KPMG 2026 Tariff Survey
One year into tariffs, U.S. businesses navigate declining margins as 55% plan further price increases
One year after the imposition of significant U.S. tariffs reshaped global trade, new KPMG research finds U.S. businesses adjusting to a more complex, higher cost operating environment. Results from the KPMG 2026 Tariff Survey — building on prior survey waves from May and September 2025 — show persistent margin pressure, continued reliance on price increases, and a gradual shift from tariff defense toward longer term structural change.
While the Supreme Court’s recent ruling has improved near term sentiment, most organizations remain cautious, prioritizing resilience, selective investment, and deliberate reshoring strategies in the face of ongoing policy and cost uncertainty.
Consumers face continued price increases as tariff costs shift downstream
Tariff driven cost pressure has increasingly moved from corporate balance sheets to consumers. Over the past year, the share of organizations passing through more than half of tariff related costs to customers has risen sharply — from 13% in May 2025 to 34% in February 2026. At the same time, fewer organizations are absorbing tariffs internally, signaling a structural shift in pricing behavior.
Looking ahead, price escalation is far from over. Fifty five percent of executives plan additional price increases of up to 15% within the next six months, reinforcing that tariffs are now embedded in standard pricing models rather than treated as a temporary disruption.
The burden of tariffs has now moved squarely onto the consumer. While businesses absorbed the initial shock to their margins early on, the overwhelming majority are now recalibrating pricing strategies for a trade environment where cost pressure is the new constant.
Brian Higgins
U.S. Sector Leader, Industrial Manufacturing, KPMG US
Rising tariff cost pass through to customers
Margin pressure persists — but expectations begin to stabilize
Tariffs continue to weigh heavily on profitability. Seventy eight percent of organizations report higher cost of goods sold (COGS) in their most recent fiscal quarter, with over half experiencing increases of 1–5 percentage points. As a result, 51% of respondents report current margin declines, most commonly in the 1–20% range.
However, forward looking expectations suggest a modest easing. The share of leaders expecting margin declines over the next 12 months falls to 43%, reflecting cautious optimism that organizations are beginning to adapt their cost structures and operating models, even as uncertainty remains elevated.
Trade uncertainty continues to weigh on sales and investment
Despite targeted mitigation efforts, the global trade environment remains a headwind. Eighty two percent of organizations report declining foreign sales, and 61% report domestic sales declines. Europe, Canada, and Mexico remain the top export destinations (Slide 15), yet retaliatory tariffs and sourcing cost inflation — often exceeding 26% increases — continue to suppress demand and margins.
Tariff uncertainty is also reshaping capital allocation. While outright cancellations remain limited, 68% of organizations report delaying or postponing investments, most commonly by up to 12 months. Instead of large scale expansion, leaders are favoring smaller, more flexible investments while reassessing risk and return thresholds.
Leaders are increasingly moving from defense to offense — redesigning global supply chains to compete in a world where resilience matters as much as cost.
Scott Rankin
Advisory Products Line of Business Leader, KPMG US
Job losses slow as companies rebalance through reskilling and automation
Labor impacts from tariffs have begun to moderate. Compared with late 2025, the share of organizations reporting job reductions has fallen by 11 percentage points, while 27% now report increases in hiring. However, this hiring is highly targeted rather than broad based.
To manage higher labor costs — a leading barrier to reshoring — organizations are leaning on two parallel strategies:
- 31% hired specialized roles focused on tariff, trade, and compliance complexity (up from 22% in September 2025)
- 44% invested in automation, resulting in little or no net job growth
At the same time, persistent talent shortages remain, particularly in advanced manufacturing, supply chain and logistics, and technical production skills.
How organizations are managing workforce impact: Automation and specialized hiring
Reshoring accelerates — but remains a long term commitment
Tariffs are increasingly driving structural supply chain change. The share of organizations in formal planning or active execution of reshoring has climbed to 26%, up from just 10% six months earlier. Meanwhile, early stage discussions have declined sharply, signaling a shift from exploration to action.
Despite this momentum, reshoring is not a near term fix. Sixty percent of respondents say it would take one to three years to fully reshore operations, citing high U.S. labor costs, capital intensity, and deeply integrated global supply chains as the top constraints.
State and local incentives are emerging as an important enabler — nearly half of respondents say incentives would strongly influence reshoring decisions, and 68% would reconsider reshoring if incentives were significant.
Reshoring momentum: From evaluation to execution
Post SCOTUS ruling: optimism rises, caution remains
The Supreme Court’s decision to invalidate IEEPA as a basis for tariffs sparked an immediate shift in sentiment. In a follow up survey conducted post ruling, the share of executives expecting margin improvement over the next 12 months jumped to 44%, up from 7% in September 2025.
Even so, confidence in execution lags optimism. Half of leaders still report low confidence in executing investment plans or strategy, underscoring continued uncertainty around policy durability and operational follow through. As a result, organizations are prioritizing:
- Investments in existing U.S. operations (53%)
- Accelerated reshoring over the next 2–3 years (39%)
Agility is now the defining advantage. Organizations are shifting from reacting to tariff announcements toward building resilient, flexible supply chains that can withstand ongoing volatility.
Andrew Siciliano
Global Trade & Customs Services Leader, KPMG LLP
What this means for business leaders
Findings from the KPMG 2026 Tariff Survey point to a clear inflection:
- Pricing pressure is structural, not temporary
- Resilience has become a competitive differentiator, not a defensive measure
- Reshoring is progressing, but requires sustained investment, incentives, and workforce transformation
Leaders that proactively redesign supply chains, pricing strategies, and talent models will be better positioned to compete — regardless of how trade policy evolves next.
About the survey
Fielded in February and March 2026, the survey captured perspectives from 300 U.S. C suite leaders at organizations with $1B+ in annual revenue. The study builds on the KPMG Tariff Pulse Surveys conducted in May and September 2025, enabling year over year trend analysis. A targeted follow up survey was conducted post Supreme Court ruling to assess changes in sentiment and outlook.
Dive into our thinking:
Tariff Survey - One Year Later
Download PDFTariff 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.
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