President Donald Trump’s administration has introduced a series of policy changes in 2025 that are significantly impacting small businesses across the United States. These measures encompass tax reforms, deregulation efforts, trade policies, and modifications to federal support programs, eliciting a spectrum of responses from entrepreneurs and economic analysts.
Tax Reforms: Reliefs and Controversies
A central element of the administration’s agenda is the «One Big Beautiful Bill Act,» recently passed by the House of Representatives. This comprehensive legislation aims to make permanent the 20% qualified business income deduction for pass-through entities, a provision initially introduced in the 2017 Tax Cuts and Jobs Act. Proponents argue that this move will stimulate job creation and economic growth, with estimates suggesting the creation of at least 1 million new jobs annually if the tax cuts are made permanent.
Additionally, the «No Tax on Tips Act,» which has passed the Senate, proposes exempting up to $25,000 in tip income from federal income taxes for eligible workers. Supporters claim this will provide financial relief to service industry employees, while critics warn it may encourage employers to reduce base wages and alter tipping norms .
Conversely, the proposed retroactive elimination of the Employee Retention Tax Credit (ERTC) has sparked concern among small business owners. The rollback could jeopardize up to $50 million in refunds and affect around 1 million pending claims at the IRS, potentially impacting businesses that relied on the credit during the COVID-19 pandemic .
Deregulation and Federal Support Adjustments
The administration has reinstated the «two-for-one» rule, mandating the removal of two existing regulations for every new one implemented. This initiative aims to reduce compliance costs and streamline operations for businesses .
However, structural changes within the Small Business Administration (SBA) have raised concerns. While SBA lending surged by 80% in the first 100 days of the administration, the agency announced plans to reduce its workforce by 43% and terminate over 120 contracts, potentially affecting the availability of support services for small businesses .
Furthermore, the administration has proposed eliminating the Minority Business Development Agency, which supports minority-owned businesses, as part of broader efforts to reduce federal spending .
Trade Policies and Economic Implications
On April 2, President Trump announced the «Liberation Day» tariffs, implementing sweeping tariffs on all imports as part of a strategy to correct trade imbalances. While intended to bolster domestic manufacturing, the tariffs have disproportionately impacted small businesses, leading to increased costs, layoffs, and, in some cases, bankruptcy .
Looking Ahead
As these policies continue to unfold, small business owners are navigating a complex landscape of opportunities and challenges. While tax cuts and deregulation may offer financial relief and growth potential, concerns about reduced federal support and the ramifications of new trade policies persist. Stakeholders are closely monitoring legislative developments to adapt their strategies accordingly.
