KPMG Tariff Survey: Businesses Navigate Declining Margins as 55% Plan Further Price Increases

One year after the imposition of significant U.S. tariffs reshaped global trade, new KPMG research stretching across a year of survey data finds U.S. businesses are adjusting to a challenging economic landscape marked by falling margins and rising operational costs. The survey shows a decisive, though slow, shift among businesses from evaluating to actively executing on supply chain changes, including reshoring manufacturing to the United States.

Consumers Face Continued Price Increases

Drawing on data from a survey of business leaders in Q2 2026, as well as two previous surveys fielded in May and September 2025, KPMG’s study has tracked consistently rising prices over the past year. The share of businesses passing on more than half of tariff costs has risen to 34 percent, more than doubling from 13 percent in May of last year. Further price increases appear imminent, with 55 percent of executives planning to raise prices by up to 15 percent within the next six months.

“The burden of tariffs has now moved squarely onto the consumer,” said Brian Higgins, US Sector Leader for Industrial Manufacturing, KPMG US. “While businesses absorbed the initial shock to their margins, the overwhelming majority are now reshaping their pricing models for a trade environment where cost pressures are the new constant.”

Job Losses Slow, While High Labor Costs Remain a Barrier

The outlook for jobs is looking up slightly as hiring cuts have eased by 11 percentage points while hiring has risen by a similar percentage. Overall, while companies have consistently cited high labor costs as one of the biggest hurdles to reshoring, a third of companies reported hiring for specialized roles that could handle tariff complexity (up from 22% in September), and 44% also invested in automated systems that resulted in little to no job increase (up from 38%). Some in-demand job skills remain difficult to find: particularly advanced manufacturing and production skills and supply chain and logistics management.  

Trade Landscape Remains Challenging, Impacting Sales

The international trade environment continues to create headwinds for U.S. businesses. A striking 82 percent of companies report a decline in foreign sales, and 61 percent now also see a drop in domestic sales. While Europe, Canada, and Mexico remain the top export markets, sourcing costs have risen by more than 25%.

"In the face of continued trade uncertainty, leaders are making the hard decisions to move from defense to offense by redesigning their global supply chains, said Scott Rankin, Advisory Products Line of Business Leader, KPMG US. “The clear takeaway for every CEO is that supply chain resilience is no longer optional—it’s a competitive advantage you have to invest in today to win tomorrow."

Businesses Look to Long Term Strategy with U.S. Reshoring

The survey data shows a directional shift toward bringing operations back to the U.S. The percentage of companies in the formal planning or active execution stages of reshoring has climbed to 26 percent, up from just 10 percent six months ago. However, executives see this as a long-term play, with 60 percent stating it would take one to three years to fully reshore their operations. Significant barriers remain, including high U.S. labor costs, the need for major capital investment, the complexity of unwinding deeply integrated global supply chains, and ongoing trade policy uncertainty.

Optimism Tempered by Cautious Action Post-SCOTUS Ruling

In a follow up survey of a subset of the same respondents fielded immediately post ruling, data showed a significant surge in business optimism following the Supreme Court’s decision to invalidate IEEPA as a basis for tariffs. Following the decision, the share of executives expecting a margin increase in the next 12 months jumped to 44 percent, up from just 7 percent last September. However, half of all leaders still report low confidence in executing their investment plans and strategy, highlighting persistent uncertainty. In response, businesses are prioritizing investments in their existing U.S. operations (53%) and accelerating reshoring plans over the next two to three years (39%), signaling a cautious but deliberate move to strengthen domestic supply chains.

“Ultimately, agility is the key to navigating this landscape,” said Andrew Siciliano, Global Trade & Customs Services Leader, KPMG LLP. “The focus is shifting from simply reacting to tariff announcements to proactively building more resilient, flexible supply chains. While challenging, strategic investments in technology and trade expertise are necessary for long-term stability and competitiveness in this new era of global trade.”

Fielded in February and March 2026, the survey captured perspectives from 300 U.S. C-suite leaders (from organizations with $1B+ annual revenue) regarding the one-year business impact of tariffs and sentiment following a recent Supreme Court ruling.The survey builds on comparative data from KPMG’s previous Tariff Pulse Survey fielded in May and September 2025, allowing for trend analysis.