Corporate bankruptcies surged in 2025, climbing to levels not seen since the aftermath of the Great Recession, as companies struggled to absorb inflation, rising interest rates, and the highest tariffs in decades, The Washington Post reports.

“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.”

At least 717 companies filed for bankruptcy through November, according to S&P Global Market Intelligence — about 14% more than during the same period in 2024 and the highest total since 2010.

Notably, the wave included a sharp rise in “mega bankruptcies,” filings by companies with $1 billion or more in assets, underscoring the scale of the financial stress rippling through corporate America.

Businesses in vulnerable sectors found themselves squeezed between rising tariffs and inflation-weary consumers, particularly firms dependent on imported goods.

Many companies cited higher costs tied to inflation and interest rates, along with Trump administration trade policies that disrupted supply chains and pushed up expenses.

The surge in filings marked a shift from prior years. Industrials — including manufacturing, construction, transportation, and logistics firms — saw the most pronounced increase, a sector President Donald Trump has long argued would benefit from aggressive tariff policies. Instead, federal data show manufacturing lost more than 70,000 jobs in the year ending in November.

Consumer-facing companies selling discretionary goods made up the second-largest group of bankruptcies, signaling that households are pulling back on nonessential spending.

Retailers and lifestyle brands, which often top bankruptcy lists, were hit as shoppers prioritized groceries, rent, and utilities over fashion, furniture, and accessories.

The S&P data includes both Chapter 11 reorganizations, where companies restructure while continuing operations, and Chapter 7 liquidations, which involve shutting down and selling off assets.

While inflation has cooled — prices rose at an annual rate of 2.7% in November — economists say many businesses are still absorbing higher costs rather than risk losing customers.

That dynamic has accelerated what some describe as a “culling of the herd,” with weaker companies unable to survive.

Retailers have felt the strain especially hard. One estimate suggests tariffs could cost Americans an additional $1,800 a year, further eroding demand for discretionary products such as jewelry, crafts, and home furnishings.

“Those with pricing power will pass on the costs over time,” Sonnenfeld said. “Others will fold.”

According to Cornerstone Research, 17 mega bankruptcies occurred between January and June, the highest half-year total since the COVID-19 shock in 2020. Consumer discretionary companies, including retailers At Home and Forever 21, accounted for several of those filings.

Matt Osborn, a principal at Cornerstone, said large companies pointed to persistent inflation, elevated interest rates, and shifting federal policies — including trade and renewable energy rules — as barriers to raising capital and sustaining demand.

Among industrials, bankruptcies spanned manufacturers, suppliers, transportation firms, and renewable energy companies. Some had longstanding issues, but tariffs often compounded existing weaknesses.

Residential solar company PosiGen, for example, filed for Chapter 11 citing reduced federal incentives and steep tariffs on imported materials.

The effective tariff rate on imported solar cells and panels climbed to about 20% after May 2025, up from less than 5% in prior years, according to federal data analyzed by Michigan State University professor Jason Miller.

“That places a lot of strain on cash flow, especially for smaller importers,” Miller said. “Combine that with reduced incentives, and you have a perfect storm.”

Transportation and aviation firms also landed in bankruptcy court. Nikola Corp., an electric-truck maker, filed for Chapter 11 in February after costly recalls and regulatory penalties. Spirit Airlines sought bankruptcy protection in August, while private jet operator Verijet moved to liquidate.

Economists note that tariff exemptions have largely favored the tech sector, particularly companies tied to artificial intelligence, leaving lower-tech industries exposed.

At the same time, consumer confidence has deteriorated sharply. A University of Michigan sentiment survey fell roughly 28% year over year in November, making shoppers increasingly cautious about discretionary spending.

Frequent tariff changes during the peak holiday-ordering season further rattled businesses reliant on imports from China and Southeast Asia, forcing some to rush supply-chain shifts or cut orders altogether.

Retail chain Claire’s filed for Chapter 11 in August and began closing hundreds of stores amid tariff pressures tied to its import-heavy supply chain.

Meanwhile, specialty retailers such as Joann have collapsed under competition from online marketplaces and big-box chains.

Despite the surge in bankruptcies, the broader economy shows signs of strength. Government data released this week showed U.S. economic growth running at a 4.3% annualized pace in the third quarter — the fastest in two years.

Still, economists warn the picture is uneven.

“We have an economy that looks strong on paper,” said Meagan Martin-Schoenberger, a senior economist at KPMG, “but that strength isn’t being felt across every industry.”