March 3, 2025
OPINION: Tariffs Are Squeezing Black-Owned Businesses—Here’s How We Fix It
For Black-owned businesses, these effects are even more pronounced.
By Quinting Lacewell
I’ve spent years working at the intersection of government and business, helping cities and companies navigate economic policies that shape our communities. From major corporations to small businesses on Main Street, I’ve seen firsthand how trade policies—especially tariffs—can ripple through industries, affecting everything from supply chains to hiring decisions.
For Black-owned businesses, these effects are even more pronounced. Many already face systemic barriers to accessing capital, securing government contracts, and building the supplier relationships that fuel growth. When tariffs disrupt the market, the playing field tilts even further against them.
Higher Costs, Tougher Decisions
Tariffs drive up the cost of imported goods, and those increases don’t just disappear—they get passed down. For Black-owned businesses that rely on imported materials, this means higher prices, shrinking profit margins, and difficult decisions about whether to absorb costs or pass them on to customers.
Take a Black-owned construction firm bidding on a local development project. If tariffs increase the price of imported steel and lumber, their costs go up—while larger competitors with deeper pockets can buy in bulk or shift to alternative suppliers. In an industry where profit margins are already thin, these added expenses make it harder to compete, win contracts, and expand.
To combat these challenges, cities should adopt best practices like those outlined in workforce development initiatives, including supplier diversity programs that help small businesses access more competitive pricing by connecting them with local manufacturers and alternative suppliers.
Supply Chain Disruptions Hit Small Businesses Harder
Supply chains are built on consistency and predictability. When tariffs suddenly increase the cost of raw materials or cause delays in shipments, small businesses suffer the most.
Imagine a Black-owned apparel brand that sources fabrics from abroad. A sudden tariff hike means higher prices, delays at ports, and the possibility of losing seasonal inventory before it even arrives. Large retailers can adjust by negotiating supplier discounts or shifting production, but smaller businesses often don’t have that flexibility.
One solution is municipal small business advisory councils, like those in Birmingham and Kansas City, which create a direct line of communication between policymakers and small business owners. These councils can help cities design trade-related policies that mitigate supply chain disruptions for small businesses.
Global Markets Close Their Doors
Many Black-owned businesses are looking to expand beyond U.S. borders, tapping into international markets to scale up. But when tariffs trigger retaliatory measures from other countries, these opportunities shrink.
Consider a Black-owned food and beverage company trying to break into European markets. If European countries impose tariffs in response to U.S. policies, American products become more expensive overseas. A multinational corporation can weather this by diversifying sales, but for a small business counting on international growth, the impact can be crippling.
Cities should prioritize export assistance programs that help small businesses navigate international trade barriers. The City of Phoenix’s PHXbizConnect platform, for example, provides on-demand business resources, expert insights, and networking opportunities that could be adapted to help Black-owned businesses access global markets.
The Capital Crunch
Economic uncertainty caused by tariffs also tightens access to capital. When market instability increases, banks and investors become more risk-averse. Black entrepreneurs, who already face higher rejection rates for business loans, find it even harder to secure funding when financial institutions hesitate to lend.
Think about a Black-owned tech startup seeking investment to scale production. If tariffs cause fluctuations in component prices, investors may see the business as a riskier bet, delaying funding or offering unfavorable terms. Without capital, that company struggles to expand, innovate, or hire.
A proven best practice is small business connector programs, like those in North Las Vegas and Fort Worth, which provide direct access to capital, business counseling, and workforce development support. Expanding these programs would help Black-owned businesses secure funding despite economic uncertainty.
Policy Solutions That Work
Tariffs alone won’t make or break the economy, but when their impact disproportionately harms small and Black-owned businesses, it’s a problem that requires solutions. Here’s what policymakers should do:
1. Expand access to capital—Strengthen loan programs, grants, and public-private partnerships to ensure Black entrepreneurs can weather economic fluctuations. Cities like Fort Worth have created one-stop business hubs to help connect entrepreneurs with funding and resources.
2. Support supply chain resilience—Invest in local manufacturing and supplier diversity initiatives to reduce reliance on unstable international markets. Economic Pulse Surveys, like those in El Paso, provide real-time data on workforce trends, helping cities tailor business support programs.
3. Provide targeted relief—Tax incentives or tariff exemptions should be explored for small businesses hit hardest by supply chain disruptions. Strategic small business task forces, like those in Kansas City, can advocate for these policies and help implement relief measures.
4. Improve workforce development—Upskilling programs, such as Albuquerque’s Job Training Initiative, can help small businesses hire and retain workers despite economic downturns. Investing in similar programs will strengthen Black-owned businesses facing rising costs.
5. Enhance business navigation support—Programs like Tampa’s Small Business Navigator ensure that entrepreneurs have the tools and guidance they need to adapt to shifting economic conditions, including tariff-related disruptions.
A Smarter Approach to Trade Policy
Tariffs aren’t inherently bad, but their unintended consequences can be devastating for small and Black-owned businesses. If we want to build a more inclusive economy, policymakers must go beyond trade wars and focus on strengthening local business ecosystems.
By investing in capital access, supply chain resilience, and workforce development, we can ensure that Black entrepreneurs not only survive—but thrive.
About the author
Quinting Lacewell, co-chair of the Business Council for the U.S. Mayor Conference, is a policy strategist and economic development advocate with extensive experience at the intersection of government and business. He has worked with cities, small businesses, and major corporations to navigate complex economic policies, strengthen local economies, and promote equitable growth. Passionate about expanding opportunities for Black entrepreneurs, Lacewell focuses on policy solutions that drive capital access, workforce development, and sustainable business ecosystems.