Small Business Update: Preparing for 2026 and Beyond

As 2026 approaches, policy shifts, global challenges, and emerging technologies continue to shape the small business landscape. While the U.S. economy is growing steadily and recent tax reforms offer relief, challenges like tariffs, workforce shortages, and regulatory compliance concerns continue to affect business operations and decision-making.

In this special year-end Small Business Update, U.S. Chamber of Commerce EVP and Chief Policy Officer Neil Bradley joined CO— Editor-in-Chief Jeanette Mulvey to discuss the trends and changes small business owners should be watching and how to prepare for the year ahead.

The impact of tax policy, tariffs and global trade

Recent tax reforms have created welcome relief for small businesses. The “One Big Beautiful Bill” of 2025 averted a major tax hike and introduced long-term incentives that can help small businesses invest and grow.

“We avoided a massive tax increase,” Bradley explained. “The 20% pass-through deduction [that] most small businesses use to lower their taxes … was going to expire at the end of this year. That has now been made permanent.”

Other changes include the return of full, same-year deductions for research and development expenses and 100% capital expensing for equipment and owned (not leased) company vehicles, both of which are retroactive to earlier tax years. 

Meanwhile, global trade tensions and legal challenges to tariff policy are adding new uncertainties for small businesses. Current tariff levels remain significantly elevated (eight to 10 times higher than at the start of 2025, according to Bradley) and are contributing to ongoing inflation and supply chain pressure. 

If the Supreme Court strikes down the President’s authority under the International Emergency Economic Powers Act (IEEPA), businesses that paid tariffs may be eligible for refunds, although the process remains unclear.

“Some businesses are already filing challenges [to the] tariffs they’ve paid, just in anticipation that they might need to do that,” said Bradley.

Workforce development and immigration: building a stronger talent pipeline

Small businesses continue to face workforce challenges, including labor shortages and shifting immigration policies. One major concern is the current administration’s proposed $100,000 fee per H-1B visa, which the U.S. Chamber is actively challenging in court. Though often associated with large corporations, Bradley noted that three-quarters of H-1B users are small businesses, many of whom hire just one foreign worker.

“The $100,000 fee  … would be particularly harmful for all those small businesses [that] can't afford it and wouldn't be able to access the talent that they need,” he said.

Another concern is the recent federal policy challenges that may lead to the early revocation of some work authorizations. Bradley said employers currently have no reliable way of knowing when an employee’s authorization has been rescinded, and the Chamber is pushing for clearer guidance to protect small businesses from penalties.

To help address long-term workforce readiness, the Chamber has partnered with the College Board to launch a new AP Business and Personal Finance course for high school students. The course is designed to teach essential business skills—like profit and loss, marketing, and personal budgeting—to college-bound and workforce-bound students.

“Our survey data says 84% of [high school graduates] aren’t prepared to enter the workforce,” Bradley noted. “Things that you learn traditionally when you get your first job, you can learn … in high school, and [our course] … becomes a credential that employers could recognize.”

The challenges of evolving AI regulations

A 2025 U.S. Chamber survey found that 58% of businesses use generative AI in their day-to-day operations (up from 40% in 2024), and many more use programs built on AI. Given the widespread adoption of AI among small businesses, Bradley expressed concern about proposed AI regulations, which he said vary widely from state to state.

“Various states are considering proposals,” he said. “Sometimes they're requiring that AI-generated content … in TV commercials [or] political ads be labeled, but not in other commercial things. Other states are wanting labels on everything.”

This inconsistency across state lines is “an area of deep concern” for the U.S. Chamber: “We … believe you need a national set of rules that you can be comfortable following and knowing that you're not tripping up,” explained Bradley.

The outlook for 2026 and beyond

Small businesses are currently facing a complex mix of challenges and opportunities, from shifting tax policy and global trade tensions to rapid advances in AI and growing workforce needs. Bradley urged business owners to stay informed and engage with policymakers and advocacy groups like the U.S. Chamber.

“If you see a particular … regulatory burden that's impacting your business, send us a note,” Bradley said. “I think we have an open door, particularly with this administration, to try to roll back some of those regulatory requirements and give a little relief to small businesses.”

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