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Small Businesses Stall Innovation Under Trump’s Shifting Tariffs

Uncertainty about evolving U.S.-China tariffs has driven firms to redirect resources from product development to regulatory compliance.

A collection of Made Plus sneakers is on display at the company's manufacturing facility in Annapolis, Md., Tuesday, June 10, 2025. (AP Photo/Stephanie Scarbrough)
Alan Guyan, founder and CEO of Made Plus, holds a new colorway of the company's "bangr," a pickleball sneaker, at the company's manufacturing facility in Annapolis, Md., Tuesday, June 10, 2025. (AP Photo/Stephanie Scarbrough)
Andrew McLean, assembly technician at Made Plus, performs visual checks on a shoe before bonding the outsole to the upper at the company's manufacturing facility in Annapolis, Md., Tuesday, June 10, 2025. (AP Photo/Stephanie Scarbrough)
The tread intended for a golf sneaker is displayed at the Made Plus manufacturing facility in Annapolis, Md., Tuesday, June 10, 2025. (AP Photo/Stephanie Scarbrough)

Overview

  • Startups like Dorai Home have delayed product launches and cut key development roles after tariffs spiked to 145% before a temporary reduction to 30%.
  • Learning Resources reports that roughly 25%–30% of its 350 employees, including product developers, are now focused part time on managing tariff impacts.
  • Companies such as Made Plus are exploring alternative suppliers in Vietnam and beyond to reduce reliance on Chinese components.
  • Economists J. Bradford Jensen and Scott J. Wallsten warn that shifting executive attention from innovation to compliance could harm the long-term competitiveness of U.S. industries.
  • Learning Resources and hand2Mind won a district court ruling against presidential tariff authority and are preparing for an administration appeal.