Key Findings

  • A KPMG survey of about 300 U.S. CFOs and other executives conducted between May and June found that 57% of respondents said tariffs have squeezed gross margins, with about a quarter of respondents reporting margin declines exceeding the 6%-10% range.
  • Meanwhile, about a third of surveyed executives said their overall overseas sales have declined by 16%-25% due to retaliatory tariffs. The impact has been particularly widespread in China—about 83% of companies reported sales declines following President Trump's implementation of a series of tariffs on April 2.
  • Although many companies have begun passing some tariff costs on to customers, Joe Lackner, KPMG's industrial manufacturing advisory partner, told CFO Dive that further price increases are expected over the next six months as companies re-examine more contracts. "These things take time to sort out," Lackner said. "The next supply agreement between OEMs and their supply base will need to handle tariff pass-through differently, because it has now become a heavy burden," Lackner said in the interview.

Deeper Analysis

Although market volatility has eased as Trump has flip-flopped on tariff decisions, and some investors have begun betting on the so-called "Trump Always Cave Out" (TACO) stance, assuming he will abandon aggressive tariffs, Trump used the market's high point over the weekend to push forward with aggressive tariff policies again, according to Fortune.

On Saturday morning, Trump announced that the U.S. will impose 30% tariffs on imports from the European Union and Mexico, effective August 1. Since early March, imports from Mexico and Canada have only been subject to 25% tariffs unless they qualify for treatment under the USMCA, but whether the USMCA exemption will continue under the new rate remains unclear, as CFO Dive's sister publication Supply Chain Dive previously reported.

Lackner said the latest tariff changes over the weekend show that the stability companies seek to make capital investment decisions remains elusive. The report noted that while major supply chain adjustments could take 7 to 12 months to implement, many companies have already delayed the capital investments needed to make those adjustments by up to a year, in order to allow time and space to assess the uncertain trade environment.

The open question is how long companies can "hold steady," shelving capital investment plans while waiting for the tariff landscape to settle. "How long can you delay without damaging the business?" Lackner asked.

One employment-positive highlight in the survey results is that although companies plan to use automation and AI to manage costs and address tariff-related challenges, only 14% of companies said they plan to cut jobs.

Lackner said in a statement provided to CFO Dive that even as companies navigate a trade environment characterized by "ongoing disruption," they are still "investing in automation, rethinking supply chains, and prioritizing technology to protect margins and jobs—while preparing for long-term shifts in cost structures, sourcing strategies, and global demand dynamics."