Small businesses are facing major shifts and impacts of government shutdowns, rising tariffs, tax reforms, and rapid AI adoption.
At the CO— 100 Small Business Forum, CO— Vice President and Editor-in-Chief Jeanette Mulvey sat down with Neil Bradley, Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy at the U.S. Chamber of Commerce, to unpack what this all means for small businesses for the rest of 2025 and beyond.
The shutdown’s real cost for small businesses
On October 1, 2025, the U.S. government shut down due to budget disputes between Republicans and Democrats. At the time of writing, the shutdown is ongoing, and it’s creating tangible consequences for small business contractors, loan recipients, and everyday citizens.
“Thousands of small business contractors will go without their bills being paid, and who knows when they'll have the opportunity to recoup those funds,” Bradley explained.
For small businesses waiting for an SBA loan from the Small Business Administration, Bradley warned that loan approvals are frozen indefinitely, leaving some businesses in limbo.
“Shutdowns are choices,” Bradley emphasized. “This is a bad choice, and hopefully our elected officials will realize that quickly and bring it to an end.”
[Read more: Small Business Funding: A Breakdown of Business Loan Types]
Issues impacting the US economy
The shutdown was just one example of how political gridlock affects business confidence. Despite this, Bradley said the economy remains resilient.
“I think from our perspective at the Chamber, it's not that we're worried about a recession — that [does] not [seem to be] in the cards today [which is] a good thing — I think what worries us is that we think we could be growing even stronger.”
Bradley outlined several key policies shaping the small business landscape:
- Tariffs are now averaging 18%, imposing a $600 billion tax on the economy, with a Supreme Court ruling pending on their legality.
- The “One Big Beautiful Bill” has helped small businesses avoid a major tax hike and made investment and research and development deductions permanent.
- New tax incentives encourage small businesses to partner locally to expand childcare options for working parents.
[Read more: Tax Credits Small Businesses Don't Know They Qualify For]
Regarding immigration, Bradley warned of shifting policies that could affect the worker pool.
“[The U.S. is] in the midst of pulling back … legal work authorizations, which means all of a sudden people, some of whom've been here a couple of decades, have suddenly gone from being legally eligible to work to not legally eligible to work,” Bradley explained. “That means that we don't have a lot of people that the economy needs in order to grow.”
Bradley says the Chamber is speaking with elected officials on Capitol Hill to make it easier for people to legally come to the country to work and contribute to the economy.
“Our research shows 58% of small businesses self-report [that] they're using generative AI,” Bradley said, noting that this figure has more than doubled in three years.
AI is giving small businesses a competitive edge
While policy challenges weigh on growth, Bradley said innovation — particularly AI — is fueling optimism.
“Our research shows 58% of small businesses self-report [that] they're using generative AI,” Bradley said, noting that this figure has more than doubled in three years.
Small businesses are adopting AI faster and more creatively to streamline operations, fill hiring gaps, and expand their reach. Bradley believes this inventive spirit positions small businesses at the forefront of AI-driven productivity gains, fueling stronger economic growth and proving their agility in adapting to new technologies.
“[Small businesses] are rule breakers in a really good way,” Bradley emphasized. “[They] are doing the innovative things that a lot of large businesses won't do.”
[Read more: AI for Small Businesses: How to Stay Competitive]
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