A Tariff Workaround, SBA Leader Sets Agenda, and Impact of Mass IRS Layoffs

Hey everybody, it's Gene Marks and welcome to this week's episode of the Paychex THRIVE Week in Review. This is where we take a few items in the news, and we talk a little bit about how they impact your small business and mine. So, let's get right to it, shall we?

The first item on the news happens to deal with tariffs. According to the Wall Street Journal last week, President Trump plans another 10% tariff on products from China. The U.S. plans to impose an additional 10% tariff on imports from China over its role in the fentanyl trade and move forward with 25% tariffs on products from Canada and Mexico, the president announced.

The China move will take effect this coming week, along with the Canada and Mexico actions. It'll double up on the previous 10% additional tariff that Trump placed on Chinese products earlier this month.

So, be aware of the tariffs are a real thing. They're going up certainly for goods from China, and also it seems right now from goods from Mexico and Canada.

A couple thoughts for you, because I've written about this recently in the Philadelphia Inquiry and other places. Obviously, the more you can buy American, the better, but if you need some help in sourcing alternative suppliers from overseas that might be a more tariff-friendly areas, try the World Trade Center’s Association at wtc.org. And also look into bonded warehouses or warehouses that are in free trade zones.

I just did a piece last week in the Philly Inquirer about this. If you use a bonded warehouse or warehouse in a free trade zone, and you have your product sent there, there will not be tariffs until you take the product out of the warehouse. You might be able to hold your products in there long enough to wait out the negotiations with tariffs and maybe avoid any tariffs.

So, it is a way to deter and defer tariffs into the future, which might help with your cash flow and might also help you avoid any potential tariffs that are being imposed right now. It's warehouses and free trade zones or bonded warehouses.

The second item in the news comes from executivegov.com and it's reporting on the new head of the Small Business Administration, Kelly Loeffler. Last week she unveiled her top priorities for the Small Business Administration – and there were three.

The first is supporting the America First agenda. Miss Loeffler says to advance the current administration's America First agenda, SBA will revamp its Office of International Trade into the Office of Manufacturing and Trade to promote fair trade practices, economic independence, and job creation. It will also advance partnerships with other agencies to scale technology startups and innovative manufacturing to promote Made in America.

Number two, she says she wants to do more to empower small business. It will empower the Office of the Advocacy to determine and eliminate burdensome regulations, work with DOGE to evaluate multiple digital interfaces and improve user experience by assessing its technology for cybersecurity, customer satisfaction, and response times.

And finally, Miss Loeffler said that she will be addressing wasteful spending and fraud. She says to address fraud, SBA will request an independent financial audit, assess all options to protect the solvency of loan programs, to restart its dormant collections programs, and restore its underwriting standards.

So, those are the three things that, Kelly Loeffler, the new administrator of the Small Business Administration, will be doing.

Obviously, the SBA, in need of a little bit of overhaul – although it is a great agency – I wrote recently in The Hill about whether or not the Small Business Administration should actually be abolished with its major programs rolled into other parts of the government, but I don't foresee that happening any time soon. The SBA there right now does provide great loan programs and services to small businesses.

Finally, a report from Time this past week was talking about how mass layoffs at the IRS will affect tax season. According to time.com, the Internal Revenue Service has fired 7,000 workers in Washington, D.C. and around the country, layoffs occurring right as the 2025 tax return filing season hits full steam.

The cuts are one step in the change of the newly created Department of Government Efficiency – that's DOGE. That's their goal to reduce the deficit by $1 trillion, which has begun with mass layoffs and multiple government agencies, leaving federal employees baffled and setting the stage for future legal battles.

In a statement obtained by the Washington Post, former IRS commissioner Charles Reddick, who worked under the current president's first term, stated that there should not be a significant impact on current filing season operations, but some people don't agree.

“If you fire thousands of IRS employees broadly during the tax season, it's hard to do that in a way that doesn't pose significant risks to the filing season.” This is from Michael Kasher. He's the Deputy Director of the Tax Law Center at NYU Law.

So, will all these firings have an impact on your business and your filings and any customer service questions that you might have? I think that the disruption itself is certainly going to have an impact, which means the earlier you can get your tax work done and the more you lean on your tax professionals for advice, that seems to be the best way to go about things amidst all the disruption that we are seeing among government operations with the new administration.

My name is Gene Marks, and you have been watching or listening to this week's episode of the Paychex THRIVE Week in Review. If you need any help or advice or tips on running your business, please sign up for our Paychex THRIVE newsletter. Go to paychex.com/thrive.

I'll be back to you next week with a few more items in the news that impact your small business, and a few words of wisdom on why and how you can navigate around that. But for now, thanks for watching or listening. We'll see you then.

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I'm your host, Gene Marks, and thanks for joining us.

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