Trade deal handshake
getty
The newly announced trade agreement between the United States and the European Union does more than just light up diplomatic headlines—it offers a fundamental shift in how small businesses in America can approach the international market. From supply chains to financial markets, small business owners must understand how these changes affect their bottom line, regardless of how political leaders debate the broader implications.
Core Impact Tariffs Have On Small Businesses
At its core, it’s a 15% tariff rate on most EU imports that also eliminates “all EU tariffs on U.S. industrial goods exported to the EU.” For small businesses, this means new challenges that can either be viewed as limiters or opportunities for significant growth.
The first and most immediate effect will be felt by businesses importing European goods. Before 2025, the tariff rate was a mere 1.2%. That significant 13.8 percentage point increase will directly impact costs across every industry, including pharmaceuticals, auto parts and automobiles, furniture, and consumer goods.
Small business owners now face one of two realities. If your business relies on imported goods from Europe, expect to feel the squeeze. If you export products to Europe, consider it a push with no gains or losses.
American Market Opportunities
American-made, American-grown goods have never been more in focus. The EU’s commitment to eliminating tariffs on U.S. industrial goods provides many opportunities for small manufacturers and business owners who find many European markets cost-prohibitive.
Consider this an advantage for many American businesses. For example, a small furniture maker in Tennessee can potentially compete with European manufacturers in their local markets without the tariff disadvantage.
Supply chain resilience is also an area where opportunities can be found. The trade deal includes provisions to “address non-tariff barriers”, which were particularly difficult for U.S. exporters and small businesses to navigate financially. This means there are now opportunities for domestic suppliers to overtake European alternatives that have historically burdened customers with price increases—and had no direct competition.
Small business leaders should evaluate their existing supplier relationships to potentially find American alternatives that are not only more competitive but also offer increased financial growth and expansion opportunities.
Navigating Real Challenges
There are inherent risks and instability with the 15% tariff rate, particularly in short-term logistics. Small businesses importing European goods will need to act decisively to ensure financial stability.
1. Inventory And Logistics
Understand new carrying costs, storage needs, and cash flow limits associated with importing goods. Map out which product lines are the most vulnerable and then focus on forward-planning inventory cycles or supply chain diversification.
2. Proactive Contract Renegotiation
Working closely with European suppliers may allow you to negotiate splitting the overall cost of the new tariff (e.g., you absorb 8%, supplier takes 7%). Foreign exchange rate strategies, longer-term contracts or higher volumes, and value-added services such as extended warranties can help sweeten the deal.
3. Product Margin Response
Profitability is key to success. Identifying which European imports can absorb the 15% cost is essential. Positioning “high-quality European products” with proper marketing can help justify a gradual price increase to customers, or give you time to shift marketing focus to American-made products. Double down on European products with fewer substitutes, or create new exclusive products altogether.
Being Agile Is Your Competitive Advantage
Companies that move quickly almost always gain a significant competitive advantage over the competition. As an example, small and medium businesses in Spain saw sales to America jump 38% as they rushed to beat anticipated tariffs in February 2025. This rapid response and business agility allowed them to capture market share, ready their inventories, expand sales teams, and offer more flexible payment terms to American companies.
Trust Through Transparency
I’ve learned that uncertainty goes hand-in-hand with modern business ownership, but it also creates opportunities for leaders who communicate quickly and clearly with their stakeholders. Small businesses that see the trade shift as a benefit to their goals and proactively address these changes with suppliers, customers, and within their own teams will emerge stronger and more capable than before.
Transparency and honesty with how the tariffs—and subsequent logistics—will affect your day-to-day operations will create loyalty and build trust with your partners. This is a moment where you can strengthen your relationships and fortify your partnerships, as long as you’re doing more than simply increasing pricing.
Let’s Take A Look Ahead
Commitments are everything. Not just for your own business, but on a global scale. The EU has committed to investing “$600 billion in the United States” and purchasing “$750 billion of U.S. energy exports through 2028.” Seen through a lens of opportunity, this will have a positive ripple effect on the American economy and generate opportunities that go far beyond direct trade relationships.
Small businesses in sectors from advanced manufacturing to energy infrastructure to digital e-commerce should plan and prepare for increased demand. Refreshing existing relationships and building new ones can help investments materialize more readily and establish your business as a trustworthy partner on the road ahead.
Policy Doesn’t Dictate Success
Much like the NFL Draft, everyone wants to tell you the trade deal has immediate winners and losers before any player even steps on the field. And while the trade deal may create new costs that will definitely impact your decision-making, small business leaders need to see the changing environment as an opportunity to thrive.
The U.S.-EU trade deal has shifted in America’s favor. The next six months can be seen as a threat or an opportunity. How you choose to see it will shape the future of your small business and determine your success.
