Bankruptcies soared to a 15-year high in 2025 as companies struggled to cope with Trump’s trade wars
Corporate bankruptcies soared to a 15-year high in 2025 as companies struggled to cope with President Donald Trump’s trade wars, among other factors, according to a new report.
No fewer than 717 companies filed for Chapter 7 or Chapter 11 bankruptcy between January and November, according to S&P data reviewed by The Washington Post. This marks a 14 percent increase from the same period in 2024 and the highest rate since 2010, when the country was recovering from the Great Recession.
Firms that went bust pointed to inflation, interest rates and Trump’s trade policies — which have hampered supply chains and increased costs — as drivers of their financial troubles.
Business experts and economists told the Post that the Republican president’s broad tariffs have strained import-dependent companies. While inflation recently came in lower than expected — it was up 2.7 percent year-over-year in November — experts said many firms continue to shoulder added expenses to avoid raising prices for consumers.
“These companies are acutely aware of the affordability crisis confronting the average American,” Jeffrey Sonnenfeld, a professor at Yale University’s school of management, told the outlet. “They are doing their best to offset the cost of tariffs and higher interest rates but can only do so much. Those with pricing power will pass on the costs over time … others will fold.”
The White House, however, has lauded tariffs as a net positive for the country.
“Tariffs are creating GREAT WEALTH, and unprecedented National Security for the USA,” Trump wrote on Truth Social on Saturday. “Trade deficit has been cut by 60%, totally unheard of. 4.3% GDP, and going way up. No inflation!!! We are respected as a Country again.”
The increase in bankruptcy filings was most notable among industrials — firms linked to construction, manufacturing and transportation, the Post noted. The industry ranks among those hit hardest by Trump’s tariffs, with the manufacturing sector posting 70,000 job losses year-over-year in November.
Consumer-oriented companies offering “discretionary” services or products, including those in home furnishing or fashion, made up the second-biggest group. There was also a sizable surge in “mega bankruptcies” — filing by firms with over $1 billion in assets.
Among the businesses that filed for bankruptcy in 2025 was Spirit Airlines, a low-cost carrier. The Florida-based company filed for Chapter 11 in August, marking its second filing in less than 12 months.
PosiGen, a solar company headquartered in Louisiana, followed suit in November, blaming the decision on the administration’s renewable energy policies, including tariffs on imported materials and cuts to tax incentives that had made solar panels more affordable.
Federal data analyzed by Jason Miller, a business professor at Michigan State University, showed the effective tariff rate on solar materials imported into the U.S. rose to about 20 percent after May, up from less than 5 percent in previous years.
“That places a lot of strain on cash flow, especially for smaller importers,” Miller told the Post. “You then combine this with reduced federal incentives that have to be negatively impacting demand, and you have a perfect storm for elevated rates of bankruptcy.”
Martin-Schoenberger, a KPMG economist, added that the surge in bankruptcies highlights contradictions in the U.S. economy. Data published by the government this week revealed that the economy grew at an annual rate of 4.3 percent, the fastest rate in two years.
