Key Survey Points

  • Tariffs at their highest levels since the 1930s have forced 66% of U.S. companies to pass up to 50% of costs onto consumers; 71% of businesses expect to raise prices by up to 15% in the next six months. This conclusion comes from a survey recently released by KPMG.
  • Since President Trump announced sweeping import tariffs on April 2,39% of companies have seen their gross margins decline, and 44% of surveyed companies expect gross margins to continue falling over the next year. 62% of businesses have streamlined their supply chains since the tariffs were implemented.
  • "Despite companies' efforts to optimize supply chains, profit declines caused by tariff hikes are persisting," said Brian Higgins, KPMG's U.S. Industrial Manufacturing leader, ina statement. "Uncertainty has not subsided," he said, noting that 40% of companies have paused hiring due to the unclear tariff outlook.

In-Depth Analysis

The Trump administration's tariff policies are expected to reduce economic growth this year by0.5 percentage points, and by another 0.4 percentage points in 2026—according to forecasts from the Yale Budget Lab.

The Yale Budget Lab notes that in the long run, annual U.S. economic output will be about 0.4% lower than in a no-tariff scenario, equivalent to a loss of $125 billion in 2024 dollars.

As of September 26, the effective tariff rate faced by consumers is 17.9%, which will push prices up by 1.7% this year and reduce the average annual income of U.S. households by $2,400. In the long run, prices for clothing and leather goods will be 11% and 12% higher, respectively, than in a no-tariff scenario.

The Trump administration has previously stated that tariffs have not pushed up prices, claiming that any price increases would be temporary.

However, Federal Reserve Governor Stephen Miran said on September 22 that many economistshave overestimated the risk of tariffs intensifying price pressures。

Miran took leave from his role as Trump's top economic adviser last month to complete his final four months as a central bank governor, a term that ends in January.

"The relatively small changes in prices for some goods have triggered a level of concern that I believe is unwarranted," he said at an event at the Economic Club of New York.

Federal Reserve Chair Jerome Powell and other policymakers have said tariffs could temporarily push up prices, but have also warned that the central bank must ensure import tariffs do not trigger a resurgence of inflation.

New York Fed President John Williams said last week that the impact of tariffs on prices has so far been lower than expected. He cited estimates showing that import tariffs have raised prices by about0.3 to 0.4 percentage points。

"Beyond goods affected by tariffs, underlying inflation continues to ease, but very slowly," he said, adding that "it is difficult to know exactly how tariffs affect goods and services."

KPMG said 63% of U.S. companies are considering reshoring operations to the U.S. to avoid tariffs, but only 10% of surveyed companies have taken actual action. Rising labor costs, increased operating costs, and capital investment needs are hindering such moves.

Facing tariff uncertainty, about one-third of companies have cut 1% to 5% of their workforce, while another 15% of surveyed companies reported layoffs of 6% to 10%, KPMG said.

KPMG also found that only 23% of companies believe tariff policy will remain stable, while 44% are skeptical or only moderately confident that tariffs will stay at current levels.

The survey covered 300 executives from companies with annual revenue of at least $1 billion, with respondents from nine industries including healthcare, technology, retail, and life sciences.