The introduction of a 10% baseline tariff on all imports and steep reciprocal tariffs on countries with trade barriers has dramatically shifted U.S. trade policy. Developing regions are particularly vulnerable to these changes, exacerbated by rising interest rates and inflation that hinder investment. SMEs, operating on tight margins, struggle to absorb increased costs from tariffs. They must seek alternative financing and grapple with decisions on cost management. Retaliatory tariffs from major partners further challenge SMEs, necessitating a survival mindset in an unstable global trade environment.
While large corporations have the resources to survive any large-scale trade market changes, SMEs operate on tighter margins and have less capacity to absorb sudden cost increases.
As tariffs continue to drive up the price of imported goods and raw materials, SMEs are forced to make difficult choices: pass these costs onto consumers, accept squeezed margins at their loss, or even risk losing competitiveness altogether.
We've already seen many escalations for retaliatory tariffs due to the actions of the US, from their major trading partners, including China, the EU and Mexico.
With a lack of a stable future in sight, smaller businesses need a mindset of survival.
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