Eight out of ten small businesses that pay tariffs are passing at least some of that cost straight through to you. That's not a guess or an advocacy talking point — it's the headline finding from the Federal Reserve's own 2025 Small Business Credit Survey, published by the New York Fed's Liberty Street Economics team in July 2026. And the more unsettling part isn't the 80% who've already raised prices. It's that nearly half of them say they're not done yet.
If you run a business that touches imported goods in any way — you sell physical products, you buy materials from overseas, or you're a service business whose vendors do — this survey is effectively a roadmap of what's coming to your own cost structure over the next six to twelve months. Here's what the data actually says, and what to do with it.
The Survey Behind the Headlines
The Federal Reserve System runs the Small Business Credit Survey (SBCS) every year, polling employer firms across the goods, retail, and services sectors about credit conditions, operating challenges, and cost pressures. The 2025 edition collected responses from roughly 6,500 firms nationally (976 in the New York Fed's own "Second District," covering New York, New Jersey, and Connecticut) between September and November 2025.
Unlike a one-off news survey, the SBCS is longitudinal and methodologically consistent year over year, which is why economists trust it as a read on how tariff costs are actually moving through the small-business economy rather than how they're being discussed in the press.
The Core Numbers
Three data points from the Liberty Street Economics analysis matter most if you're trying to gauge your own exposure:
Import dependency is broader than you'd think. Across the firms surveyed, 70% of goods-producing businesses, 80% of retailers, and even 40% of services firms reported using imported inputs. Eighty percent of all firms said the price of those imported inputs rose in 2025 compared with 2024. If your business touches physical inventory in any way, the odds are good that some part of your cost base is exposed to tariffs even if you never import anything directly — your supplier or your supplier's supplier likely does.
Tariff pain isn't evenly distributed. Nationally, 67% of retail firms and 55% of goods firms reported tariff-related challenges in 2025, versus 34% of services firms. In the New York Fed's own district, those numbers were higher across the board — 72% for retail, 62% for goods, 44% for services — suggesting regional supply-chain concentration makes some local economies more exposed than the national average implies.
Most firms are doing both at once. Of the firms affected, 80% passed on at least some cost to customers through higher prices, while 60% absorbed at least some of the cost internally (via thinner margins). Critically, these aren't mutually exclusive: 36% of goods firms and 43% of retail firms reported doing both — raising prices while still eating part of the increase — which tells you that even the businesses passing costs through aren't fully covering their tariff exposure with price hikes alone.
The Part That Should Worry You More: It's Not Over
A second Liberty Street Economics analysis, "More Tariff Pass-Through Is in the Pipeline," is the more important read for planning purposes. It found that 47% of service firms and 44% of manufacturers that have already paid tariffs still plan additional price increases — not because costs are rising further, but because the price increases already needed haven't fully landed yet.
The timing breakdown is telling:
- Roughly 40% of manufacturers and 30% of service firms that plan more increases expect to do so within the next six months.
- Another 7% of manufacturers and 16% of service firms are planning increases beyond six months out.
- Meanwhile, only about 20% of manufacturers and 30% of service firms who paid tariffs consider their pass-through complete.
Fed researchers describe this as a "trickle up" pricing pattern: firms are deliberately spreading price increases across an extended period rather than making one large, visible jump. The two reasons cited are practical rather than strategic in the customer-relations sense — many firms are locked into fixed-price contracts that haven't come up for renewal yet, and others are pacing increases to avoid shocking customers even while preserving the option to raise prices further if costs keep climbing.
The upshot: if you've been watching your suppliers' invoices creep up gradually rather than jump all at once, that's not you imagining things. It's the documented industry-wide strategy right now, and the Fed's own analysis says it has further to run.
Why This Hits Small Businesses Harder Than Big Ones
The Fed's researchers make an important structural point: large firms can often absorb tariff costs — at least temporarily — because they have pricing power, diversified supply chains, and enough margin cushion to eat a cost increase while they renegotiate with suppliers or shift sourcing. Smaller, less profitable firms with fewer resources generally can't do that. They either pass the cost through quickly (risking customer pushback) or absorb it (risking their own margins), and the SBCS data shows most small businesses are doing an uncomfortable mix of both.
That's also reflected in outlook data: firms that reported greater tariff challenges in 2025 were measurably more pessimistic about their own employment and revenue prospects for 2026 than firms that weren't as exposed. Tariff cost pressure isn't just a pricing problem — for a meaningful share of small businesses, it's translating directly into hiring caution.
What to Actually Do With This Data
If you're running a business with any import exposure, the survey suggests three concrete moves:
1. Separate tariff-driven cost increases from your regular COGS in your books. If a supplier's per-unit cost has already risen because of tariffs, don't let that increase blend invisibly into a generic "cost of goods sold" line. Tag it — even informally — so that six months from now, when you're deciding whether your own prices need another adjustment, you can see exactly how much of your cost base is tariff-driven versus normal inflation or supplier-specific changes. This is exactly the kind of thing that's painless if you're already tracking transactions in a structured, queryable ledger and genuinely hard if your bookkeeping is a shoebox of receipts and a spreadsheet built in April.
2. Model the "trickle up" pattern into your own pricing calendar. If nearly half of tariff-paying firms are planning further increases over the next six-plus months, and your own suppliers are behaving the same way, you should assume your input costs haven't finished rising. Rather than reacting to each supplier price increase individually, consider building a quarterly pricing review into your calendar now, so your own price adjustments are planned and communicated rather than reactive.
3. Communicate price changes the way the data suggests works. Businesses that successfully raised prices without losing customers tended to do it gradually and transparently — explaining the "why" rather than quietly changing the number on an invoice. One wholesale business owner who phased in an 18% increase with clear communication about the cause reportedly retained over 90% of her accounts. A sudden, unexplained price jump reads as opportunism; a gradual, explained one reads as a business absorbing real cost pressure alongside its customers.
Keep Your Cost Data Clean While the Ground Keeps Shifting
When your supplier costs are moving every quarter instead of once a year, the businesses that adapt fastest are the ones whose books already separate tariff-driven cost changes from everything else — instead of discovering the damage at tax time. Beancount.io gives you plain-text accounting with a full, versioned history of every transaction, so you can see exactly when and how much your costs shifted and make pricing decisions on real data instead of a gut feeling. Get started for free and keep your numbers as current as the tariffs are.