Trump’s tariffs are already impacting Australian retailers selling into the US market. The proposed removal of the $800 ‘de minimis’ threshold on May 2, which until now has allowed duty-free shipments up to $800 in value, will increase costs and compliance burdens, for smaller these shipments.

Foreign companies, now less competitive in the US, will likely divert their goods to markets like Australia, intensifying competition for local businesses.

The supply chain is also experiencing significant disruption. Manufacturers and shipping companies are adjusting their operations to absorb the tariff’s economic impact. This is leading to price increases in markets without tariffs, effectively subsidising prices in those newly affected. This price shift is a concern.

There is one other possible impact I want to raise – that of suppliers increasing prices under the cover of tariff noise. I have suspicions about a couple of suppliers in the Australian marketplace doing this.

Beyond direct impacts, the flip flop approach from the US over the last three months and fed uncertainty. This makes planning difficult for small businesses. We’re already seeing this uncertainty reflected in supplier decisions, leading to less predictable product availability.

It’s crucial that businesses assess the potential impacts of these fluctuating US policies on their supply chains and revenue. We must consider the risk of a US, Australian, or global recession and engage proactive mitigation strategies. Acting now is essential; waiting until the impact is fully realised may be too late.

Historically, businesses that thrive during recessions and economic instability are those that planned and acted before the crisis hit.

While many small business retailers will dismiss these concerns, I don’t think it is smart to do so. I know of three suppliers who have increased prices in Australia citing the US disruption as the cause. Given Trump’s initial actions, it’s reasonable to expect bigger negative economic consequences for many, driven by decisions that primarily benefit a select few.

In this moment it’s vital we build resilience and adaptability into our local small retail business models. This means diversifying supply chains, exploring new markets and new products, and strengthening financial reserves. Those who prioritise proactive planning and strategic flexibility will be best positioned to navigate the inevitable economic shifts ahead.

If you are in local small business retail, now might be a good time to step outside what has been traditional for your business, to find new customers through new products and services. Broadening your base will make your business stronger.