Trump makes gains on economy, policy with small business owners, even among Democrats

It’s often said that the economic reality on Main Street doesn’t match the mood on Wall Street, but right now small business owners are matching the market with increased confidence after a rocky start to 2025.

After a significant decline in small business confidence in the second quarter amid President Trump’s tariffs policy pronouncements, nearly half of small business owners (46%) now say that the economy is “excellent” or “good”, up from 30% in Q2, according to the quarterly WHNY News|SurveyMonkey Small Business Survey.

The improved sentiment extends across party lines, with 24% of small business owners who are Democrats describing the economy as good or excellent, up from 8% in Q2. There was a similar increase among Republican small business owners, with 67% having a positive view of the economy, 15 points higher than in the previous quarter.

The WHNY News|SurveyMonkey Small Business Confidence Index moved up to 56, from 51 the previous quarter — which had been Trump’s lowest mark in this survey other than during the Covid outbreak of his first term. The biggest move was among Democrats, among whom sentiment improved from 33 to 41 the previous quarter. Republicans confidence was steady quarter over quarter at 68, while Independents, at 47, were close to the previous quarter (45).

“Small business owners who identify as Democrats report the largest increase in sentiment,” said Sam Gutierrez, Senior Research Scientist at SurveyMonkey. “They are much more optimistic about business conditions compared with the previous quarter. Optimism also appears to be rising among Republican business owners: fewer now think the country is heading into a recession.”

The survey audience is a representative sample of small business community in the U.S., which skews conservative in political identification. The online poll was conducted by SurveyMonkey from July 7-10, 2025 among a national sample of 1,900 self-identified small business owners ages 18 and up.

The improved sentiment has translated into higher approval for President Trump, with confidence among small business owners over his handling of the job of the presidency increasing from 48% in Q2 to 57% this quarter, though the partisan divide remains wide, with 90% of Republicans expressing support and only 18% of Democrats.

By most basic measures of business confidence, the numbers are up: 44% describe current business conditions as good, up from 36% the previous quarter. Over half (51%) of small businesses expect sales to increase in the next 12 months, up from 41% in Q2. Twenty-eight percent say they will increase headcount in the next 12 months, up from 22% in Q2.

At the same time, an increasing percentage of small business owners, especially among the Gen Z and millennial generations, are making more use of AI and quickly finding a positive impact on business, and expect less hiring over time as a result.

Economic fears have not gone away entirely. In fact, concerns about recession and tariffs remain high among the majority of small business owners. But they are going down. Those who think the country is headed for a recession now stand at 61%, down from 70% in Q2. Fewer small business owners say they have been affected by tariffs or will be in the future, down from 66% in Q2 to 59% now.

Less small business owners now cite tariffs as their biggest risk, down from 17% in Q2 to 10% this quarter. Inflation remains small business owners’ biggest concern, with just over one in five (22%) citing rising prices, followed by consumer demand (18%).

“Small business owners are feeling more secure overall. As fears over the impact of tariffs subside, we’re seeing an upswing in business sentiment after a sharp decline last quarter,” Gutierrez said.

But as fears over trade policy trend lower, the worries about consumer demand on Main Street match a Wall Street worry. Goldman Sachs, for example, expects the U.S. economy to slow notably due to tariffs and inflation, and their impact on consumer spending. “Even a one-time price increase will eat into real income, at a time when consumer spending trends already look shaky,” Goldman’s chief economist Jan Hatzius wrote in a recent note to clients.

The survey data is close to where it was in Q1, after Trump’s reelection but before he unveiled the tariff policies which rocked the market and led to widespread uncertainty among businesses in April. Now, views on government policy also are trending in a positive direction:

Last quarter, 44% of business owners expected government regulations in the next 12 months to have a negative impact on their business. That’s now down to 36%.

Views of trade policy have also improved, with 40% of business owners saying it will have a negative impact over the next year, down from 51% who held this view last quarter.

And as President Trump passed his signature tax and spending bill, the percentage of small business owners who said tax policy over the next year would be a negative declined from 37% to 32%.

Even as the numbers among small business owners improve, support for tariff policy remains sharply divided along partisan lines. Eighty-one percent of Republican respondents support Trump’s tariffs policy, while 87% of Democrats oppose it. Small business owners who identify as independents are much closer to Democrats on the tariffs issue, with 71% saying they are against it.

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