Market Update: Wisconsin small businesses struggle with effects of Trump’s tariffs – Full Analysis

In each of the last two years, Erin Klaus has seen 30% declines in gross revenue at her Eau Claire art gallery and shop, Tangled Up in Hue. Her staff has shrunk, and she said she is taking on a full-time job elsewhere. 

But the number of transactions at Tangled Up in Hue is nearly identical year over year, she said. People want to support her business; they just aren’t spending as much money. 

“That just tells a really, really important story about where people are at,” Klaus said. “Money isn’t circulating, at least in our local communities, and we’re all going to feel that pressure even more if something doesn’t change soon.” 

Klaus, who also leads the nonprofit organization Downtown Eau Claire, said the economic policies coming from President Donald Trump’s administration are unsustainable for small businesses. She said working people are losing out on the American dream as they become unable to support their families. 

“Nothing can last forever unless we take care to preserve it,” she said. “And the laws and the tariffs are not supporting our ability to protect and preserve what we’ve built in our communities.”

A recent report from the nonpartisan Tax Foundation found that Trump’s tariffs cost U.S. households an average of $1,000 in 2025 and, if left unchanged, will cost an average of $1,300 in 2026. The tariffs represent the largest U.S. tax increase as a percentage of GDP (0.54% for 2026) since 1993, according to the report. 

“Historical evidence and recent studies show that tariffs are taxes that raise prices and reduce available quantities of goods and services for US businesses and consumers, resulting in lower income, reduced employment, and lower economic output,” the report states. 

Trump’s tariffs have been a pillar of his administration, including a 10% tariff placed on goods imported from nearly every country after he declared in April 2025 that “foreign trade and economic practices have created a national emergency.” Trump has long said his tariffs are saving the American economy. 

While House Republicans have largely stood with Trump against Democrats’ efforts to overturn the tariffs, six Republicans last week joined Democrats in the House to vote to block Trump’s tariffs on Canada. 

None of the six were from Wisconsin’s GOP delegation. Rep. Derrick Van Orden, whose district includes Eau Claire, recently told NOTUS: “Our farmers understand that we have to level the playing field. And how do you do that? You do that with these tariffs.” He has also previously acknowledged that tariffs were hurting some industries, but said that the Trump administration would support those industries until better trade deals are in place. 

Even if the measure on Canada tariffs passes the U.S. Senate, it likely faces a veto from the president. The U.S. Supreme Court is also expected to rule on Trump’s tariff authority.

Tangled Up In Hue in Eau Claire supports about 100 to 150 local artists as an art collective. Klaus said cotton, fabrics, fibers and yarn are costing three or four times more than they used to. That hurts when margins are so thin. 

After recent extreme cold weather led Klaus to close her store for a day, she shared on social media about the struggles local businesses, including her own, are facing in western Wisconsin. She wrote that businesses such as Tangled Up In Hue are barely getting by.

“When everything feels chaotic and hopeless, supporting local is something tangible we can do for one another,” she wrote. “If Eau Claire is your home, if you care about what makes this place special, please remember the power you hold with each purchase. This is how we take care of each other. This is how we protect the community we love.”

Robbie Young, who owns Coulee Bicycle Company in Onalaska, is similarly struggling with the effects of Trump’s tariffs. He said the bike industry has long had a global marketplace and supply chain. 

To start 2025, businesses were able to hold the line on pricing, he said. Then he started seeing emails week after week about 5% or 6% price increases from suppliers or middleman distributors. 

He said he feels the effects of federal economic policies every day because he’s a consumer on top of being a business owner. 

“When I see wholesale prices expanding beyond what I would call reasonable at the retail level, it can be quite shocking,” Young said. 

Recently, he had to order new bike chains. There are dozens of types and manufacturers of chains, but, he said, the prices were outrageous and probably double what he was paying four years ago. 

Young’s message to politicians: “Recognize that we live in a truly global supply chain.” 

“If you want things being made in America, you’re going about it all wrong,” he said.