Introduction: Policy Ripples Across Industries

Trade policy effects seldom remain confined to a single sector. When the Trump regime enacted its “Liberation Day” tariff policies last April, the predictable outcome was cost escalation for goods tied to global supply chains. For firms that purchase finished goods internationally and sell them domestically, tariffs operate as immediate overhead. This dynamic is most visible in sectors where imported inventory accounts for the majority of revenue. Lighting and decorative goods imported for seasonal retail provide a clear case in point. The experience of Jared Hendricks, the chief executive of Village Lighting, underscores how rapid tariff escalation can restructure business economics in ways that small enterprises cannot absorb without material risk to survival.

Who Is Jared Hendricks?

Jared Hendricks is the chief executive of Village Lighting, a company that imports holiday lighting and decorative products for sale through major national retailers. Over two decades, he has built the business into a multi-brand supplier, with products appearing in large retail chains and specialty shops alike. Village Lighting’s business model depends on predictable costs and sales calendars that pivot around the holiday season. Inventory is typically sourced overseas, imported under long-term relationships with Chinese and other Asian manufacturers, and then sold in the U.S. during peak seasonal demand. Small retailers and importers like Hendricks occupy a space with little margin for cost shocks, making them an effective lens into how tariff policy operates outside agriculture and heavy industry.

Hendricks got caught in a classic retail trade-war scenario.

Import Costs as Immediate Overhead

Tariffs imposed in 2025 under the second Trump administration significantly raised duty costs on a wide range of imported goods. A study by S&P Global projected that, overall, tariff measures would increase business expenses by roughly $1.2 trillion in 2025, with a substantial share borne by U.S. companies that rely on imports. Small businesses, which comprise most U.S. importers, reported average tariff costs in the tens of thousands of dollars over short periods in 2025. These costs are not latent risks; they are immediate cash requirements at the point of entry. (turn1search10)

For Village Lighting, this meant that the seasonal cycle of borrowing and inventory purchasing was disrupted. Traditionally, Hendricks would use a line of credit secured against his home to finance inventory acquisition before the peak holiday selling period. This credit was calibrated against expected seasonal revenue. In 2025, tariff bills on products already ordered absorbed that credit before the goods even reached store floors. Funds earmarked for acquiring new inventory were instead paid as duties to clear customs. This shift converted a planned business cycle into a cycle of debt management.

Stark Terms: The Cost of Policy Shock

The language Hendricks used to describe his situation is worth quoting directly because it captures a visceral break between normal commercial risk and what he perceives as policy-induced risk: “It’s to the point now where it could kill us, it could take us down, and I could lose everything.” and “Being a small business owner isn’t worth it when your country turns on you.” These words frame an operational reality in stark terms that go beyond rhetoric. They describe a business facing insolvency risk not because of lower consumer demand, competitive failure, or operational mismanagement, but because an external cost was layered onto already-committed inventory capital.

When input costs rise temporarily due to supply constraints or a competitor interrupts output, businesses can adjust pricing or sourcing over time. When tariffs escalate suddenly and broadly, adjusting is far more costly. For products tied to a tight seasonal window, such as holiday decor, there is minimal time to absorb costs before revenue must be generated. Small importers often lack the balance sheet flexibility that larger firms enjoy; they cannot spread cost increases across diversified product lines or absorb short-term losses while waiting for market adjustments. The result for firms like Village Lighting is near-term debt that eclipses planned operating margins.

From Operating Profit to Debt Servicing

Small importers report average tariff impacts of tens of thousands of dollars over just a few months in 2025, and 62 percent of small businesses say tariffs have affected their sourcing and operations. In aggregate, these costs force firms into borrowing arrangements they would not otherwise consider. In Hendricks’s case, the line of credit he took out against his home serves as both operating capital and, after tariff escalation, a debt obligation that must be paid irrespective of seasonal sales performance. turn1search6

This pattern is not idiosyncratic. National trade data suggests that tariff costs have pushed some importers to raise prices by double-digit percentages. Holiday lighting, artificial trees, and other seasonal goods saw cost increases that translated into higher consumer prices. Some analysts estimated price increases of 10 to 20 percent in 2025 to cover tariff overhead. These price adjustments, in turn, can depress demand, creating a feedback loop in which higher costs reduce sales volume while debt service obligations remain fixed. turn1search11

Comparative Advantage and Structural Fragility

Large importers navigate tariff shocks differently, thanks to supply chain diversity. They have broader supplier networks, larger warehouses and inventories, and greater negotiating power to shift sourcing or absorb cost shifts. They use hedging strategies, long-term contracts, and integrated logistics to spread duty costs over a wide base of goods and fiscal periods. Small firms typically lack these tools. They import discrete shipments with limited warehousing capacity and rely on stable policies to match cash flow cycles with revenue calendars.

This structural asymmetry highlights why some small businesses find themselves in a qualitatively different position from corporate competitors when trade policy shifts abruptly. A firm selling niche seasonal products has thin operational slack; its revenue must be realized in a condensed period. When cost shocks arrive outside anticipated planning windows, there is effectively no cushion.

The Policy Disconnect

Trump’s tariff policies have been defended by some policymakers as a mechanism to create leverage in trade negotiations and to stimulate domestic production. However, the effects on small import-dependent businesses raise a distinct issue: trade policy externalities are not evenly distributed. Firms that operate entirely within the domestic economy and source inputs domestically are insulated from immediate duty costs. Firms engaged in global sourcing bear them upfront.

In a sector where seasonal timing and consumer price sensitivity are critical, the policy outcome has been a transfer of risk from international exchange to domestic balance sheets. This is not a long-term structural shift; it is an unplanned cost shock embedded in a six- to eight-week revenue cycle. For small business owners whose credit is tied to personal and business assets alike, the consequences are existential.

What This Case Demonstrates

The experience of Village Lighting underlines a broader insight into Trump’s governance and economic policy: when externalities from broad policy instruments such as tariffs are not matched with phased implementation, clear transition mechanisms, or compensatory frameworks, the risk falls disproportionately on actors with limited capacity to absorb volatility. The mechanics that might work for large multinationals, diversified manufacturers, or agricultural exporters with risk-management tools do not scale downward to small importers. Yet those small firms constitute a significant share of retail activity and employment.

Another aspect of Hendrick’s case has repeated itself across businesses nationwide.  The tariff solution, which Trump touts as “saving America,” has disastrous consequences when companies don’t act as their own cash banks.  When scaled by a factor of ten or one hundred thousand, as in the case of global, larger companies, cash flows can be maintained by creative accounting and movement of revenue from one account type to another.  That’s the story of big business, and even large organizations start to unwind after months of net profits evaporating.  It just takes longer to unwind.  In this case, it’s nearly immediate.

Jared Hendricks’s assessment encapsulates this structural tension: when the overhead of doing business includes unpredictable and unavoidable duties on inventory already committed, profitability becomes secondary to survival. For observers of governance, this case emphasises the importance of anticipating distributional effects of trade policy across different scales of enterprise and planning accordingly. Where the timing and incidence of costs diverge sharply from the decision cycles of economic actors, policy outcomes can undermine economic stability in ways that are both measurable and immediate.