As the man who was once an endless source of amusement, controversy and sometimes fear prepares for his official inauguration as the President of the United States in 2025, small businesses are prepared to face his economic policies or continue to have them imposed on them. As seen during Trump’s first term in office, his second term is likely to focus on tax cuts, deregulation, and boosting Domestic Industries, which is of great concern to small businesses across the country.

Tax Reforms: Building on the Tax Cuts and Jobs Act

One signature reform in Trump’s earlier presidency was the Tax Cuts and Jobs Act (TCJA), which has been highly beneficial for small business people. This act also created a section of QBI or Qualified Business Income whereby business entities passing through tax must reduce their taxable income by up to 20% of QBI. Since this provision is up for renewal in 2025, Trump has committed to renewing it to continue to enable small businesses to reduce their taxes. Further, what Trump has in store is a cut in the corporate tax rate from the current 21% to 20% and a deeper rate of reduction to as low as 15% for local manufacturers. Other important recommendations include the repeal of taxes on tips and overtime that may increase workers’ pay and enterprise and consumer expenditure.

The National Federation of Independent Business, which is a non-partisan organization said that the TCJA was well received among small business entity owners. Thus, prolonging these tax measures within the new Trump term may create a stable base for entrepreneurship development and innovations.

Tariffs: Strengthening Domestic Manufacturing

Trump’s economic policies remains heavy on tariffs with further tariffs of 10% to 20% on all imports and a 60% tariff on Chinese imports. These are meant to increase the domestic capacity by protecting local industry and increasing the buying power of Americans.

Benefits for Domestic Producers

Small businesses that engage in the manufacturing of goods within the United States could benefit from the rise in the costs of imported goods. The Tax Foundation, an independent research institution, considers that the policies under consideration might give a stimulus to domestic manufacturers.

Challenges for Import-Dependent Businesses

However, companies that rely on imports of parts raw materials, or finished products have experienced increasing costs. These companies should then factor in whether they are going to incur more costs or transfer the burden of these extra costs to consumers in consideration of a company’s sales and profitability.

Risk of Retaliatory Tariffs

If America puts tariffs on imported goods, other countries can also put tariffs on the exported products from America. To a small business planning to venture into the international market, it presents a significant risk.

Deregulation: Removing Barriers for Small Businesses

Trump has been pretty consistent in reducing federal regulations during his first term and is all set to continue the practice even in the second tenure. Securities, tech, energy, financing, and insurance businesses, in particular, are poised to turn a profit as Trump’s government works to eliminate Biden’s new rules.

There could be improved compliance costs for small businesses in these sectors and improved efficiencies that will positively impact growth and investment.

Expanding Small Business Financing

Under Trump’s leadership, lending through the Small Business Administration (SBA) grew significantly, thanks to streamlined processes and improvements to programs like the 7(a) Loan Program. Since most of the focus of Trump’s administration leans towards supporting businesses, these programs will most likely be extended and streamlined to make sure small companies have the required resources for growth.

Opportunities and Challenges

With President Trump’s hypothetical return in 2025 to the White House, his economic policies continues, and its impact on small businesses is both exciting and concerning. New taxes could stimulate expansion, deregulation, and increasing sales to domestic markets may also boost the economy however more uncertainty arises from tariffs and international relations of trade. To smaller businesses, such changes and the ways of coping with them will become an obvious necessity if they want to succeed in the new economic policies foreseen under Trump’s renewed presidency.