Effects of tariffs on SEC quarterly disclosures

This article was originally published based on an analysis of Form 10-Q filings for the period April 1, 2025 through June 2, 2025 (‘Q1’) and was subsequently updated to include filings through August 31, 2025 (‘Q2’). We have now further extended our analysis to include Form 10-Q filings through November 30, 2025 (‘Q3’), allowing us to continue observing how disclosure practices are evolving as tariff and trade policy developments mature.

The evolving US tariff and trade policy, including any associated retaliatory tariffs, continue to present challenges to SEC registrants, affecting their business operations and financial condition.

When the effects from tariff and trade policy – e.g. supply chain disruptions, increased costs, price fluctuations and shifts in market demand – are material or are reasonably likely to become material to a registrant, disclosure of such effects may be necessary to support investors’ decision-making needs. Increasingly, material or reasonably likely material effects are beginning to arise for many registrants across industries, signaling the need for affected registrants to provide timely, sufficient and accurate information to investors while also acknowledging the uncertainty they are facing.

We explore how registrants are navigating these challenges in their recent Form 10-Q filings, some of the associated disclosure obligations SEC registrants should be aware of, and some of the common disclosure themes beginning to emerge.

An analysis of Form 10-Q filings from April through November 2025 revealed a sharp increase in public disclosure around tariffs and trade policy compared to previous years. Out of approximately 1,300 Form 10-Q reports from Fortune 500 SEC registrants analyzed, about 90% mentioned tariff- and trade-related concerns, nearly doubling the number of reports referring to such matters for the same period in the previous year.

Overall, our Q3 analysis continued to show a trend toward more quantified and operationally focused disclosures regarding tariffs and trade policy, as compared to our Q1 analysis. More companies are moving beyond high-level qualitative disclosure and are increasingly providing investors with more substantive information about the financial and operational effects of tariffs, as well as the specific strategies they are using. However, while more substantive information is making its way into the disclosures, the level of detail included appears to have remained the same as compared to our Q2 analysis.

Nearly all the tariff- and trade-related matters in registrants’ quarterly filings were presented in one of the sections outlined below. These sections do not represent a complete list of sections that may be affected or required. For example, a registrant that mitigates some of its exposure to changing tariffs by relocating a portion of its manufacturing facilities would need to disclose this relocation in the Properties section of their Form 10-K filing if it is deemed material, which is not included in the listing below.

KPMG Observation: Assessing the risks and related effects of tariffs and changing trade policies will be a facts-and-circumstances-based analysis. Registrants are encouraged to provide disclosures that are specific to the business and provide investors the ability to evaluate the current and expected effect of tariffs ‘through the eyes of management’.

Click on the dropdowns below to learn about SEC quarterly disclosure obligations and current tariff and trade policy disclosure trends of SEC registrants.

Financial Statements

Various financial reporting implications can arise due to the complexities associated with the evolving tariff and trade policy, potentially affecting multiple areas of financial reporting. We summarize key areas of financial reporting that can be susceptible to economic uncertainty, including the effects of tariff and trade policy here.

KPMG observation: While disclosures about tariff and trade policy effects are common in recent Form 10-Q reports, most substantive disclosures continue to be made outside the financial statements or notes to the financial statements. When the effects are discussed in the financial statements or their notes, they are typically in the context of uncertainties associated with estimated financial information – e.g. increased estimation uncertainty that arises in a bank’s allowance for loan losses.

This trend continues in Q3, while most disclosures remain outside the financial statements and the notes to the financial statements, more companies incorporating the impacts of tariffs in their impairment analyses and economic forecasting is a growing trend. For example, companies are explicitly citing tariffs as a factor in their goodwill and intangible asset impairment assessments. Although this practice is not yet universal, the trend is becoming more concrete.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

In Management's Discussion and Analysis (MD&A), a registrant is required to discuss its financial condition, changes in financial condition and results of operations. This section of a registrant’s filing is critical for investors seeking insight into future performance and strategic planning.

In MD&A, a registrant is required to disclose information about:

uncertainties that will – or are reasonably likely to – result in its liquidity increasing or decreasing in any material way;
any known material trends, favorable or unfavorable, in its capital resources;
significant economic changes that materially affected the amount of reported income from continuing operations; or
known trends or uncertainties that have had – or it reasonably expects will have – a material favorable or unfavorable effect on net sales, revenues or income from continuing operations.

KPMG observation: Given the economic uncertainty that changes to tariff and trade policy brings, it is not surprising that approximately 75% of Form 10-Q filings we examined continue to refer to evolving tariff and trade policy in the MD&A section.

Consistent with our Q2 analysis, registrants in Q3 are not just acknowledging potential future impacts but are actively reporting on the actual, material effects tariffs are having on their financial results. The trend of providing quantified impacts has continued, with many companies detailing the specific effects of tariffs on revenue, cost of sales and/or gross margin.

Furthermore, the discussion around mitigation strategies has continued to evolve and mature. More affected companies are beginning to provide detail on their mitigation efforts, such as specific actions taken to reconfigure supply chains, the progress of supplier diversification, and the direct impact of pricing actions intended to offset tariff-related cost increases.

Quantitative and Qualitative Disclosures About Market Risk

The SEC’s disclosure requirements for this section of the Form 10-Q mandate that a registrant disclose the reasons for any material quantitative and qualitative changes in market risk exposures and how the registrant manages these risks.

The quantitative aspect of this obligation requires a registrant to provide detailed information on market risk factors, which can include fluctuations in interest rates, currency exchange rates, commodity prices, and other financial variables that may affect the registrant’s financial outlook.

In addition to numerical data, a registrant is required to discuss any significant shifts in its market risk exposure compared to the previous fiscal year. This involves explaining the underlying reasons for these changes, whether due to strategic decisions, changes in the economic environment, or adjustments in its risk management approach.

KPMG observation: Consistent with our prior observations, it remains uncommon for registrants to include substantive, quantified disclosures about tariff impacts in this section of their Form 10-Q filings. For the most part, disclosures in this section continue to be high-level and qualitative, referring to tariffs as one of many potential macroeconomic risks.

Risk Factors

In this section of the Form 10-Q filing, a registrant is required to discuss the most significant factors that make an investment in it or its offering speculative or risky. This includes providing a description of material risks that could potentially affect its operations and financial results.

Risk factors are required to be specific and related to matters that directly affect the registrant. Risk factors can relate to a wide array of uncertainties, from market volatility and regulatory changes to operational challenges and geopolitical tensions.

A registrant is also required to disclose any new risks or material changes to the risks previously disclosed in its last annual report (Form 10-K) or quarterly filing.

KPMG observation: As US tariff and trade policy evolves, a registrant's exposure to macroeconomic effects can significantly change. This recognition remains evident in Form 10-Q filings.

While the disclosure themes in this section of filings remain the same – i.e. uncertainty, regulatory compliance, supply chain risks, and adaptation strategies concerning changing tariff and trade policy risks - the shift we observed in Q2 (from discussing potential uncertainty to highlighting current, actual effects) has continued to mature in Q3.

Our Q3 analysis shows that some affected companies are providing direct and specific language linking tariffs to outcomes. Disclosures more frequently and explicitly state that tariffs have resulted in or are expected to result in increased costs, reduced profitability and ongoing supply chain disruptions. Furthermore, some companies are elaborating on the secondary effects of these risks, such as the challenges of passing costs to customers and the potential for tariffs to impact overall demand and economic growth, thereby affecting future results.

SEC staff guidance has emphasized that a registrant’s disclosures should be updated timely as facts and circumstances and the effect of matters, like tariffs, evolve. Generic or boilerplate disclosures should also be avoided.

While common disclosure themes have emerged, these may change over time as registrants look to ensure their disclosures remain informative and useful to investors. Click on the dropdowns below to learn more about these common disclosure themes.

Economic uncertainty and risk mitigation

This remains the most common and foundational theme discussed in the Form 10-Q filings we analyzed. Registrants continue to acknowledge the broad economic uncertainty stemming from evolving tariff and trade policies.

The trend we noted in Q2 (companies quantifying, modeling, and embedding tariff risk into their financial processes) has continued to mature in Q3.

Some of the prevalent mitigation strategies discussed in Q3 filings involve:

Pricing and commercial actions: Companies are either considering or actively adjusting prices to pass on increased tariff-related costs to customers.
Supply chain restructuring: Some registrants are providing high-level details on their efforts to reconfigure their supply chains, including identifying alternative suppliers and shifting sourcing to different countries.

Increased costs and financial impacts

The shift toward quantified disclosures that we observed in Q2 has continued in Q3. The discussion has continued to move beyond simply stating that tariffs could have an impact or simply that they do have an impact; companies are providing specific, quantified data-driven disclosures on how tariff and trade policy developments have directly affected key financial metrics.

While the Q2 analysis showed companies were beginning to provide this data, our Q3 analysis reveals that this is now a more mature reporting practice for affected registrants. The cautionary statements about future impacts remain, but they are increasingly being coupled with quantifiable impacts.

Across filings, registrants are also highlighting how tariffs are contributing to higher input costs, supply chain expenses and operational challenges, with some noting that these effects are already material to their financial results. At the same time, a number of registrants continue to caution that while current-period effects may be limited, the evolving tariff environment is expected to drive further cost increases and financial pressures in future periods.

Operational challenges and supply chain disruptions

Disruptions in supply chains are a recurring theme. Registrants are acknowledging material effects to their supply chain and future effects that are reasonably likely to occur. In addition to acknowledging these current and future effects, some discuss how they are trying to mitigate current or anticipated supply chain disruptions – e.g. increasing inventory storage in countries that are subject to more favorable tariff and trade policies and considering alternative sourcing.

Strategic planning and adaptation

Registrants are outlining strategic initiatives to try to adapt to the evolving tariff and trade policy. Some examples include disclosures about efforts to diversify suppliers and modify business models to reduce exposure to tariffs.

In more recent quarters, disclosures about strategic adaptation responses are more specific. For example, companies are discussing supply chain reconfiguration, price increases and sourcing shifts.

Regulatory compliance

Highlighting the increasing compliance costs and regulatory challenges remains a consistent theme. The emphasis we noted in Q2 on the difficulty of keeping up with rapidly changing regulations continues to be a primary concern for registrants.

Our Q3 analysis reveals that some companies are also acknowledging the complexity and uncertainty of interpreting and applying the rules. Companies are beginning to express concern not just about the pace of change, but about the ambiguity of the regulations themselves.

Some disclosures are beginning to highlight the risk of future adverse findings, such as customs audits or challenges to the classification of goods, which could result in retroactive tariff assessments, penalties or fines.

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Erin McCloskey

Partner, Dept. of Professional Practice, KPMG US

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Bryce Ehrhardt

Managing Director, Dept. of Professional Practice, KPMG LLP

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Erin McCloskey

Partner, Dept. of Professional Practice, KPMG US

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Bryce Ehrhardt

Managing Director, Dept. of Professional Practice, KPMG LLP

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Relevant Results

December update

Disclosures associated with tariff and trade policy are increasing

Financial Statements

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Quantitative and Qualitative Disclosures About Market Risk

Risk Factors

Common disclosure themes

Economic uncertainty and risk mitigation

Increased costs and financial impacts

Operational challenges and supply chain disruptions

Strategic planning and adaptation

Regulatory compliance

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