How Tariffs Are Straining Small Businesses This Holiday Season

• Small retailers face tariffs that initially threatened to reach 180% on Chinese goods, forcing businesses like Loftie, founded by Matt Hassett, to consider shifting production to Thailand before ultimately staying in China due to even higher alternative costs.

• Loftie is entering peak season with only about 10% of the inventory it needs after tariff uncertainty delayed orders for its China-made sunrise lamps and phone-free alarm clocks.

• Operating margins for small retailers with under $50 million in assets have fallen to negative 20.7%, leaving 36% at high risk of bankruptcy, three times the rate of large retailers, according to RapidRatings.

• RapidRatings executive chairman James Gellert says average profits for small businesses have slipped into negative territory for the first time since the pandemic, driven by rising costs and limited resources to absorb tariff pressure.

• PYMNTS research shows 90% of goods firms raised prices this year, but 75% still saw margin declines as demand weakened, pushing companies to cut material costs, redesign products, or eliminate items rather than continue raising prices.

Loftie is a wellness company helping people create tech-life balance through beautifully designed, deceptively simple products for the home.

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