Last year, small US firms faced notable tariff price pressures, Fed report finds

A Federal Reserve report highlights that small U.S. firms faced significant tariff-related cost pressures in 2025, primarily affecting retail and manufacturing sectors. Over 40% of surveyed firms reported increased costs due to tariffs, with many passing on expenses to consumers. The report also noted a rise in AI adoption among small businesses, enhancing productivity without job losses. Despite the challenges posed by tariffs, firms did not significantly alter their supply chains. The Fed anticipates the impact of tariffs to diminish in the coming year.