More than half of U.S. companies are already seeing reduced margins and disrupted international sales as tariffs take a lasting toll, according to KPMG’s latest Tariff Pulse Survey. Of the 300 executives surveyed, 57% reported shrinking gross margins due to tariff impacts, with nearly a quarter citing margin drops exceeding 6–10%. International sales are also under pressure—83% of companies say Chinese demand has declined due to retaliatory tariffs. In response, many firms are using mitigation strategies like customs valuation, duty deferment, and supplier renegotiations to protect profitability. Reshoring efforts are also underway, although they come with higher costs and implementation timelines of up to a year.
Despite growing cost pressures, only 14% of companies plan to cut headcount. Instead, many are investing in automation, predictive analytics, and scheduling tools to manage operational challenges. Over two-thirds are already using data to model price changes and customer behavior, with 83% planning price hikes within the next six months. While customer resistance has been limited so far, a third of companies report early signs of pushback. Capital investment is also slowing down, with more than half of companies delaying major projects by up to a year as they reevaluate long-term strategy. For entrepreneurs, this data signals a critical time to scrutinize supplier relationships, technology upgrades, and pricing models to stay competitive amid ongoing trade uncertainty.
