How have taxes and tariffs changed for businesses in 2025?

Mike Devereux

Sep 09, 2025

6 min read

Both taxes and tariffs have changed dramatically in 2025. President Trump’s One Big Beautiful Bill (OBBB) Act rewrote major elements of the tax code while his tariff policies significantly increased the cost of importing goods into the United States.

You’re almost certainly affected by at least some of 2025’s tariffs or tax updates. So, what do you need to know?

Tariffs are now a huge factor for businesses in 2025

In 2025, tariffs have gone up to levels not seen since the 1930s. This creates major challenges for businesses that rely on imported goods, although you may be able to mitigate some of the impact.

What are tariffs?

Tariffs are a tax on imports. If a domestic business, like a manufacturer or a retailer, imports goods from a country that is subject to tariffs, tariffs will be due on those goods when they arrive in the U.S. Tariff rates are based on the country of origin, not where the import is shipped from.

Who pays tariffs?

Tariffs are paid by the importer of record (buyer), not the seller. Dues are collected by U.S. Customs at ports of entry, like the Port of Los Angeles.

How have tariff rates changed in 2025?

Since Trump began imposing tariffs shortly after taking office, the average tariff rate on US imports has jumped from 2.4% to roughly 18%. This is unprecedented in modern history.

Roughly $26 billion per month in tariffs is being collected.
Tariff rates vary considerably from country to country and by sector.
Rates also frequently change, sometimes dramatically.
Tariffs are regularly announced and then temporarily paused.

Which laws govern tariffs?

The current tariffs are largely imposed under three specific laws. These include Section 301 of the Trade Act of 1974, Section 232 of the Trade Expansion Act of 1962 and the International Emergency Economic Powers Act (IEEPA) of 1977.

Section 301: Specifically focuses on China by imposing tariffs at rates of 7.5% to 25%.
Section 232: Targets specific sectors of the economy, including tariffs on steel and aluminum at 50%, as well as automobiles and auto parts at 25%.
IEEPA: Imposes tariffs of 10% to 50% on virtually all countries, including those already affected by other tariffs like China.
USMCA: Imports from USMCA partners that are certified as manufactured in North America are currently exempt from tariffs.

Note that tariffs imposed under different laws stack, so goods imported from a country subject to 25% tariffs under one rule and 10% under another could face a combined tariff rate as high as 35%.

What goods are subject to tariffs?

Virtually all U.S. imports are currently subject to tariffs. Exact rates depend on the country of origin.

Certain goods are tariffed at especially high rates, including metals like steel, aluminum and copper.
The administration is also looking at new tariffs for critical minerals as well as pharmaceuticals, semiconductors and trucks.
In specific circumstances, some companies are also receiving exemptions from certain tariffs.

How are U.S. exports affected by tariffs?

U.S. tariffs don’t affect American exports directly. However, other countries are imposing their own retaliatory tariffs on U.S. exports in response to the Trump administration’s tariffs.

How long will tariffs stay in place?

We don’t know. The White House seems passionate about tariffs, but it also uses them as a negotiating weapon.

As tariffs are imposed on individual countries at different rates, any permanent resolution likely involves country-by-country negotiations. Permanent trade agreements also need to be ratified by the Senate, which the administration has so far shown little interest in.

Another factor here: USMCA is up for review in July of 2026, which could affect whether goods covered under that agreement remain exempt from tariffs. The White House has stated it is looking for significant revisions to the agreement, including rules that would affect goods manufactured in China and transshipped through Mexico and goods manufactured in Mexico by Chinese-owned companies.

There are also lawsuits challenging the president’s authority to so broadly impose tariffs that are winding their way through the courts. At some point, the Supreme Court will likely rule on this, but we don’t know when.

How could tariffs affect your business?

Tariffs have created new economic uncertainty and rising costs for businesses. In a poll taken during our mid-year policy pulse webinar, almost 60% of business leaders polled stated they had been negatively affected by tariffs.

To navigate this environment, it’s more essential than ever that businesses understand their supply chains and how they are exposed to changing tariff rules and impacts like:

Uncertainty: Because high tariffs have not just been imposed but also regularly changed, businesses are operating under a high degree of uncertainty as to their long-term tariff costs. According to an economic brief, 30% of surveyed firms describe trade and tariffs as their largest business concern.
Rising costs: Tariffs have increased the price U.S. businesses pay to import goods. Even though the cost may be ultimately passed along to consumers, importers pay the tariff upfront, which creates additional financial pressure.
Transshipping issues: Tariffs reflect country of origin, not shipment. U.S. customs will decide whether they believe goods have been transshipped, using factors that include whether the goods have been substantially transformed after leaving their country of origin and whether the goods have received a new harmonized tariff schedule (HTS) code.
Supply chain complications and visibility: Businesses need to understand exactly where their goods actually come from so they can know more accurately what their costs could look like. This is especially important for businesses importing metals like steel and aluminum, as tariff rates on those metals are especially high and depend on factors like where the metal was smelted and cast.
Technological limitations: Many enterprise resource planning (ERP) platforms will often only tell you where the product shipped from, not where it was originally made. You may need to upgrade your digital systems to give you better tracking capabilities for a deeper insight into your supply chain.

Consult with your tax advisor to get detailed guidance on how you’re affected.

Major domestic tax changes took place in 2025

The OBBB, which passed in July after narrow votes in the House and Senate, changed the tax code significantly. It affected both existing provisions and added new ones.

What are the tax changes in the OBBB?

The OBBB permanently extended key provisions of the Tax Cuts and Jobs Act (TCJA) of 2017 that were expiring or had already expired. Here’s what could affect your business:

Individual tax rates from the TCJA are permanently extended, which could have an impact on consumer spending.
Lifetime giving exemption was permanently extended at $15 million ($30 million for married couples), indexed for inflation.
The 20% deduction for pass-through entities under Section 199A was permanently extended.
Section 174 now allows for the immediate deduction of domestic R&D expenses once again.
100% bonus depreciation is back and permanent.
Key international tax provisions like GILTI and FDII are preserved but slightly modified.

What tax rules were introduced or cut under the OBBB?

The OBBB eliminated or added several key rules. These include ending most clean energy incentives and limiting taxes on overtime and tips.

Most clean energy tax incentives, including those for solar and wind projects, are being rapidly phased out.
Eligible workers can deduct up to $25,000 in tips and overtime income.
The SALT deduction is increased to $40,000. However, this is only through tax year 2029.

What could changes to key provisions like Section 174 mean for your business?

Depending on your specific sector, changing tax laws could provide both opportunities and challenges. Consult your tax advisor for specific guidance on how you could be affected and what to do next.

43% of business leaders Wipfli polled said the OBBB affected their planned capital or equipment investments. 27% said no and 30% were unsure.
If you conduct domestic R&D or plan to invest in your plant, machinery and equipment, provisions like Section 174 or 100% bonus depreciation could be especially valuable.

How Wipfli can help

Get help adapting to new tariff and tax rules. Work with our team of advisors to develop a tax strategy that will minimize your burden and create new opportunities. Start a conversation here or visit our tax policy center for more insights into regulatory changes.

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