President Donald Trump made many promises to voters on the campaign trail, but it’s unclear how many will cross the bureaucratic finish line. With the Republican party securing a majority stake in both chambers of Congress for the first time since 2019, Trump’s agenda may stand a better shot of becoming reality.
Here are some proposals that may impact small-business owners across the United States the biggest.
1. Raising tariffs on imported goods
Trump wooed economy-anxious voters by promising to bolster the economy and put more dollars in Americans’ pockets.
He says he plans to do this by imposing a 10% to 20% tariff on all imported goods coming into the U.S., a 60% tariff on goods coming from China, and 25% or higher tariffs on Mexican imports.
What experts say this might mean for small businesses
“Made in America” companies could come out ahead. Small businesses that produce and sell goods wholly made in the U.S. stand to benefit from this proposal, according to the Tax Foundation, a nonpartisan nonprofit.
Other businesses may have to pass the buck. Businesses that rely on imported products, parts or materials will have to choose between absorbing the tax themselves or passing it on to consumers. Many studies found that tariffs levied during Trump’s first term drove up costs for both American businesses and individuals.
Counter tariffs pose a potential threat. When one country imposes tariffs on another, they’re often met with retaliatory tariffs. If the U.S. imposes blanket tariffs on all imports and other countries respond in kind, businesses may have a harder time exporting goods.
2. Expanding tax cuts for small businesses
During his first term in office, Trump passed the Tax Cuts and Jobs Act, which reduced the tax burden on businesses.
Trump has promised to extend provisions in the original bill that are set to expire in 2025, such as the qualified business income deduction, which allows business owners of pass-through entities to deduct up to 20% of qualified business income from their taxes.
He’s also pledged to lower the corporate income tax rate from 21% to 20% (15% for corporations that make their products in the U.S.), and has proposed eliminating taxes on tips and overtime pay.
What experts say this might mean for small businesses
Small-business owners will feel some relief. The 2017 Tax Cuts and Jobs Act was well-received by small-business owners, with overwhelming support for the qualified business income deduction, according to the National Federation of Independent Business. Extending these tax breaks would keep the door open for growth and innovation for many small businesses in the U.S.
Service businesses might retain more workers. Service-based industries where workers rely heavily on tips, such as restaurants and hotels, often struggle to keep employees. By not having to pay taxes on tips received or overtime wages, workers may be more inclined to stay in these jobs. Wage-based service businesses might also be prompted to adopt a tip-based compensation system of their own, according to the Tax Foundation.
3. Undocumented immigration overhaul and mass deportation
Trump says he’s promised to “carry out the largest deportation operation in American history” by tightening the border, increasing penalties for illegal entry into the U.S., and repatriating millions of people residing in America unauthorized.
According to a Pew Research Center analysis of U.S. Census Bureau data, more than 15.9 million people lived in the U.S. without legal authorization in 2022, the most recent year available.
Many experts believe Trump might focus on repatriating as many people as possible, though others feel that history will repeat itself — he made a similar promise when first running for office in 2016, when estimates suggest he deported fewer people annually than Presidents Biden and Obama.
However, Trump has already appointed Tom Homan as his new “border czar” and he may attempt to resume immigration crackdowns in workplaces, a practice that was phased out before Biden took office.
What experts say this might mean for small businesses
America’s labor market could take a hit. Pew Research Center estimates the number of workers without legal authorization to be 5 million, while organizations like New America Institute estimates it’s higher than 6.5 million.
With these workers often filling jobs in construction, manufacturing, and agriculture, business owners in these industries may face a vacuum of workers, according to the Brookings Institution. This is especially true for small-business owners in states such as California, Texas, Nevada, and Florida, where the share of these workers is the highest.
Some employers could be in hot water. Businesses that are caught knowingly employing unauthorized immigrants may face legal consequences, such as fines, imprisonment, or losing their business licenses.
4. Cutting through red tape
Trump has called for slashing government regulations on businesses and reversing certain guardrails set by the Biden administration.
However, regulations are hard to dismantle. During his first term in office, while Trump added far fewer new regulations than previous presidents, many of his deregulatory orders were struck down in court.
But the president-elect has made it clear that deregulation will be a central theme throughout his second term in office. In fact, he’s already tapped fellow entrepreneurs Elon Musk and Vivek Ramaswamy to lead a newly proposed Department of Government Efficiency.
What experts say this might mean for small businesses
Small businesses in highly regulated industries, such as energy, technology, and finance may experience fewer administrative costs and restrictions, according to Morgan Stanley.
5. Relaxing overtime pay rules
Project 2025, the Heritage Foundation blueprint for a second Trump presidency, suggested changing federal overtime rules to offer more flexibility to employers.
Trump has tried to distance himself from Project 2025. But at campaign events, he’s also said how much he hated paying overtime to his workers.
“I’d say, ‘No, get me 10 other guys. I don’t want to have time and a half,'” Trump said in Saginaw, Mich., on October 3.
What experts say this might mean for small businesses
Relaxing rules on overtime would mean lower costs for business owners, although it could also make it harder to hire employees who expect to be paid more for overtime.
Will all these things happen?
President-elect Trump has yet to assume office, so there’s no way to know which of these changes, if any, will eventually occur. But if you own a small business, now’s the time to stay on top of pending legislation that could affect you and your livelihood.
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