Corporate bankruptcies surged in 2025, rivaling levels not seen since the immediate aftermath of the Great Recession, as import-dependent businesses absorbed the highest tariffs in decades.
At least 717 companies filed for bankruptcy through November, according to data from S&P Global Market Intelligence. That’s roughly 14 percent more than the same 11 months of 2024, and the highest tally since 2010.
Companies cited inflation and interest rates among the factors contributing to their financial challenges, as well as Trump administration trade policies that have disrupted supply chains and pushed up costs.
But in a shift from previous years, the rise in filings is most apparent among industrials — companies tied to manufacturing, construction and transportation. The sector has been hit hard by President Donald Trump’s ever-fluid tariff policies — which he’s long insisted would revive American manufacturing. The manufacturing sector lost more than 70,000 jobs in the one-year period ending in November, federal data shows.
Consumer-oriented businesses with “discretionary” products or services, such as fashion or home furnishings, represented the second-largest group. This contingent usually tops the list and includes many retailers, and its retrenchment is a signal that inflation-weary consumers are prioritizing essentials.
The S&P data reflects both Chapter 11 and Chapter 7 filings. In the former, also known as a reorganization, the business goes through a court-administered process to restructure its debts while it continues to operate. Under Chapter 7, the company closes down and its assets are sold off.
Economists and business experts say the trade wars have pressured import-heavy businesses, which are reluctant to raise prices by too much for fear of alienating consumers. The White House did not respond to requests for comment.
Though inflation is currently lower than many economists expected — prices climbed at an annual pace of 2.7 percent in November — many businesses still are eating new costs themselves to hold the line on prices for buyers, experts say. That’s leading to a certain culling of the herd as already-fragile companies struggle to keep up.
“These companies are acutely aware of the affordability crisis confronting the average American,” said Jeffrey Sonnenfeld, a professor at Yale University’s school of management. “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.”
Among the total was a surge of “mega bankruptcies,” or filings by companies with more than a $1 billion in assets, during the first half of 2025. According to the economic consultancy Cornerstone Research, there were 17 such bankruptcies from January through June, the highest half-year number since the covid-19 outbreak in 2020. Consumer discretionary businesses, including retailers At Home and Forever 21, accounted for several of those filings.
Matt Osborn, a principal at Cornerstone who authored the September report, said these large companies cited high inflation and interest rates among the factors that have impinged on consumer demand and made it harder to raise capital. Changing federal policies around renewable energy and international trade also were contributors, he wrote.
Among industrials, bankruptcies spanned a mix of manufacturers and suppliers, as well as transportation-oriented firms and renewable energy companies. Many of those companies had specific preexisting problems unrelated to tariffs and the economy.
Louisiana-based PosiGen is among several residential solar companies that filed for Chapter 11, which it attributed to changes in renewable energy policy. The Trump administration has deprioritized the tax incentives that make solar panels more affordable to homeowners, as well as imposed “steep tariffs on imported materials that are necessary to construct solar projects, including solar modules, inverters, racking, and structural steel,” the company said in a Nov. 25 filing in U.S. Bankruptcy Court in the Southern District of Texas.
The effective tariff rate for imported solar cells and panels climbed to roughly 20 percent after May 2025, compared with less than 5 percent in prior years, according to federal data analyzed by Jason Miller, a business professor at Michigan State University. U.S. solar importers paid close to $70 million a month in import duties in the second half of the year for the most common type of panel, Miller said.
“That places a lot of strain on cash flow, especially for smaller importers,” Miller said. “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.”
In late February, Nikola Corp., an Arizona-based maker of electric trucks, filedfor Chapter 11 protection. It started producing battery-powered trucks in 2022 and scaled up to ship more than 200 vehicles last year. But a battery recall resulting from what it called a “battery pack thermal event” cost it an estimated $56 million, according to its February bankruptcy filing. It also agreed to pay an unrelated $125 million civil fine to the Securities & Exchange Commission.
Spirit Airlines, the budget carrier known for its rock-bottom prices and bare-bones amenities, filed for Chapter 11 bankruptcy in August — its second such filing in less than a year. Verijet, a private jet company based in Florida, filed to liquidate.
Bankruptcies within this sector reflect the effect tariffs have had on imported raw materials, as well as broader consolidation within the transportation and freight sectors, said Meagan Martin-Schoenberger, senior economist at KPMG.
Though the government has made some tariff exemptions, they’ve primarily benefited the tech sector, specifically those connected to artificial intelligence, she said, leaving behind some lower-tech industries.
Surveys have shown consumer sentiment worsening throughout the year. A widely followed surveyof consumer sentiment from the University of Michigan tumbled around 28 percent year over year in November. As such many are reticent to spend on nonessentials.
Retailers have felt this acutely, especially those selling discretionary items such as costume jewelry, crafts and furniture, which consumers often forgo to afford groceries, utilities and rent. By one estimate, Americans will spend an additional $1,800 a year because of tariffs.
The Trump administration’s frequent tariff changes during the peak holiday-ordering period also left some companies off-kilter. Because many rely on imports from China and other Southeast Asian countries, some businesses ended up spending more than they’d budgeted to swiftly move manufacturing and materials to countries with lower tariff rates.
Others had to cut orders for fear of not having enough cash to pay the levies when their inventory arrived in the U.S.
Claire’s, the mall chain known for its teen and tween accessories, filed for Chapter 11 bankruptcy in August and has moved to shutter hundreds of stores. It, too, faced tariff headwinds, with the majority of its products — including earrings, headbands and key chains — coming from China, Cambodia and Indonesia. In September, a private holding company acquired the chain’s North American operations for $140 million and said it would keep as many as 950 stores, or nearly 80 percent of the chain’s U.S. and Canadian locations.
Meanwhile, specialty retailers have been struggling for years to keep up with big box chains and online marketplaces as consumers look for convenience and a one-stop-shop for certain items. Fabric and craft chain Joann, for example, went out of business early this year, unable to keep up with online retailers offering lower prices.
Martin-Schoenberger, the KPMG economist, said the bankruptcies reflect contradictions in the economy. Government data released Tuesday showed the U.S. economy grew at the fastest pace in two years from July through September, with an annualized rate of 4.3 percent.
Still, economists caution that this growth is driven by more affluent consumers and corporate spending around artificial intelligence.
“We have an economy that looks strong on paper, but that might not necessarily be reflected in every single industry,” Martin-Schoenberger said.
Federica Cocco and Razzan Nakhlawi contributed to this repor
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