A Year Into Tariffs, US Businesses See Declining Sales, Plan Price Increases: KPMG Survey

Why It Matters

The findings signal that tariffs are reshaping pricing strategies, supply‑chain design and domestic investment decisions, directly affecting consumer costs and corporate competitiveness in a volatile trade environment.

Key Takeaways

• 34% now pass >50% tariff costs to customers
• 55% plan price hikes up to 15% soon
• Foreign sales down up to 25% since tariffs
• Reshoring plans rose to 26% from 10%
• Margin optimism jumped to 44% after SCOTUS ruling

Pulse Analysis

The KPMG survey underscores a pivotal shift in U.S. trade dynamics, where tariffs have moved from a marginal cost factor to a core pricing driver. Companies are increasingly reluctant to absorb duties, opting instead to transfer a larger share to end‑users. This pass‑through amplifies consumer price inflation, eroding disposable income and prompting policymakers to monitor the broader macroeconomic ripple effects. For investors, the trend highlights sectors vulnerable to price elasticity, such as consumer goods and automotive, while offering opportunities for firms that can effectively manage cost structures.

Supply‑chain resilience has become a strategic imperative, as evidenced by the surge in reshoring activity. The jump from 10% to 26% of firms actively pursuing domestic production reflects both a reaction to tariff volatility and a longer‑term bet on reduced logistics risk. However, high labor costs, capital intensity, and talent shortages in advanced manufacturing temper the speed of relocation. Companies are mitigating these challenges through automation, upskilling programs, and targeted hiring for tariff‑complexity roles, signaling a broader digital transformation of the manufacturing ecosystem.

Legal uncertainty continues to shape the outlook. The Supreme Court’s partial rollback of Trump‑era tariffs sparked a brief surge in margin optimism—44% of executives now expect improved profitability—yet the subsequent 10% global tariff threat re‑introduced doubt. Executives are therefore prioritizing investments in existing U.S. operations and accelerating reshoring timelines, aiming to lock in supply‑chain stability. This cautious optimism suggests that firms with flexible, technology‑enabled networks will likely outperform peers as trade policy oscillates, making supply‑chain agility a key differentiator for future growth.