With 2026 on the horizon, small businesses are navigating a changing landscape shaped by policy shifts, global challenges, and emerging technologies. Despite the steady growth of the US economy and recent tax reforms providing relief, small businesses continue to grapple with issues such as tariffs, workforce shortages, and regulatory compliance concerns.

In this year-end Small Business Update, Neil Bradley, EVP and Chief Policy Officer at the U.S. Chamber of Commerce, joins CO— Editor-in-Chief Jeanette Mulvey to discuss the trends and changes small businesses need to be aware of as we move into 2026.

The Impact of Tax Policy, Tariffs, and Global Trade

Recent tax reforms have brought good news for small businesses. The “One Big Beautiful Bill” of 2025 prevented a major tax hike and introduced long-term incentives to encourage investment and growth in small businesses.

“The 20% pass-through deduction that most small businesses use to lower their taxes was set to expire, but is now made permanent,” explains Bradley.

Other notable changes include full, same-year deductions for research and development expenses, and 100% capital expensing for equipment and owned (not leased) company vehicles. These changes apply retroactively to earlier tax years.

However, global trade tensions and tariff policy challenges are creating uncertainties for small businesses. Tariffs remain high, contributing to ongoing inflation and supply chain pressures. If the Supreme Court overrides the President’s authority under the International Emergency Economic Powers Act (IEEPA), businesses that paid tariffs may be eligible for refunds – a process that remains unclear.

“Some businesses are already challenging the tariffs they’ve paid, anticipating the need for action,” says Bradley.

Workforce Development and Immigration: Building a Stronger Talent Pipeline

Labor shortages and changing immigration policies continue to present challenges for small businesses. One pressing concern is the current administration’s proposed $100,000 fee per H-1B visa, a move the U.S. Chamber is actively challenging in court. Though often associated with large corporations, Bradley notes 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 small businesses that can’t afford it and rely on foreign talents,” he explains.

Recent challenges to federal policy may lead to early revocation of some work authorizations, leaving employers with no reliable way of knowing when an employee’s authorization is rescinded. The Chamber is pushing for clearer guidance to protect small businesses from penalties.

As part of a long-term solution to 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 aims to equip both college-bound and workforce-bound students with essential business skills.

“Our survey indicates that 84% of high school graduates aren’t ready for the workforce. This course aims to provide them with skills they would traditionally learn on the job, and could be recognized by employers as a credential,” Bradley notes.

The Challenges of Evolving AI Regulations

A 2025 U.S. Chamber survey found that 58% of businesses use generative AI in their daily operations, and many more use programs built on AI. As AI adoption increases among small businesses, Bradley expresses concern about proposed AI regulations, which vary widely from state to state.

“States are considering various proposals that require different things – some demand labels on AI-generated content in TV commercials or political ads, while others want labels on all commercial content,” says Bradley.

These inconsistencies present “an area of deep concern” for the U.S. Chamber, who believes in the need for a national set of rules that businesses can follow without worry of tripping up regulatory compliance.

Outlook for 2026 and Beyond

Small businesses face a complex mix of challenges and opportunities, from shifting tax policy and global trade tensions to rapid advances in AI and growing workforce demands. Bradley urges business owners to remain informed and engage with policymakers and advocacy groups like the U.S. Chamber.

“If you see a regulatory burden impacting your business, let us know. We have an open door with this administration to potentially roll back some of those regulatory requirements and provide relief to small businesses,” Bradley encourages.

CO— aims to bring you inspiration from leading respected experts. However, you should consult a professional who can advise you based on your individual situation before making any business decision.