A Federal Reserve report has revealed that small businesses faced significant price pressures last year due to President Donald Trump's large-scale tax increases on imports and general inflation gains. The most common challenge faced by smaller firms was the rising cost of goods, services, and wages. More than four-in-10 firms said that increased costs associated with tariffs were a financial challenge, with retail and manufacturing firms feeling the most acute. Among firms facing higher costs related to the president’s tax increases, 76% passed on some of the higher costs and 60% absorbed some of it. The report also found rising adoption of artificial intelligence technology by small firms and little job market displacement.