September 28, 2025

Small Businesses Face Challenges in Texas Due to Tariffs and Water Restrictions

News Summary

Small businesses in Texas, particularly in Corpus Christi, are grappling with significant challenges, including rising expenses from tariffs and strict water restrictions. Entrepreneurs are struggling to maintain their operations amid economic strains and are increasingly seeking support from community lenders. The U.S. Chamber of Commerce is advocating for tariff relief, while local business owners are facing extreme limitations on resources, with some experiencing dramatic drops in revenue. As the situation remains tense, the future of small enterprises in the region hangs in the balance.

Texas is witnessing a significant struggle for small businesses as they grapple with economic challenges posed by tariffs and severe water restrictions. These factors are creating a difficult environment for growth and sustainability within the small business sector, which is crucial for the state’s economy.

LiftFund, a community lending organization, is striving to support small and micro businesses through various loan programs, which present an alternative to traditional bank loans. Alma Valdez-Brown, a Business Development Officer at LiftFund, emphasizes the accessibility and supportive nature of these loans in contrast to the stringent requirements often associated with conventional banks.

Among these small businesses, B & B Diamonds, based in Austin and owned by Alon Bernstein, is experiencing substantial economic pressure due to ongoing tariffs. Bernstein, who has owned the diamond business since 1996, reports frustration and panic stemming from financial losses related to exports necessary for the re-cutting of gemstones. The tariffs complicate both wholesale transactions and manufacturing processes, leading to unpredictable financial outcomes that compromise small business operations.

Marketing expert Raji Srinivasan points out that small businesses generally face limitations in cash flow and human resources, making them particularly vulnerable in challenging economic climates. The U.S. Chamber of Commerce has noted an unprecedented increase in requests for assistance from small businesses impacted by tariffs. They have petitioned the Trump administration for tariff exclusions specifically for small business importers, reflecting a pressing need for relief.

In addition to tariff challenges, certain regions of Texas, such as Corpus Christi, are facing Stage 3 water restrictions, which are critically affecting local businesses. Mike Garcia, who owns 360 Landscape, reports a dramatic 75% decline in business volume due to the stringent water limits, prompting him to reduce his workforce from ten employees to four. Garcia is exploring options for city grants, which could provide much-needed financial support, though he requires increased inquiries from potential customers to stabilize his business.

Local officials have warned that the situation may deteriorate further with the potential implementation of Stage 4 water restrictions by May 2025. Stage 3 restrictions ban outdoor watering and vehicle washing, but do little to alleviate industrial water use, which accounts for a staggering 60-80% of the city’s total water consumption. Notably, major industries, including Tesla’s Lithium Refinery, are projected to consume approximately 8 million gallons of water daily, compounding the issue.

At least 30 corporations are now contesting a recent hike in water rates aimed at moderating usage costs for high-demand industries. The management of water resources in Corpus Christi is further complicated by the multiple entities involved in the purchasing and selling of water, making tracking and allocation more challenging.

Drew Molly, the CEO of City Water, has expressed a willingness to discuss water management strategies, which include the possibility of desalination through the Inner Harbor Desalination Plant. This facility is expected to generate 30 million gallons of water daily, with half designated for industrial use. However, environmental advocates are raising concerns about prioritizing corporate profits over community water needs, highlighting potential conflicts with local residents’ welfare.

The consensus among city leaders indicates that without immediate measures, such as increased water management efficiency and relief from tariff-related financial burdens, small businesses in Texas could face dire conditions in the near future. With ongoing challenges from both tariffs and water restrictions, the outlook for many small businesses remains precarious.

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Author: STAFF HERE GEORGETOWN

The GEORGETOWN STAFF WRITER represents the experienced team at HEREgeorgetown.com, your go-to source for actionable local news and information in Georgetown, Williamson County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Red Poppy Festival, Georgetown Swirl, and Christmas Stroll. Our coverage extends to key organizations like the Georgetown Chamber of Commerce and the Downtown Georgetown Association, plus leading businesses in manufacturing and tourism that power the local economy such as local wineries and historic downtown shops. As part of the broader HERE network, including HEREaustin.com, HEREcollegestation.com, HEREdallas.com, HEREhouston.com, HEREgeorgetown.com, and HEREsanantonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.