Overview:
New tariffs and economic instability are hitting Black-owned businesses and workers hardest, deepening signs of a Black recession.
At the start of this year, the Joint Center for Political and Economic Studies released a report naming what many Black households and business owners were already living: signs of a Black recession. Not a metaphor, but a documented decline in living standards, marked by record Black unemployment, business contraction, and the cumulative weight of a 2025 policy agenda that has targeted the predictability, programs, and protections that Black economic participation depends on. That warning now looks prescient.
Hours after the Supreme Court ruled the President’s tariff policy unconstitutional — a ruling that, whatever its complications, injected a measure of clarity into markets that have been starved of it — the President addressed the country and promptly injected further uncertainty, announcing he would impose different tariffs to offset those struck down. For most Americans struggling with affordability, this was another whiplash moment. For Black-owned small businesses and the communities they serve, it was something more: the latest entry in a pattern of policy choices that have made planning, survival, and growth measurably harder.
Uncertainty Is the Policy
Uncertainty is one of the most disruptive forces for a small business. Simply put, you can’t plan if everything keeps changing. If you own a clothing business and the price of fabric fluctuates wildly, it becomes nearly impossible to determine how to produce and price your goods. In that environment, simply knowing what fabric costs becomes the foundation upon which every other decision rests. That basic economic stability has been denied, and this past week’s deliberate reinjection of confusion is not a detour from the pattern. It is the pattern and increasingly appears to be a governing philosophy.
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The Federal Reserve has been monitoring tariff policy carefully, and its officials have been unusually candid in response. Atlanta Fed President Raphael Bostic captured the moment plainly, describing how businesses are processing the whipsaw of tariff moves: “We are all doing calculus now, trying to figure out sort of how this feeds through to our individual businesses, as well as to our partners, our suppliers, and then to consumers.” Bostic noted that businesses were already beginning to pass tariff costs on to consumers, and that he expects higher prices through the first half of the year. New York Fed research grounds that concern in data: 90% of the economic burden from 2025 tariffs fell on U.S. firms and consumers.
When Small Businesses Contract
Small businesses are the country’s leading private sector employer, and when they contract, entire communities feel it. Black-owned small businesses face a compounding burden: the broad economic headwinds created by tariff uncertainty, and the targeted dismantling of the equity programs and administrative structures this administration has moved aggressively to eliminate.
The data is bearing this out. The Labor Department reports Black unemployment reached its highest level in four years in 2025, while tariffs have driven up both input costs for businesses and retail prices for household staples. Small businesses with fewer than 20 employees, the size category that includes most Black-owned firms, have shed 62,000 jobs since January 2025. The Center on Budget and Policy Priorities has been direct: “The standard of living for Black households and small businesses faltered in 2025 due to a variety of targeted policies from the Trump Administration, including tariffs.”
This is what the Joint Center meant by signs of a Black recession. Conditions that, applied to the broader population, would meet the textbook definition of a recession. It is an accumulation of choices, and this past week was another one.
A Missed Opportunity for Stability
The Supreme Court’s tariff ruling last week represented a genuine, if narrow, opportunity; a moment where the policy environment might have offered some relief to businesses and households that have had very little of it. Instead, within hours, that opening was closed by the President’s decision to impose new tariffs.
Lawmakers and the administration still have a choice. Congress can reassert its constitutional authority over trade policy. The administration can acknowledge that the uncertainty it is generating has costs — measurable, documented costs borne disproportionately by communities that not positioned to bounce back.
The Supreme Court’s decision also left open the question of what happens to the estimated $175 billion in tariff collections now subject to potential refund. That is not just a legal question — it is a policy opportunity. Lawmakers and the administration could use this moment to deliver the predictability and stability that markets and small businesses are demanding: by prioritizing refunds to small businesses harmed by those tariffs, by investing in rehiring some of the 62,000 jobs shed since January, and by finally giving some breathing room to the communities that can least afford another year of this.
As we close Black History Month, those communities deserve more than acknowledgment. They deserve the relief, stability, and political prioritization that this moment makes possible.
Eric Morrissette is a Joint Center Senior Fellow and former Acting Under Secretary of Commerce under the Biden-Harris Administration, overseeing the Minority Business Development Agency,