These Trump executive orders have the greatest impact on local small businesses. Here’s what to do.
(This column originally appeared in the Inquirer)
Since taking office in late January, President Donald Trump has issued more than 70 executive orders (EOs) But which will have the most impact on American small businesses?
Three stand out, and it’s important for business owners to understand the implications.
Federal spending and DOGE
Using an EO, Trump created the Department of Government Efficiency, or DOGE, with the stated intent of rooting out waste and fraud in federal spending. Another EO has temporarily frozen all government spending while programs are being evaluated.
These orders have created a significant amount of disruption, particularly for businesses and organizations that rely on federal funding.
Emily Dowdall, president of policy solutions at the Reinvestment Fund in Philadelphia, warns that because the federal government has long been one of Philadelphia’s largest employers, there will “absolutely be ripple effects” from job losses. Fired federal workers will have less money to spend in their communities. Philadelphia had roughly 25,000 federal workers before Trump took office.
? READ MORE: How Philadelphia’s probationary federal employees are coping with mass government layoffs
Della Clark, the president and CEO of the Enterprise Center in Philadelphia, a nonprofit organization that provides assistance to helps minority-owned businesses and communities, also said federal spending cuts could cause businesses to lose revenues, cut back employees, and raise prices in an already competitive environment. She encourages CEOs to evaluate their customer lists and do a risk analysis of how much potential revenue they could lose.
“For example, a food service vendor who contracts with university customers could be negatively impacted if their customers are no longer able to access federal funds and are forced to decrease vendor spend,” she said. “Business owners who work with large institutions should pursue contracts that are not as dependent on federal dollars.”
Clark is strongly encouraging her small business clients who are heavily reliant on federal contract dollars to diversify their revenue streams if they haven’t already.
“Even if a small business owner isn’t directly contracting with the federal government, they should be monitoring how eliminating these agencies will affect the economy in their business sector as a whole,” she said.
“There is the potential” that these cuts could result in lower taxes, Clark said, which businesses and consumers could recirculate back into the economy. But that prospect is less certain than the almost immediate local, regional, and national impacts of decreased federal funding, she said.
Immigration
The president has also issued EOs on immigration.
These have called for “advanced vetting” of applicants, an end to birthright citizenship (a federal judge quickly blocked this), the use of armed forces to keep undocumented immigrants from crossing the southern U.S. border, and authorizing state and local law enforcement officials to act as immigration officers.
The loss of these undocumented workers in an already tight labor market, could make it harder for businesses to find and retain good employees, Dowdall said. She noted that many small businesses in Philadelphia are operated by immigrants or employ immigrants.
? READ MORE: Neighbors angry as ICE arrests owners of popular Jersey Kebab restaurant in South Jersey
“Regardless of the actual immigration status of any individual business owner or employee, targeting immigrants as a group has the potential to put a real chill on economic activity,” Dowdall said. “People are understandably concerned about being caught up in broad sweeps or simply facing heightened discrimination and violent rhetoric associated with these executive orders.”
Art Gimenez, director of lending and programs at the Impact Loan Fund, which provides financing for neighborhood revitalization in Philadelphia, said many of the businesses he serves are in Kensington and are owned by immigrants.
“A lot of clients aren’t aware of the laws and their rights so they’re just flat-out hiding,” Gimenez said. “They’re very afraid.”
Tariffs
The president has issued a number of EOs proposing tariffs on Canada, Mexico, China and other countries that would impact the cost of goods from lumber to avocadoes.
Clark, of the Enterprise Center, said tariffs present both a challenge and opportunity to small businesses.
“Domestic producers who are currently not competitive on price due to cheaper imports have the potential to grow their customer bases and revenue,” she said, explaining that tariffs will change the cost-benefit equation of importing versus buying local.
“CEOs of companies that are importing directly will have to evaluate how much of that cost their customers can absorb in the form of increased prices,” she said. “They would be wise to scenario plan how tariffs might impact the costs of goods and supplies moving forward as well as potentially evaluate the feasibility of switching to domestic alternatives.”
Now is the time for business owners to examine their messaging and marketing materials, Clark added, to communicate “unique selling advantages such as offering higher quality goods, faster production times and local customer service availability,” she said.