How Main Street Businesses In IL Could Recoup Tariff Costs

It’s unclear when — or if — Illinois' small businesses will get a refund on President Donald Trump’s import tariffs struck down Friday by the U.S. Supreme Court.

In the 6-3 opinion stating Trump’s use of the Economic Emergency Power Act to impose the tariffs was unconstitutional, the court didn’t offer any clear next steps on refunds of the roughly $175 billion collected so far.

Congressional Democrats and small business advocates say Main Street businesses should be first in line for refunds. An analysis last week from the Federal Reserve Bank of New York found that almost 90 percent of the “economic burden” of tariffs fell on consumers and businesses.

Nationally, 36.2 million, or 99.9 percent of all businesses, are classified as small businesses. Nearly half (45.9 percent) of the U.S. population, or 62.3 million people, are employed by small businesses, according to the U.S. Small Business Administration.

Small businesses in Illinois are a significant component of the state's economy, according to the the administration's small business profile of the state. The report indicates that Illinois is home to 1.4 million small businesses, representing 99.6 percent of all businesses in the state.

These small businesses collectively employ 2.4 million people, accounting for 43.7 percent of Illinois' total workforce. Between March 2023 and March 2024, small businesses contributed to a net increase of 14,131 jobs in Illinois.

U.S. Small Business Association reports that during this same period, 33,940 small business establishments opened, while 33,376 closed. Overall, 70,006 establishments expanded employment and 67,289 contracted, leading to a net increase of 229 establishments across all business sizes.

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Lending to small businesses also saw substantial activity. In 2023, large banks reported issuing $3.3 billion in loans to Illinois businesses with revenues of $1 million or less. This figure is part of a total of $10.1 billion in new lending reported to businesses through loans of $1 million or less, as mandated by the Community Reinvestment Act.

Small businesses were also key players in the export market. In 2023, out of 21,929 identified firms exporting goods worth $73.4 billion from Illinois, 19,462 were small businesses. These small firms contributed $17.6 billion to the state's exports, making up 24.0 percent of the total exports by identified firms.

The report also detailed business ownership demographics. Women owned 43.3 percent of businesses, while veterans owned 3.7 percent. Hispanics owned 12.0 percent of businesses in Illinois. These ownership shares include businesses that are equally or majority-owned by the respective demographic groups.

Democratic Sens. Ron Wyden, of Oregon, Ed Markey, of Massachusetts, and Jeanne Shaheen, of New Hampshire unveiled a bill Monday requiring the CBP to issue refunds over the course of 180 days and pay interest on the refunded amount.

“Trump’s illegal tax scheme has already done lasting damage to American families, small businesses and manufacturers who have been hammered by wave after wave of new Trump tariffs,” said Wyden, stressing that the “crucial first step” to fixing the problem begins with “putting money back in the pockets of small businesses and manufacturers as soon as possible.”

The measure prioritizes tariff refunds for small businesses and urges larger companies to pass savings to customers. Though unlikely to become law, the bill shows how Democrats are pressuring the Trump administration, which has resisted returning tariff revenues.

In fact, Trump said Saturday, a day after the court struck down his central economic policy, that he plans to raise the global tariff rate to 15 percent. The White House has yet to formally implement these higher tariffs.

"The Trump Tariff Tax burdens families and businesses," said U.S. Senator Dick Durbin, of Illinois. "It was clear these tariffs were illegitimate after he announced a dramatic increase on Swiss tariffs—just because he didn’t like their leader. This Supreme Court ruling is a win."

Fellow Democratic U.S. Senator Tammy Duckworth, of Illinois, also described the ruling as a positive for the country.

"The Supreme Court just struck down Trump's illegal tariffs that made the cost of groceries, toys and so many everyday essentials skyrocket," Duckworth said. "This is a win for the American people. But it won't put the money they've already spent back in their pockets."

RELATED: Pritzker Lauds SCOTUS Ruling On Trump's Illegal Tariffs

Meanwhile on the Republican side, U.S. Rep. Darin LaHood (Peoria) voted earlier this month against ending the national emergency declared by Trump that allowed the administration to impose tariffs on Canada despite his reported concerns about them.

WGLT, part of the NPR Network and a public service of Illinois State University, recently interviewed the congressman, who said many of the farmers he represents are "suffering" because of the tariffs.

"I think we need to have a reduction in the tariffs, particularly in how they affect our allies. And I think its been a hindrance on the economy in many ways," LaHood said.

As reported by WGLT, prior to the resolution vote, Trump had threatened Republicans if they "bucked him" on Truth Social before a vote on the resolution.

"Any Republican, in the House or the Senate, that votes against TARIFFS will seriously suffer the consequences come Election time, and that includes Primaries!" Trump posted. “TARIFFS have given us Economic and National Security, and no Republican should be responsible for destroying this privilege."

Small businesses, whose 2025 tariff bills tripled in some cases, were handed a series of difficult choices, said Richard Trent, executive director of Main Street Alliance, a network of 30,000 small business owners.

Their message is clear, Trent said in a statement: “This was a raw deal.”

“They were forced to absorb higher costs or pass them on to customers. That is not economic strength. That is a squeeze on Main Street,” he said.

According to the group’s survey of small businesses:

• 81.5 percent raised prices to offset tariff costs;
• 31.5 percent expected to lay off personnel
• 41.7 percent delayed expansion plans
• Only 14 percent said they could realistically shift production to the United States

Main Street Alliance is working with lawmakers on reimbursement mechanisms, building on bipartisan proposals previously introduced to refund small businesses harmed by tariff overreach.

“Every penny taken from small businesses under this framework should be returned,” Trent said, adding that refunds would restore working capital, stabilize hiring and investment, and help ease the inflationary pressure tariffs helped entrench.

Many businesses faced tariff rates exceeding 100 percent, with no phase-in period and constant revisions. In some cases, rates moved from 104 percent to 125 percent to 145 percent within days, creating planning paralysis for manufacturers, retailers, restaurants, and service businesses, Trent said.

“Our members were not just facing higher costs. They were facing chaos,” Trent said. “You cannot build a factory in two weeks. You cannot grow coffee in Minnesota. And you cannot plan payroll when tariff rates change overnight.”