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Economist Warns: 2025 to Be Miserable for Small Businesses

1/1/2026

Center

Trump's Policies Challenge

U.S. President Donald Trump’s policies create challenges for small business owners, says economist Paul Krugman.
Krugman calls 2025 a "miserable year" for small businesses and predicts worse conditions in 2026.
Tariffs and strict immigration enforcement strain operations, especially for firms relying on imports or labor.
Small firms lack political influence to obtain tariff exemptions, unlike large corporations.
More than 90% of U.S. exporters are small or family-owned, complicating regulatory navigation.

Left

States Regulate AI

Starting January 1, 2026, Illinois will enhance its Human Rights Act to regulate AI in workplaces, improving safety.
California will implement safety checks for AI systems and phase out plastic grocery bags, while requiring landlords to provide appliances.
Minimum wage increases will occur in 19 states, with Hawaii reaching $16 per hour.
Hawaii will introduce a tourism tax for climate action, and Utah will enforce stricter alcohol laws.

1 of 2

Trump's Policies Challenge

U.S. President Donald Trump’s policies create challenges for small business owners, says economist Paul Krugman.
Krugman calls 2025 a "miserable year" for small businesses and predicts worse conditions in 2026.
Tariffs and strict immigration enforcement strain operations, especially for firms relying on imports or labor.
Small firms lack political influence to obtain tariff exemptions, unlike large corporations.
More than 90% of U.S. exporters are small or family-owned, complicating regulatory navigation.

1 / 2