The shifts in trade policies in 2025 raise questions about how businesses will be affected by potential increases in costs of imported goods. This post provides a portrait of US importers' vulnerability to increases in tariffs, with a focus on small firms. We start by reviewing lessons from the 2018–19 tariff hikes, centering the discussion on US firms' experience rerouting global supply chains and the role of credit access in helping firms manage higher trade costs. We then assess the vulnerability of US importers to recent changes in tariff policy and emphasize the constraints small firms face as they navigate higher import tariffs.
What did we learn from the 2018–19 tariffs?
Trade-oriented firms respond to tariffs in different ways, a primary strategy being the geographical diversification of supply chains, which shields firms from the risk of trade barriers with particular countries. The lengthy process of diversifying supply chains with new suppliers requires significant financial resources and might therefore be out of reach for smaller firms.
A recent study that tracks the foreign suppliers of medium-sized US manufacturing firms after the 2018–19 tariffs (Alfaro et al. 2025 
) offers three main insights. First, US importers tend to rely on a single source country for their products, which exposes them to significant country risk. Second, finding alternative suppliers is costly and time-consuming: establishing a new supplier relationship typically takes nearly three years. Third, access to bank credit is critical in smoothing this process. Those importers who work with banks that specialize in trade finance are more likely to find new foreign suppliers. Banks thus help mitigate the financial constraints of firms affected by higher trade barriers by supplying them with credit. Recent developments in US tariff policy raise the question—how are US importers going to adapt to the shifting tariff landscape? Which are the most vulnerable firms in terms of size? Which firms will be able to readily adapt to higher tariffs, and which firms will find it much more difficult to do so? In what follows, we leverage rich microdata to gain insight into US importers' exposure and vulnerability to recent changes in trade policy.
Which importers are most vulnerable to tariffs?
Our analysis leverages two newly linked datasets: S&P Global's Panjiva Supply Chain Intelligence, which provides information on individual maritime shipments from foreign suppliers to US importers, and Dun & Bradstreet's National Establishment Time Series (NETS), a private sector source of US business microdata. The shipment data capture a significant share of US trade as maritime shipments account for about 80 percent of total international trade value (UNCTAD, 2021 ). By pairing these datasets, we can shed light on the size, industry, location, credit access, and tariff vulnerability of US importers.
Most importers are small and account for a small share of aggregate employment. Small firms—those with fewer than 50 employees—represent 86 percent of all US firms engaged in maritime trade. Most small importers operate in wholesale and retail trade or service sectors, whereas larger importers are concentrated in manufacturing. Small importers account for 41 percent of all maritime trade in terms of total shipments and 44 percent in terms of shipment value. Though small importers contribute significantly to total trade flows, they only account for 11 percent of employment across importing firms.
Across the firm-size distribution, US importers are undiversified, usually importing products from one supplier and one country (table 1). At the same time, small firms tend to import fewer products, and the products that they import are on average less complex, more easily substitutable, and associated with shorter-lived supplier relationships.
Note: The table reports medians. To obtain the median number of suppliers and source countries, for firms with multiple products, we first compute the median number of suppliers and source countries across products (at the HS6 product level). Then, we compute the median number of suppliers and source countries across firms in each size group. Small firms are defined as those with fewer than 50 employees, medium as those with from 50 to 499 employees, and large as those with 500 or more employees.
Source: Authors' calculations based on data from Dun & Bradstreet NETS and S&P Global's Panjiva Supply Chain Intelligence
These characteristics have important implications for small importers' ability to switch suppliers and diversify their supply chains. On one hand, reliance on suppliers from a single country means that searching for alternative suppliers—domestic or foreign—becomes imperative when goods from that country are subject to tariffs. Moreover, reliance on a single supplier means that small importers might have limited bargaining power to negotiate prices. On the other hand, because small importers source less-complex products, they may be better able to find substitute products elsewhere. Therefore, the ease with which small firms will be able to adapt to higher import tariffs and reroute supply chains depends on a combination of factors, including the extent to which they are affected by higher tariffs, the mix of products they import, and the countries from which they source their goods.
Small importers are facing steeper tariff increases. To understand differences in exposure to tariff changes across US importers, we calculate the percentage point (ppt) change between 2024 and 2025 in the effective tariff rate (ETR) that each importer faces. To make this calculation, we combine data on (a) the share of firms' imports accounted for by each product and origin country with (b) the change in the import tariffs imposed on each of these products and origin countries between 2024 and 2025, using tariff rates as of August 7, 2025, from the Trade War Tracker .
The left panel of figure 1 depicts the distribution of ETR changes between 2024 and 2025 for all firms. Whereas the average importer in our sample faces a 25 ppt increase in ETR, this average masks substantial variation across firms. Firms fall into one of two groups—those facing an increase in import tariffs between 10 and 20 ppts and those facing an increase between 25 and 35 ppts. As seen in the right panel of figure 1, small firms are more likely to fall into this second group facing import tariff increases exceeding 25 ppts.
Note: For each firm, we calculate the ppt change in ETR as the weighted average ppt change in import tariffs between 2024 and 2025. The weights are calculated as the share of each firm's total imputed import value accounted for by each product they import from each country of origin between 2022 and 2024. We impute the value of shipments at the product level by multiplying shipment-level import volumes from Panjiva by unit values for specific products (at the HS2 product level) from the BLS. Small firms are defined as those with between 1 and 49 employees.
Source: Authors' calculations based on data from the Bureau of Labor Statistics (BLS), Dun & Bradstreet NETS, S&P Global's Panjiva Supply Chain Intelligence, and Trade War Tracker
What is behind the especially high increase in import tariffs faced by small firms? The answer hinges on whether small importers with high increases in ETR rely more on certain tariffed products or source countries than other importers. The left panel of Figure 2 shows that small firms with an above-average increase in ETR (25 ppts) have a similar industry distribution compared to other importers, suggesting a similar product mix. In contrast, the right panel of figure 2 shows that these highly exposed small firms differ significantly from other importers in terms of source countries. Most strikingly, small firms with an above-average increase in ETR are much more reliant on China, with 71 percent of them sourcing their goods from China, compared to only 7 percent of all other importers.
Notes: High ETR small is defined as firms with from 1 to 49 employees facing a greater than 25 ppt increase in ETR between 2024 and 2025. Importers are categorized as reliant on China, Asia, or Europe, if 67 percent or more of their import value originates from these markets.
Sources: Authors' calculations based on data from the BLS, Dun & Bradstreet NETS, S&P Global's Panjiva Supply Chain Intelligence, and Trade War Tracker
Highly exposed small importers face challenges in diversifying their supply chain. When importers face rising tariffs, they need resources to operate at a higher cost and to diversify supply chains away from tariffed markets. Finding new suppliers requires significant financial resources. Therefore, credit access is a salient indicator for firms' ability to weather higher tariffs. Small importers in general, and those facing an above-average increase in ETR in particular, have less access to traditional credit than other firms. Only 27 percent of small firms, and 24 percent of small importers with an above-average increase in ETR, have a business credit score (D&B paydex) that reflects payment history and can be used by lenders before extending new credit. In contrast, 70 percent of medium and large firms have such a score. Without credit access, highly exposed small importers will likely struggle to meet higher trade costs and establish new supplier relationships.
Where are the tariff-vulnerable importers across the United States?
The analysis shows that many small importers are affected by rising tariffs because they are undiversified, rely on China for their imports, and lack access to credit that would help them absorb shocks and diversify their supply chains. Where are these "tariff-vulnerable importers" located? Figure 3 shows that tariff-vulnerable importers—small firms lacking a D&B paydex score and facing an above-average increase in ETR—are predominantly located on the West Coast, thanks to the proximity of shipping routes from China and Asia. Even though other states have fewer vulnerable importers, in the average state around 31 percent of importers are vulnerable, representing a meaningful share of US importers overall.
Note: The map depicts the share of tariff-vulnerable importers by state. Vulnerable importers are defined as firms with from 1 to 49 employees that face a greater than 25 ppt increase in ETR between 2024 and 2025 and lack a Duns & Bradstreet paydex score.
Source: Authors' calculations based on data from the BLS, Dun & Bradstreet NETS, S&P Global's Panjiva Supply Chain Intelligence, and Trade War Tracker
What do key insights reveal?
Our main insight is that recent shifts in trade policies are likely to affect US businesses differently depending on their size. The vast majority of US importers are small and contribute a small share of aggregate employment, which suggests that short-run employment effects of recent tariffs (ceteris paribus) could be limited. That said, small importers may be relatively more constrained in their ability to weather higher trade costs or switch suppliers, and, as a result, might experience defaults and bankruptcies. Given the significant role small firms play in generating new jobs (BLS, 2024 ), stress experienced by these firms could have long-lasting repercussions for overall business dynamism. Our analysis also has potential pricing implications, suggesting that tariff increases might be stronger for small importers with less negotiating power toward their suppliers or less able to find suppliers in lower-cost markets.
By Veronika Penciakova, research economist and assistant adviser,
Valerie Nguyen, economic research analyst,
Camelia Minoiu, research economist and adviser, and
Lauren Taylor, economic research analyst, all of the Atlanta Fed's Research Department