Tariff Pulse Survey: U.S. Businesses Grapple with Tariff Fallout Six Months In
In the latest KPMG survey of 300 senior executives, businesses report pausing hiring and raising prices, while a significant majority begin to consider reshoring to the U.S.
The Tariff Pulse Survey reveals the profound impact tariffs are having on US businesses.
A significant 39% of companies have experienced a decrease in gross margins, with 44% expecting further declines in the coming year. This financial strain is compounded by a substantial decline in demand, with 82% of companies reporting a change in their export strategy and most organizations reporting a drop of up to 25% in foreign sales. These trends highlight the immediate and ongoing economic pressures that tariffs are placing on US businesses.
To combat these challenges, companies are implementing a range of strategic responses. Reconfiguring supply chains is the most common approach, adopted by 62% of organizations, as they seek to reduce reliance on high-tariff regions. Accelerating automation (50%) and making tax or corporate structure changes (27%) are also prevalent strategies.
Additionally, 57% of companies have postponed or canceled capital investments, and 47% have reduced their workforces, reflecting a cautious stance in the face of economic uncertainty. Building financial resilience (51%), adjusting pricing and cost structures (58%), and implementing tariff mitigation mechanisms (44%) are other key strategies being employed to maintain profitability and operational efficiency.
Different industries are adopting these strategies with varying emphases. The retail sector is focusing heavily on adjusting pricing to mitigate risk, while the natural resources sector is more inclined to use scenario planning to navigate tariff uncertainties. The life sciences industry is particularly likely to shift manufacturing to lower-tariff regions to reduce dependency on high-tariff areas. These multi-layered strategies underscore the importance of a proactive and adaptable approach to tariff management.
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Tariff Pulse Survey: U.S. Businesses Grapple with Tariff Fallout Six Months In
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