The rising costs of imported goods for businesses dovetail with the impacts of proposed non-military federal spending cuts. The latter sucks money out of the consumer economy. Consumption accounts for two-thirds of the U.S. economy. That is a big deal. It raises the risk of economic contraction, or a recession. The devil is in the details of this one-two punch combo, trade and fiscal policy, for small businesses. To help us understand what is at stake and why, we turn to Carolina Martinez, CEO of small business advocacy group CAMEO Network.
Her comments on how tariffs and economic uncertainty are harming America’s small businesses focus in part on the added impacts of proposed federal spending cuts under the president’s budget bill that has passed the House and is in the Senate now. One example is a potential zeroing out of funding for the Community Development Institutions (CDFI, operated by the U.S. Treasury Department). This source of funding is crucial to connecting small business owners in low- and moderate-income communities to affordable capital—loans with reasonable interest rates. The following is a lightly edited email interview with her.