Small-business owners were excited for Trump 2.0. Now, tariffs and inflation are causing headaches and eroding optimism.
Why it matters: Main Street's pain is a negative for the entire economy.
- The waning confidence of small-business owners, typically a conservative group, is also another political headwind for the president, who has been getting low marks on the economy.
The latest: Small-business owners' confidence fell this fourth quarter from an all-time high in the third quarter, according to an index from MetLife and the Chamber of Commerce out Wednesday morning and shared exclusively with Axios.
- It's one of several measures showing weaknesses for small business.
By the numbers: 45% of small-business owners said inflation is their biggest challenge in the Chamber's survey, conducted in October during the government shutdown.
- They're raising prices just to keep up: 58% said they expect to raise prices this holiday season, but 52% also expect lower revenue.
- Still, that's lower than in 2022, when inflation peaked: 69% expected to raise prices, and 61% expected less revenue.
Zoom out: Confidence is roughly in line with where it was last year, and that's troubling, says Tom Sullivan, senior vice president of small-business policy at the Chamber.
- Expectations were sky-high after the One Big Beautiful Bill Act passed this summer.
- "The small-business economy should be taking off, so being OK, is not OK," he says. "It should be doing a lot better."
Zoom in: In a separate survey from NFIB on Tuesday, a net 34% of small-business owners said they are raising their average selling prices — a 13-point jump from the previous month, and the largest monthly jump in the survey's 29-year history.
- Small firms accounted for all the net job losses in the private sector in November, as Axios reported last week.
Yes, but: Not all sectors are struggling — hiring in health care has been robust. In the small biz world, that's dentist shops and local clinics. Construction firms are also hiring.
- Data out Tuesday from Gusto, which tracks small companies' payrolls, found that hiring was roughly flat in November, down 5% from the same time last year.
- "We're not out of the woods yet on small-business hiring, but it looks like there's stabilization," Gusto's principal economist, Andrew Chamberlain, tells Axios.
The other side: "President Trump's America First agenda ushered in historic job, wage, investment and economic growth in his first term, and Main Street businesses can have the confidence that this same agenda will pay off again," White House spokesman Kush Desai tells Axios.
What to watch: Tariffs hit a lot of small businesses hard this year — particularly in retail and manufacturing. And these firms are less able than their larger peers to adjust.
- A Supreme Court decision on President Trump's signature policy is expected soon.
- Trump is also threatening to walk away from the USMCA, the North American trade agreement formerly known as NAFTA.
What they're saying: "One of the things we haven't done this year is post a profit," says Carolynne Hunter, CEO of St. Clair Technologies, a manufacturer of electrical systems for vehicles with roughly 1,250 employees across the U.S., Canada and Mexico. The company has been hit hard by tariffs — and relies on USMCA.
- "Most of our vendors have simply passed tariffs through to us and we don't have the ability to recover those costs," she tells Axios, noting that the company has contracts guaranteeing certain prices, and can't simply change them.
- Tariffs, AI, the cost of health care and even supply-chain uncertainty all came up in conversations at a conference this week organized by the Small Business Roundtable, says John Stanford, cofounder of the group.
The bottom line: "It's hard for anyone to have a concrete vision for 2026 and beyond," Stanford notes.
