Black, Latina, and Asian women already struggle with launching and funding their ventures. Trump's ever-changing tariffs threaten to put them out of business.
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Last year, Sherrill Mosee, inventor and designer of the multipurpose bag line MinkeeBlue, purchased enough inventory to last the year. She’d originally come up with the idea for the bag line in 2012 — to start her business, she bootstrapped, dipped into her savings, received an investment from friends and family, and launched a Kickstarter fundraiser. But when Mosee spoke with DAME in July, she said her inventory lasted so far, but she was no longer working with a manufacturer to make more bags. The tariffs imposed by President Trump have left her wondering whether she can sustain herself for the long term.
In light of the steep tariffs levied against Chinese manufacturers, Mosee’s Philadelphia-based bag brand made inquiries with alternative manufacturers in other countries to see if they could make samples of her bags, but even those were prohibitive. One manufacturer charged more than $2,000 for a sample.
“It’s becoming very difficult because [you’ve] got the tariffs, you have the cost of production and then all the other costs to run a business,” Mosee said.
Mosee is one of millions of small U.S. business owners trying to stay afloat amid the new tariffs. Small businesses owned by women of color are feeling the impact even more — research suggests that women and people of color might face more challenges obtaining credit to fund their businesses. And as they have shared with DAME, tariffs have strained their operations, compounding the effect of challenges like limited startup capital, the COVID-19 pandemic, and inflation have had on their businesses.
As of 2023, the U.S. had more than 33.2 million small businesses, according to the U.S. Small Business Administration (SBA). Over 1.2 million were owned by women, and more than 1 million were owned by people of color, per the SBA’s 2023 figures. And according to the 2024 Small Business Credit Survey, more than half (56%) of white business owners were approved for a loan or line of credit within a year of taking the survey, while only about a third of Asian (34%), Black (32%), and Hispanic (32%) respondents had been approved. The same survey noted that nearly a third (31%) of respondents were likely to use their own funds to support their businesses, a slightly greater proportion than men (27%).
A lack of access to credit is nothing new for Black women entrepreneurs, said Shennette Garrett-Scott, associate professor at Tulane University and author of Banking on Freedom: Black Women in U.S. Finance Before the New Deal. Historically, Black women have faced obstacles in the business world due to their race and gender. Black men and women entrepreneurs have both been discriminated against at traditional banks, leading to limited access to credit, excessive interest rates, and short repayment terms on the loans they received. Black women also were subjected to sexist lines of questioning regarding their intellect, sexuality, and overall potential, explained Garrett-Scott, who added that Black women also confronted societal expectations that they should only work in agricultural work or in domestic roles.
Despite these challenges, Black women have historically come up with solutions to circumvent them. Black women, for example, grew cotton and produced food on the side along with their work in the field so that they could sell any extra goods to provide for their families and buy or maintain their freedom. Meanwhile, affluent Black women have poured money into real estate and other investments and have also taught others how to market their businesses and price their products. “Black women have always navigated these systems that weren’t designed for them to take situations that were meant to limit their potential and found ways to maximize that,” Garrett-Scott said.
On July 31, President Trump signed an executive order delaying the deadline for new tariffs on imported goods from around the world, including upon countries with which the U.S. has negotiated trade deals. The tariffs range from 10% on the U.K. to 50% on Brazil and India, according to CNBC.
The mercurial tariff situation is “chaotic,” making it nearly impossible for small businesses to monitor, said Jonathan Gold, vice-president of supply chain and customs policy at the National Retail Federation. “The uncertainty has really been hurting companies, small businesses specifically, as they’re trying to figure out: How do they plan their business? How do they forecast what to order?” Gold said. “They should have already done their holiday ordering and had merchandise starting to arrive. But because of the uncertainty of not knowing what the tariff rate is going to be when the product arrives, many still haven’t placed orders and they’re running out of time as to when they can actually do that.”
Though the tariffs have been framed as a punishment for other countries, consumers might not understand that it’s the U.S. companies paying the tariff on imported goods, and they have to decide whether to pass the higher costs of those goods onto consumers, explained Mosee.
Like Mosee, entrepreneur Talei Hornback had to bootstrap her business in its early days, and the mercurial tariff situation has complicated her operations. After debuting the e-commerce site for her business last year, Hornback officially launched Coily Clips, a curly-hair accessory brand in May, debuting her products at a trade show. The coil clip-ins, which complement textured curls, were inspired by her daughter, now 13 years old, who was obsessed with hair clip-ins when she was in preschool, explained Hornback.
“She literally said to me one day, ‘Mom, I wish they had this for my hair.’ And I just thought, Whoa, I wish that too,” Hornback recalled.
Seeking a career change, the former marketing executive wanted to become a full-time entrepreneur, Hornback said. To start the business, she used her own savings along with additional investment from her family. “Just being a Black female founder — when you know the statistics of the percentage of women who really get funding, that can be disheartening,” Hornback said.
Hornback saw the first sign that the Trump administration’s tariffs would be a problem for her business at the trade show she attended in May. She went in hopes of connecting with retailers interested in her products. But, Hornback reported, “The traffic felt light. This [was] my first time, so I have no reference.” Yet, business owners who participated in the show a decade earlier said the event “used to be [packed] shoulder to shoulder and [they] would run out of items to pass out.”
Hornback sources her products from China, where the de minimis exemption, which excluded international shipments valued at or below $800 from tariffs, meant that she wouldn’t have to pay tariffs on her shipments. That is, until July 30, when President Trump issued an executive order suspending the duty-free de minimis exemption for low-value shipments. Now, with that exemption rollback, costs for her small business will increase, Hornback said. Following recent conversations with her Chinese suppliers, she realized the tariffs will determine the quantity and volume of what she needs to order, though her suppliers wouldn’t tell her exactly how much it would cost to order products, she said.
“I am holding off on buying any additional inventory, just because I’m still trying to push through obviously the inventory I have,” Hornback said. “The feedback I’m getting from my Chinese suppliers is almost like, ‘Stay calm. Don’t worry. We’ll help you … It’ll be pricier. But we’ll make it work for you.’”
Though President Trump professes his desire for businesses to move their production here, doing so is much more difficult in practice.
LiLi Tan founded her business in 2018 after a bad night’s sleep at a friend’s house. Without her silk duvet, she repeatedly woke up in the night, sweating under her friend’s down-alternative blanket. The experience inspired her to launch Kailu — which means “open road” in Mandarin — a bedding brand that makes silk duvets, among other things.
Today, her business relies on small mom-and-pop farmers and artisans in China — plus a pattern designer in the U.K. and some freelance writers — to create her assortment of duvets, pillowcases, throws, and other products. Until recently, she worked full-time and ran her business, she said. Balancing both required, for example, taking a day off to attend an event during the week, or participating in a pop-up shop on weekends, she said.
It’s difficult for small business owners to change their supply chains, Tan noted. The Kailu founder had reservations about sourcing her cotton from the U.S., given the history of slavery and the U.S. cotton industry, she explained.
“When people are pushing, I say exactly where it’s made and that it’s not a mega factory. I go to these small mom-and-pop farmers, and these benefit female artisans,” Tan said. “I still will get flack for not producing in America, even though it is a very local product and it cannot be produced in America.”
Besides paying for the tariffs on the goods themselves, the trade war has had other consequences for small business owners. Tan has noticed a spike in both air and freight shipping. Upon visiting her suppliers in China in April, she asked about their plans in light of the U.S. tariffs imposed on Chinese imports. For now, U.S. orders would remain on hold, they told Tan.
It would be helpful to small businesses broadly, but particularly small businesses owned by women of color, if the Trump administration revises Section 301 to implement the tariffs on a sliding scale, Mosee said. (The section of the Trade Act of 1974 allows the U.S. to impose tariffs or restrictions on imports in response to unfair foreign trade practices.)
Given that the Trump administration’s lambasting of diversity, equity and inclusion policies, it’s good to see that DEI programs haven’t completely vanished, but they can be harder to find, Hornback noted.
“Women-owned businesses, minority-owned businesses in particular, have it three, four, five times as hard. Because even at baseline, without this unpredictable environment we’re in, we already have it harder,” Hornback said. “We already have it harder, [but] now you’re throwing on all the tariffs.”