US Business Owners Stay Optimistic Despite Tariffs and DOGE

America's small business owners are experiencing a significant shift in economic sentiment, with many expressing optimism about tariffs and the Department of Government Efficiency's (DOGE) budget cuts.

The first Freedom Economy Index (FEI) of 2025, conducted by RedBalloon and PublicSquare between February 25 and March 7, surveyed over 50,000 business owners across 34 states. It revealed that 68% of respondents expect "slow" or "robust" economic growth this year.

In contrast to the October survey, where nearly 60% of small business owners feared a recession, the outlook has notably improved.

The shift in recession concerns occurred after the election, according to the FEI, with 80% of business owners reporting an improvement in their outlook since President Donald Trump secured his second term. Only 6.6% of respondents said their view of the economy had become more negative.

Almost one-third of business owners are planning to expand their hiring this year, and they appear largely unconcerned about the tariff debate. However, inflation remains a significant worry.

When asked about their top three concerns for the next six months, nearly 70% cited inflation, followed by taxes and regulations. Tariffs were the least of their concerns, with only 16.9% listing them as a top worry.

Six in 10 small business owners still report that high inflation remains a problem, though the October survey showed nearly 88% citing it as a major issue.

Previous FEI surveys have suggested that owners attribute the record-high inflation under the Biden administration to excessive government spending, which has sparked their enthusiasm for DOGE's efforts to reduce such spending.

In President Trump's first 100 days, small business owners' top priority is to eliminate wasteful spending and reduce the size of government, with 78.4% of respondents placing it at the top of their list.

Nearly 50% of survey respondents express "extreme confidence" that DOGE chair Elon Musk will succeed in reducing spending waste, while only 2.8% are "not at all confident."

When asked about DOGE's top agency priorities, 33.7% of business owners want Musk to focus on the Treasury and the Internal Revenue Service. The Departments of Health and Human Services, Education, and Justice ranked second, third, and fourth, with each receiving about 15% of the vote.

Additionally, 76.7% of front-line businesses believe the criticism of DOGE's access to potentially sensitive federal data is merely "fake outrage" from those opposed to the Trump presidency.

Musk is the most favored Trump advisor among American business owners, with 79.1% expressing strong approval. He is followed by Defense Secretary Pete Hegseth and HHS Secretary Robert F. Kennedy, Jr.

The business owners' proposed solutions to economic challenges are grouped into seven key policy areas: reducing regulation, developing a more skilled workforce, lowering taxes, improving access to capital, controlling inflation, fostering economic stability, and reducing energy costs.