As trade continues to be a focus in the current policy debate, 37 percent of small business owners are reporting negative impacts of recent trade policy changes with Mexico, Canada, or China. The newly released data comes from the NFIB Research Center, which asks member firms questions about business operations on a monthly basis, to gauge the sentiments of small business owners.

While five percent reported they had been favorably impacted, most likely due to subsidies or targeted relief payments to offset higher costs, 28 percent reported a “somewhat negative impact,” and nine percent reported a “significant negative impact” on their firm in January.

“Although the issue of trade has long spurred a heated debate, its effects on the small business economy often go overlooked. However, small businesses span the spectrum, giving them unique exposures to the impact of tariffs and trade agreements,” said NFIB Chief Economist Bill Dunkelberg. “It is clear that the small business sector, which represents half the economy, is being affected by changes in trade policy.”

From an industry perspective, the most impacted were firms in agriculture, where 64 percent reported a negative impact, half of those “significantly negative.” Fifty-seven percent in the wholesale trades reported a negative impact, followed by 41 percent in manufacturing and in construction. The least impacted are firms in the various service sectors including finance, insurance, real estate, non-professional services, and professional services where 10 to 20 percent reported a negative impact.

NFIB’s Small Business Economic Trends survey asks a random sample of its hundreds of thousands of member firms every month questions related to business operations. The trade policy question asking if their operations had been impacted by trade policy related changes with Mexico, Canada, or China was included in the November and December 2018 and January 2019 questionnaire. The full report can be found here.