The storefront at The Tiny Owl, a children’s store in New York City, has gotten a refresh. There are paper ghost decorations and jack-o’-lantern onesies hanging in the window.

“We've got our Halloween decor up. But the sign, yeah,” sighed owner Nicole Panettieri, looking up at the words “Available for Lease.” “The sign is really sad.”

The Tiny Owl is closing at the end of October. And there are a few reasons why. Panettieri’s landlord increased the rent, and sales have dropped since a Target opened down the street. But these are all types of problems Panettieri has navigated before. What’s new is tariffs, which have increased her costs by about 20%.

“So it’s a pretty significant jump, especially when it was a lot of our opening price point merchandise,” she said, pointing at plush toys and puzzle that she used to sell for around $8. “Those prices all went up to $10 to $15.”

Panettieri started seeing more shoppers pick something up, check the price and slowly put it back on the shelf. And the drop in sales is taking a toll. She’s cut her own pay and let go of two workers. She’s discounted everything in the store and once it closes she’ll refocus on her women’s boutique down the street.

“I'm a small business. I don't have investors,” she said. “This is my life savings.”

The reality of running a business is that it is hard — even when the economy is steady. The last six months of shifting tariff policy have created a lot of uncertainty for businesses, which will continue as the Supreme Court weighs in on the tariffs’ legality. And even if most of them end up going away, for many business owners, it’ll be too late. 

“It only takes a small shift to ruin what was otherwise a profitable enterprise,” said Scott Lincicome, vice president of economics and trade at the Cato Institute. “The tariffs are that kind of tipping point.”

That tipping point seems to be coming sooner for small businesses than big ones. Corporate behemoths have lobbyists and lawyers to fight tax policy. They can lean on their scale to negotiate better deals with manufacturers and suppliers. And they have the capital to wait and see what happens.

“There’s a real dichotomy that’s opened up between the haves and the have-nots when it comes to tariffs,” Lincicome said.

For small businesses, every economic policy change can feel seismic, especially for manufacturers, since they’re toward the start of any supply chain. The teeter-tottering of tariff policy has made business impossible for True Places, a Pennsylvania-based company that manufactures outdoor portable chairs in Cambodia.

“The tariff rate on our products has gone from 0% to 49% to 10% to 36% to 19%,” said co-founder Ben Knepler.

The tariff rates jumping up and down have drained the company of money. Knepler doesn’t have enough to pay the tariffs on the next shipment. So he’s halted production. They’re not making more new chairs and he only has a handful left in stock. 

“Just from a business survival and cashflow perspective it’s incredibly difficult, so we’re not sure what we’re going to do,” said Knepler, who is considering only selling the chairs internationally to avoid the tariffs altogether. “We literally cannot afford to bring our own product into our own market.”