Small Business Update: Special Edition — Small Business Day 2026

With inflation pressures, shifting trade policies, workforce challenges, and global instability continuing to shape the economy, many small business owners are entering the second half of 2026 with cautious optimism. 

To kick off CO—’s 2026 Small Business Day, Jeanette Mulvey, Vice President and Editor-in-Chief of CO—, 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 the biggest economic and regulatory issues affecting entrepreneurs right now. From tariffs and tax policy to immigration reform and AI adoption, Bradley shared how small businesses are responding to uncertainty and why their resilience continues to drive the broader U.S. economy.

Small businesses are worried, but still spending and hiring

Bradley described the current economy as “complicated,” noting that 2026 began with relatively strong momentum. Deregulation efforts and the implementation of last year’s tax legislation created more certainty for businesses, but current geopolitical tensions, including conflict in Iran and the closure of the Strait of Hormuz, disrupted that stability by driving up fuel and shipping costs and weakening consumer confidence.

According to Bradley, consumers and small businesses alike are expressing growing concern about inflation and the broader economy. However, actual spending and hiring patterns remain surprisingly strong, consumer spending has remained steady, and small businesses continue to hire at high levels.

“Just in the month of March, 5.2 million people got a new job … in the private sector, [and] 80% of those 5.2 million went to work for a small business,” said Bradley. “Small businesses are not pulling back.”

Looking ahead, Bradley said the economy could move in one of two directions: Consumers and businesses could pull back on spending and hiring out of fear, or increased clarity around trade and energy prices could help stabilize confidence before those fears affect the economy.

[Read more: Hiring vs. Recruiting: A Guide to Finding the Right Talent] 

Tariff refunds and tax relief offer some breathing room

Bradley discussed the newly launched tariff refund process for businesses that paid tariffs under the International Emergency Economic Powers Act (IEEPA). Many small businesses that imported goods last year may be eligible for refunds through a Department of Homeland Security process that could return billions of dollars to importers.

“Most small businesses … were importing things and … paying tariffs for the first time under IEEPA,” he said. “There were about 58 million shipments that came in that people paid tariffs on, [and now] they are entitled to refunds.”

The Chamber has published guidance to help business owners navigate the application process, which Bradley described as relatively streamlined compared to what many expected.

The conversation also highlighted the impact of last year’s “One Big Beautiful Bill,” which Bradley said prevented a substantial tax increase for many small businesses. The legislation also restored immediate deductions for research and development expenses and strengthened businesses’ ability to fully deduct equipment purchases in the year they are made.

“[This] is great news for small businesses who are trying to grow and expand,” Bradley said.

[Read more: Small Business Update: One Big Beautiful Bill, Taxes, and Tariffs] 

Immigration and healthcare costs remain top concerns, but AI is a huge opportunity

Workforce shortages remain one of the biggest challenges facing small businesses right now. Bradley credited the current administration for securing the southern border but argued that lawmakers must now focus on long-term legal immigration reform to address labor needs across industries.

Healthcare affordability is also a pressing issue, particularly for small employers offering insurance coverage to workers. Bradley noted that businesses continue to struggle with rising premiums and said policymakers are closely watching how the expiration of enhanced Affordable Care Act subsidies affects coverage affordability.

The conversation concluded on an optimistic note with a discussion about artificial intelligence. Bradley said small businesses are rapidly adopting AI tools to improve operations and increase efficiency across the board.

“[AI] is really remarkable for everything from … improving manufacturing operations [to] maximizing your supply chain management [and] inventory,” he noted. “[There’s] virtually no aspect that we don't see … small businesses pioneering the use of AI.”

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.