Whether importing or exporting, any company that does business internationally will, at some point, negotiate tariffs. These taxes or duties imposed on specific classes of imports and exports can be used as a protective measure for Made in America goods but also add a level of complexity for small businesses to navigate. Many imported goods may become more expensive, while export focused businesses may find that counter-tariffs will impact their orders from abroad.
What all importers and exporters should know right now
Every business is unique and will be impacted by tariffs differently. However, there are a few fundamental concepts that most businesses will want to familiarize themselves with.
HS Codes are more critical than ever
Harmonized System (HS) codes are the standardized international system of codes used to classify goods for customs and are used to calculate tariffs. The Universally recognized HS codes are six digits, but many countries add up to 8 or 10 digits or even more to provide country-specific classification for factors like trade policies, national tariff schedules, import/export rules, and statistical purposes. The United States, for example, uses a 10-digit code for imports and a 10-digit Schedule B number for exports. Using the right HS codes has always been an integral part of importing and exporting goods, ensuring you avoid delays, penalties, or additional costs. Now, it’s more critical than ever to ensure you choose the correct codes to minimize tariffs while avoiding compliance issues. If you have questions about HS codes, reach out to your CTSBDC advisor for more detailed advice.
Understanding customs bond saturation
Anything can happen during transport, which means importers must insure their goods through bonding. Typically, a bond must cover 10% of an importer’s duty, taxes, and fees over any rolling 12-month period of entry activity. When your duty, taxes, and fees become less predictable, it’s harder to know just how much coverage your company will need. It’s imperative that you stay in close contact with your insurance company to understand how changing tariffs could affect your bond saturation (the percentage of your bond in usage).
The removal of de minimus
The United States ended the $800 “de minimis” exemption effective August 29, 2025, which previously allowed most low-value packages to enter duty-free. This change requires all imported goods to be subject to duties and taxes, regardless of their value. The decision was made to combat the flow of illicit drugs, address unfair competition from foreign e-commerce retailers, and protect American businesses.
The impact of this change will mean higher prices for many imported consumer goods, particularly those from e-commerce sites that previously relied on the de minimis exemption of keeping costs low. Businesses that import and export small packages will also face increased costs and administrative burdens, which will eventually lead to less competition in the U.S. market.
Furthermore, small businesses and consumers alike will see tighter customs checks and increased paperwork for all incoming shipments. This has already meant the suspension of some small package deliveries since every shipment will now be assessed for import duties, taxes, and fees, ultimately raising the price of all imported goods. That said, it also opens opportunities for domestic companies to step in to fill gaps when importing no longer makes financial sense. Businesses that continue to import goods will need to familiarize themselves with new customs requirements and regulations.
This will have a significant impact in the U.S. and around the world, especially given America’s status as a primary market for global imports. Business owners at nearly every level will need to consider finding domestic suppliers for many goods. For help navigating these changes, reach out to your CTSBDC Advisor, or consider registering for advising services.
Strategies to mitigate the impact of tariffs on small businesses
With careful planning and strategic action, companies can minimize risks and protect profitability. The following tips offer practical ways to build a more resilient supply chain, while staying agile and competitive no matter how trade conditions evolve.
- Diversify suppliers—Sourcing products from a variety of different countries can reduce exposure to increased tariffs on products coming from a given country. Companies may also wany to consider shifting production closer to home through onshoring/reshoring/nearshoring strategies. (The next section may be helpful in developing such a strategy.)
- Take advantage of Foreign Trade Zones (FTZs)—An FTZ allows exporters, importers, manufacturers, and third-party logistics firms to manage the duties owed on imported goods or components. In an FTZ, companies can store and distribute goods, repackage and relabel them, mix, test, sample, process, grade, sort, or salvage—all without having to pay duties. Goods can be kept in an FTZ indefinitely, and with permission from the FTZ Board, you can manufacture, exhibit, assemble and manipulate merchandise inside the zone. In Connecticut, Bradley Airport, New London, New Haven, and Bridgeport are home to FTZs. Reach out to your advisor to learn whether or not an FTZ is an option for your business.
- Leverage technology—Tracking tariffs, shipments, and costs in real time can be time-consuming. Using ERPs and AI to help automate these tasks can save you time and money.
- Leverage Free Trade Agreements (FTAs)—Despite what can seem like doom and gloom coverage about tariffs there are still advantageous agreements in place such as USMCA (U.S., Mexico, Canada), U.S.–Australia, U.S.–Chile, and U.S.–Korea.
- Conduct market research—Identifying stable or low-tariff regions can help build predictability into your supply chain.
- Strengthen financial resilience— Cash flow is important to any business, but especially when unexpected costs arise. That’s why it is integral for companies to work with their banks now to develop an export working-capital line of credit. The Small Business Association (SBA) offers export working capital loans that can help owners weather unexpected costs.
Help for small businesses navigating tariffs
While we hope this overview is helpful, the intricacies of importing and exporting may be more than the average small business can manage on their own. The good news is that you do not have to master these challenges alone. The Connecticut Small Business Development Center is an excellent, free resource for small businesses, offering free advising on trade-related topics.
CTSBDC can help clients who export and import to:
- Identify affected products: CTSBDC advisors can help determine which of your products or raw materials are imported and research the HS Codes for these products to identify applicable tariffs.
- Assess the impact: Calculate the potential increase in your costs due to tariffs, evaluate how these increased costs will affect your pricing strategy and profit margins. Additionally, we will guide you to consider the impact on your supply chain and potential delays in receiving goods.
- Explore alternative sourcing: Investigate domestic suppliers or suppliers in countries with favorable trade agreements, allowing you to diversify your supply chain to reduce reliance on a single source.
- Negotiate with suppliers: Discuss potential cost-sharing or alternative pricing arrangements with your existing suppliers, while exploring long-term contracts to lock in prices and reduce uncertainty.
- Connect with consultants: CTSBDC can introduce you to a customs broker or trade attorney to ensure compliance with tariff regulations.
Learn more about our services and connect with an advisor.
Explore CTSBDC’s online training resources:
- Optimizing Operations and Supply Chain: Strategies to Boost Efficiency
- Roadmap to Success: Resources for CT Manufacturers
- Roadmap to Success: SBA Financing for Manufacturers