While tariffs are often framed as tools of international leverage, their domestic fallout reveals a hidden cost: they disproportionately harm small businesses, especially those led by Asian American women. These businesses are growing revenue, creating jobs, and are deeply embedded in global supply chains. Yet trade policy often neglects them in its considerations. Flomo, one such business, is being squeezed by tariffs, and policymakers must do something to fix this.
Tariffs Push Resilient Importer To The Breaking Point
Wendy Shen, an immigrant from Taiwan, has navigated 9/11, the 2001 recession, the financial crisis, a pandemic, inflation, and interest rate hikes. The latest blow to her business has come from a political decision: tariffs. As the CEO and president of Flomo—a New Jersey-based importer of seasonal products, party goods, journals, and stationery—Shen built her business over three decades into a nimble, customer-focused operation. Her firm’s team of 45 serves major national retailers that depend on efficient sourcing and cost control.
Initially, Shen sourced products from Taiwan, but later shifted manufacturing to China to reduce costs. In 2018, a 25% tariff was imposed on certain goods imported from China, prompting Shen to diversify Flomo’s manufacturing base by moving some production to Vietnam and Indonesia. However, she retained a portion of manufacturing in China, where suppliers, despite higher costs, offered more advanced capabilities and greater efficiency for certain products.
Aggressive tariffs recently levied on goods imported from China have climbed as high as 145%. This has brought Flomo’s business model to a standstill. Shen paused shipments. Orders sit in limbo. Retailers refuse to absorb price hikes, leaving small importers to shoulder costs. “We’ve already paid for freight and duties,” Shen explains. “We can’t recoup that. And we can’t sell at a loss.”
To safeguard her business amid skyrocketing tariffs, Wendy Shen is taking a multifaceted approach rooted in resilience and strategic planning. She’s working to diversify both her sourcing and customer base, reducing dependence on any single country or buyer. That includes exploring suppliers in lower-tariff countries and building infrastructure to support exports beyond the U.S.—a long-term shift that won’t happen overnight. She’s also digging into tariff codes, where even minor classification changes can cut costs, and leveraging tools like free trade zones to mitigate duty impact.
Shen is focused on value creation, enhancing product offerings to justify prices, and maintaining open communication with both factories and retailers to share the burden wherever possible. “You have to plan for multiple outcomes,” she says. “We always need a Plan A and Plan B.” That agility—built over decades of experience—is now her greatest asset, but it still may not be enough for her business to survive in the long-run.
What’s happening to Flomo is a warning signal for policymakers: When applied without nuance, tariffs don’t just punish foreign governments. They can gut resilient U.S. businesses—especially those owned by women, minorities, and immigrants—because they are small and have less access to resources.
In 2024, Asian American women-owned businesses numbered 1.4 million, according to The 2025 Wells Fargo Impact of Women-Owned Businesses. They employed 1.6 million people. Whether leading micro-businesses or scaling companies beyond $10 million, Asian American women make an outsized contribution compared to their population share on the GDP and job creation.
Trade policy rarely accounts for small businesses’ structural vulnerabilities. In the rush to penalize China, Washington has overlooked that American small businesses, like Shen’s, may become collateral damage. Tariffs won’t just harm importers—they’ll ripple across adjacent industries like transportation, warehousing, and shipping, threatening the broader ecosystem that supports small businesses.
Why Trade Policy Leaves Small Businesses Exposed
The truth is low-end manufacturing is unlikely to return to the U.S. because the jobs typically offer low wages that fail to attract American workers, especially when safer, higher-paying alternatives are available in other sectors.
When policymakers debate tariffs, they tend to picture corporate giants—tech companies, auto manufacturers, or big-box retailers. But they rarely consider firms like Flomo: high-volume, low-margin importers serving mainstream consumers and anchoring supply chains for everyday goods. These companies lack the lobbying muscle of multinationals and are invisible in trade hearings, yet they feel the consequences first and most acutely.
Shen has long worked to diversify her supply chain. After the first wave of Trump-era tariffs in 2018, she moved some production to Vietnam and Indonesia. Still, about half of her product line—particularly gift bags, art kits, and journals—must be sourced from China. “Other countries don’t have the same capacity, especially for goods that combine design elements, speed, and cost,” Shen says.
Because her customers are large national retailers, Shen can’t simply raise prices to cover the cost of duties. “We’ve already signed contracts. If we don’t deliver, we lose the account. If we deliver at a loss, we bleed cash.” New tariffs now apply retroactively, compounding the damage: Flomo is being charged on goods it has already paid for and shipped.
Unlike larger competitors, small importers cannot hedge or finance sudden increases in costs. Even federal relief programs often exclude them. The 20% pass-through tax deduction for business owners wasn’t intended to compensate small businesses impacted by tariffs. It doesn’t touch the up-front cash strain that tariffs create.
This disconnect underscores a broader truth: trade policy isn’t just foreign policy—it impacts small businesses domestically. And in its current form, it reinforces old hierarchies, favoring capital-heavy firms while sidelining growing, women- minority- and immigrant-owned businesses that depend on imports for survival.
Rewriting Tariffs To Reflect Needs Of Small Business Owners
Flomo is not an outlier. It’s emblematic of an entire category of women- minority- and immigrant-owned businesses that today’s trade policies neither reflect nor support. These firms are fast-growing, deeply integrated into consumer supply chains, and disproportionately led by entrepreneurs who rely on global sourcing to remain competitive. When tariffs are imposed, they have no off-ramp—no exemption, no voice in the room, and no tools to adapt.
Organizations like Main Street Alliance and Women Impacting Public Policy (WIPP) call for a structural fix: a small business exemption from tariffs. Even the conservative U.S. Chamber of Commerce is calling to exempt small businesses from tariffs.
“Stephen Miller claimed extending the Tax Cuts and Jobs Act would ease the impact of Trump’s tariffs on small businesses,” says Richard Trent, executive director of Main Street Alliance. “But the 20% pass-through deduction is already law and most of its benefits go to firms making over $1 million a year. Even with reform, it won’t offset the damage of doubling small businesses’ costs.”
Angela Dingle, president and CEO of WIPP, adds “This is especially urgent for women entrepreneurs, who are less likely to have access to affordable capital or supply chain flexibility. Without an exemption, these businesses are caught between contractual obligations and cash flow constraints—pushed toward failure through no fault of their own.”
The numbers back this up. From 2023 to 2024, Asian American women-owned employer firms, like Flomo, grew employment by 5.9%. However, growth means exposure when policy shifts are made without input from these entrepreneurs. These companies and their employees are at risk.
The U.S. must ensure that trade policy works both as international leverage and for small businesses that drive job creation and keep shelves stocked across the country.
Tariffs may be designed to protect American industry, but when applied indiscriminately, they punish the entrepreneurs driving inclusive economic growth. Businesses like Flomo are vital yet vulnerable. If policymakers want to safeguard U.S. competitiveness, they must design trade policies that recognize the complexity of today’s small business landscape—and ensure that resilience, not size or influence, determines who thrives.
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