How Main Street Businesses In MI Could Recoup Tariff Costs

It’s unclear when — or if — Michigan’s 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.

In Michigan, 983,079 or 99.6 percent of businesses are classified as small businesses. Nearly half (47.7 percent) of Michigan employees or 1.9 million people, are employed by small businesses.

Looking at the demographics in Michigan, women made up 47.1 percent of workers and owned 44.6 percent of businesses. Veterans made up 3.6 percent of workers and owned 4.5 percent of businesses. And Hispanics made up 5.3 percent of workers and owned 3.8 percent of businesses.

As far as the types of business industries, 21,008 or 97.9 percent of employers and 189,852 or 41 percent of employees worked in retail.

In manufacturing, there were 10,282 or 94.2 percent of employers and 256,182 employees or 43 percent.

A total of 637 or 99.5 percent of employers or 4,196 or 97.6 percent of employees work in the agriculture, forestry, fishing and hunting industry.

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.

"Trump’s tariffs were sold as a lifeline for manufacturing. Instead, they were a hidden tax on working families, squeezing small businesses and creating uncertainty, which only hurt our communities," Michigan Congresswoman Debbie Dingell said.

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.”