00:00 Speaker A
A wide range of tariffs are expected to go into effect next week including tariffs on foreign-made cars, reciprocal tariffs, a resumption of the Canada and Mexico tariffs, as well as tariffs on countries importing Venezuelan oil. These policies have sparked fears about rising costs and potential economic slowdown. Only 29% of small business owners believe that the economy is in good health according to the US Chamber of Commerce. For more on this, we’ve got Tom Sullivan, US Chamber of Commerce vice president of small business policy. Tom, good to have you here with us. So, how are tariffs impacting small business sentiment from what we can see right now in the data?
01:11 Tom Sullivan
Brad, in answer to your question, we we ask our our business members and with three million businesses uh and a partnership with 1600 state and local chambers of commerce, it’s a little hard to call them up and ask. So we partner with MetLife and we survey small businesses every quarter. Our most recent small business index just released shows that confidence is way down and part of that is because of the fear that tariffs will raise prices. I mean, Brad, keep in mind that for 13 consecutive quarters, our MetLife and US Chamber of Commerce index has said that inflation is the top concern for small business. So we saw optimism spike immediately after the election because small businesses believed that the new administration would bring costs down. Now with tariff uncertainty, unfortunately, the reverse is true and they are really scared that prices are going to go back up.
03:07 Speaker A
What are the actions that small businesses can take to to best insulate themselves?
03:27 Tom Sullivan
Well, right now, small businesses tell us at the chamber that the best way to kick start the economy is to open up new markets around the world for the best American-made products in in services. And not many people know this, but you know, Brad, there wasn’t another free trade agreement partner that came on board in the last 5 years. There are 20 free trade agreements around the world and the small business owners tell us that the way to boost the economy is open up new markets. So as much as small business owners take pride in their products, take pride in their services, we need a president that will open up new markets for them to sell.
05:24 Speaker A
And so it it seems like at least as of now, that the president is moving more on an agenda of less less globalization, deglobalization, in fact. How are small businesses trying to figure out, okay, where are their best global opportunities knowing that that’s what the president now has campaigned on, that’s what he’s kicked off his term with. And now that’s created more uncertainties and challenges for those small businesses to enter into new markets.
06:32 Tom Sullivan
Well, small businesses tell me that they’re very excited to elect a pro-business candidate to occupy the White House. And so right now, you’re right, there’s uncertainty that is causing price pressures on small businesses. And it’s not just the sectors that are targeted through new tariffs, it’s the fact that small business owners know their employees have to spend more at the grocery store, so they have to pay them more in salary. And so that type of squeeze that small business owners feel ends up tamping down their plans for growth. And at the US Chamber of Commerce, we are all about growth. So anytime we see a small business index like we did recently that says plans for growth are stalled, we get concerned. Now you asked, where is there the opportunity, where’s the opportunity for the president to really kind of turn things around? We believe that that opportunity is making permanent the pro-growth provisions in the tax code. We have leaders in the House, the Senate, and President Trump, all agreeing that these pro-growth provisions that help small business should be made permanent. That permanence is the antidote to uncertainty.
08:56 Speaker A
Tom, while we have you here, you you mentioned a core part of this in that, that optimism also impacts some of their hiring plans too. What are you hearing from small businesses on that front and where it could flow into the data prints on things such as the employment situation every month?
09:29 Tom Sullivan
Well, Brad, I’m glad that you asked because actually employment plans is is one bright spot in our small business index. For the past three years, small business owners have been desperate to hire up to meet consumer demand. And so even though all of the index indicators declined, which is certainly caused for concern, their plans to add employees hasn’t declined too much. And so we see about 20% of small business owners wanting to hire new employees uh this coming year. And in fact, our friends at at Vistage who do a similar survey with the Wall Street Journal, they’re estimating that 48% of small businesses want to add employees this year. So that is the one bright spot within a series of declining survey answers.
10:55 Speaker A
Tom, some really key insights there. Thanks so much for taking the time with us.
11:02 Tom Sullivan
Thank you for having me, Brad.