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

Why It Matters

The findings signal a fundamental pricing shift that will affect consumer purchasing power and accelerate domestic supply‑chain investments, reshaping competitive dynamics across multiple industries.

Key Takeaways

• 34% pass over half tariff costs to customers
• 55% plan price increases up to 15% within six months
• Reshoring initiatives rise to 26%, up from 10%
• 82% see foreign sales decline since tariffs began
• Automation hiring rises; specialized talent remains scarce

Pulse Analysis

The tariff wave that began in 2025 has forced U.S. companies to re‑evaluate cost structures, with many opting to transfer a larger share of import duties to end‑users. This price‑pass‑through strategy not only squeezes consumer budgets but also erodes brand loyalty, especially in price‑sensitive sectors such as consumer electronics and automotive parts. Firms that absorb costs risk margin compression, while those that raise prices risk demand elasticity. The KPMG data suggest a tipping point: over a third of respondents now shoulder more than half of tariff expenses, and a majority anticipate double‑digit price adjustments, underscoring a broader inflationary pressure that policymakers will monitor closely.

Beyond pricing, the survey highlights a decisive shift toward reshoring and supply‑chain redesign. Companies moving from evaluation to execution reflect a growing belief that domestic production offers a hedge against trade volatility. However, high U.S. labor costs, capital intensity, and entrenched global networks remain significant barriers. To mitigate these challenges, firms are investing in automation and upskilling, aiming to offset labor shortages while maintaining competitiveness. The acceleration of reshoring—up to 26% of firms actively relocating—signals a longer‑term rebalancing of manufacturing footprints that could spur regional job growth and stimulate ancillary industries such as logistics and advanced tooling.

The recent Supreme Court decision, which invalidated many of the original tariffs, injected a dose of optimism, with 44% of executives now expecting margin improvements. Yet uncertainty persists as new global tariff proposals loom. Consequently, more than half of surveyed companies are prioritizing investments in existing U.S. operations, and nearly 40% are fast‑tracking reshoring projects over the next two to three years. This strategic pivot reflects a broader industry consensus: resilience and flexibility are now core competitive advantages, and firms that proactively build robust, domestically anchored supply chains are better positioned to navigate the evolving trade landscape.