As the dollar slides in 2026, rising import costs, tariffs, and inflation are squeezing local and Latino-owned businesses while exporters gain ground
As of early February 2026, the U.S. dollar has fallen roughly 11% over the past year, extending a slide that began in 2025 and leaving the currency near multi-month lows. Some analysts now describe the dollar as being in bear-market territory, a shift that is quietly reshaping costs, pricing, and opportunity across the U.S. economy.
For small businesses, the effects are uneven — and often unforgiving.
The “Double Squeeze” on Small Businesses
A weaker dollar makes imports more expensive, raising costs for businesses that rely on foreign goods, materials, or equipment. That pressure often lands hardest on small, family-run, and immigrant-owned businesses that operate with thin margins and limited pricing power.
Even businesses that do not import directly are affected. Domestic suppliers frequently pass along higher costs tied to overseas sourcing, shipping, and energy prices. Oil and freight costs tend to rise alongside a weaker dollar, pushing up operating expenses across local supply chains.
For some import-reliant small businesses, the pressure is compounded by ongoing “Liberation Day” tariffs, which trade groups estimate added an average of more than $150,000 in duties compared with 2024 levels.
The result: owners face difficult choices — raise prices and risk losing customers, or absorb costs and shrink already tight margins.
Where Opportunity Exists
Not all effects are negative. Businesses that export goods or services benefit when the dollar weakens, as U.S. products become cheaper for foreign buyers. That dynamic can support manufacturers, agricultural producers, and service firms with international clients.
The tourism sector also stands to gain. A weaker dollar makes the U.S. more affordable for international visitors, potentially boosting revenue for hotels, restaurants, and small businesses in major urban and cultural hubs.
What It Means for Consumers
For households, the impact is more direct: imported goods — from electronics and clothing to vehicles and produce — tend to cost more. International travel becomes more expensive, and higher import prices can add inflationary pressure at home.
Why the Dollar Is Falling
Economists point to several drivers:
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Interest rate cuts by the Federal Reserve, reducing returns on dollar-denominated assets.
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Trade policy uncertainty, which has unsettled investors.
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Global diversification, as some central banks shift reserves away from the dollar toward other currencies or gold.
President Trump has argued that a weaker dollar helps U.S. manufacturing. That may be true for exporters. But for much of the economy — especially small businesses and consumers — it remains a double-edged sword, with real consequences showing up at the register, not just in currency charts.
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