A new study from the JPMorgan Chase Institute has quantified what small and midsize business owners have been saying for months: the tariffs imposed since April 2025 have fundamentally altered the cost structure of American commerce. Analyzing transaction data from companies with 50 to 499 employees or $10 million to $1 billion in revenue, the research found that monthly tariff payments by these firms have tripled compared with early 2025 levels. The finding, published in the final week of February, lands at a particularly sensitive moment, with 25% duties on Canadian and Mexican imports set to take effect on March 4 and no clear resolution in sight.
The Scale of the Burden
The JPMorgan data reveals that the tariff surge has not spread evenly across the business landscape. The vast majority of the increase in government tariff revenue came from firms that were already paying import duties, meaning the policy has intensified financial pressure on existing importers rather than distributing the cost broadly across new market participants. Companies that had built their supply chains around international sourcing, often over decades, found themselves absorbing cost increases that arrived faster than they could renegotiate contracts, find alternative suppliers, or pass prices through to customers.
The businesses affected collectively employ approximately 48 million American workers, a figure that underscores the breadth of the downstream impact. When a midsize manufacturer sees its tariff bill triple, the consequences ripple through hiring plans, wage decisions, capital investment budgets, and ultimately the prices consumers pay. The JPMorgan research confirms that these firms are responding through a combination of all three available mechanisms: raising prices, reducing headcount, and accepting thinner margins.
The De Minimis Factor
One underappreciated contributor to the surge in tariff payments is the elimination of the de minimis exemption, which previously allowed shipments valued under $800 to enter the United States duty-free. The provision had been used extensively by smaller importers, e-commerce businesses, and companies that sourced components or materials in small batches from overseas suppliers. Its removal closed a loophole that many smaller firms relied upon and immediately subjected a new category of transactions to customs duties.
For businesses operating on thin margins, the change was particularly painful. A small retailer importing specialty goods from Asia, a manufacturer sourcing niche components, or a restaurant chain purchasing specific ingredients all faced new costs on transactions that had previously been exempt. The cumulative effect across thousands of such transactions added meaningful expense to operations that had no room to absorb it.
What the Supreme Court Ruling Changed, and What It Did Not
The Supreme Court's February 20 decision to strike down tariffs imposed under the International Emergency Economic Powers Act brought a measure of relief to businesses that had been paying duties under that specific legal authority. The 6-3 ruling declared that IEEPA does not authorize the president to impose tariffs, invalidating a significant portion of the trade barriers erected since early 2025.
But the practical impact of the ruling has been more limited than the headlines suggested. The administration has signaled its intention to reimpose duties under alternative legal authorities, including Section 122 of the Trade Act, and the tariffs scheduled for March 4 on Canadian and Mexican imports operate under a different statutory framework entirely. Businesses that celebrated the Supreme Court decision have quickly discovered that the legal landscape has shifted without the economic burden meaningfully decreasing.
The question of refunds for tariffs already paid under IEEPA authority remains unresolved. Companies that remitted duties to U.S. Customs over the past year are uncertain whether they will recover those payments, creating a cash flow overhang that complicates financial planning. As one business owner told NBC News, "The damage cannot be refunded," referring not just to the direct tariff payments but to the pricing decisions, lost contracts, and strategic pivots that were made in response to costs that may now be deemed legally invalid.
How Businesses Are Adapting
The JPMorgan data shows that midsize firms have responded to the tariff environment in ways that are reshaping the structure of American supply chains. Import volumes from China have declined as companies accelerate the "friendshoring" trend that began during the pandemic, redirecting sourcing toward Vietnam, India, Mexico, and domestic suppliers. But this transition carries its own costs. New supplier relationships require qualification processes, quality assurance investments, and often higher unit prices that offset some or all of the tariff savings.
Some companies have absorbed the increased costs entirely, choosing to protect market share at the expense of profitability. Others have implemented price increases that are now flowing through to consumer prices across a range of categories. The intersection of tariff-driven cost increases with existing inflationary pressures has created an environment where businesses feel squeezed from both directions: input costs rising due to trade policy while consumer willingness to absorb further price increases diminishes.
The March 4 Deadline
With 25% tariffs on Canadian and Mexican imports scheduled to take effect in four days, the pressure on American businesses is about to intensify. Canada and Mexico are the top two trading partners of the United States, and the duties will affect everything from automobiles and auto parts to agricultural products, energy, and building materials. Industries that depend on cross-border supply chains, particularly the automotive sector, face the prospect of immediate and substantial cost increases that will be extraordinarily difficult to mitigate in the near term.
The JPMorgan study serves as a baseline measurement of what happens when tariff policy accelerates beyond the capacity of businesses to adapt. Tripling tariff payments in under a year is a pace of change that few companies, regardless of size or sophistication, can manage without consequences for their employees, their customers, or their long-term viability. The data makes clear that the costs of trade policy are not abstract. They are real, they are measurable, and they are being borne by the businesses and workers at the center of the American economy.
