because of Tariffs But Profits Are Improving

John Carney 9 Sep 2025

Small business optimism ticked higher in August, as owners reported better sales expectations and improving profits but showed little evidence of passing on higher costs from tariffs.

The National Federation of Independent Business said its Small Business Optimism Index rose 0.5 points to 100.8, above the long-term average of 98. The increase was driven mainly by a six-point gain in the share of owners expecting higher real sales.

The survey showed a slowdown in price pressures. A net 21 percent of owners said they raised average selling prices, down three points and the lowest reading this year. Planned price increases also eased, with a net 26 percent expecting to charge more in the next three months. Eleven percent cited inflation as their top problem, unchanged for the third straight month.

That pattern undercuts warnings that tariffs would quickly feed into higher consumer prices or that small firms would be disproportionately squeezed by rising input costs. Instead, owners are reporting stronger earnings even as price increases have slowed. A net negative 19 percent of owners reported lower earnings, the best reading since March 2023. Among those with higher profits, nearly two-thirds credited stronger sales volumes rather than higher prices.

Credit conditions also offered relief. The average rate paid on short-term loans declined to 8.1 percent, the lowest since May 2023, reducing pressure on firms to raise prices in response to cost increases. Cheaper financing has helped businesses absorb higher input costs rather than immediately passing them on to customers.

Still, capital investment remains subdued. Just 56 percent of owners reported making capital outlays in the past six months, historically low even with improved earnings. That suggests caution about longer-term expansion despite healthier near-term profits and sales expectations.

more
https://www.breitbart.com/economy/2025/09/09/the-tariff-squeeze-that-never-happened-small-businesses-arent-passing-on-tariffs-but-profits-are-improving/

[IsailedawayfromFR]

But, but - we have been told this was a tax and would be borne by the American people with devastating results.

[Bigun]

But, but - we have been told this was a tax and would be borne by the American people with devastating results.

It's only a tax on those who insist on buying foreign made goods.

[IsailedawayfromFR]

It's only a tax on those who insist on buying foreign made goods.

And after all, it is not even a tax as per the CBO

[DB]

Our business has been eating the cost of tariffs on components to build our products.

Parts come from all over the world for electronics manufacturing.

We even have to pay tariffs on some parts from "US" companies because those companies get materials from other countries.