What's happened
A recent survey reveals that 54% of US companies plan to raise prices due to tariffs imposed by the Trump administration. The tariffs, affecting imports from various countries, have led to decreased confidence among exporters and expectations of inflation among consumers. The situation is evolving as companies adapt to the new trade landscape.
What's behind the headline?
Key Insights
- Price Increases Expected: A majority of companies (54%) anticipate raising prices to offset tariff costs, with only 22% able to absorb these increases.
- Impact on Exporters: 42% of exporting firms expect turnover declines of 2-10% over the next year, a stark contrast to pre-tariff expectations.
- Consumer Inflation Concerns: Consumer inflation expectations have surged, reaching levels not seen since 1981, indicating a broader economic impact.
- Stockpiling Strategies: Many companies have stockpiled goods to mitigate immediate tariff impacts, but this is a temporary solution.
- Long-term Effects: If tariffs remain, companies will likely pass on costs to consumers, leading to sustained price increases in the summer months.
- Geopolitical Risks: Over half of surveyed firms view geopolitical risks as a significant threat, prompting shifts in supply chains and sourcing strategies.
What the papers say
According to Lauren Aratani in The Guardian, 'More than half (54%) of the US companies surveyed... said they will have to raise prices to accommodate the cost of the tariffs.' This sentiment is echoed by the South China Morning Post, which notes that 'few companies intend to absorb increased costs or cut export prices to maintain market share.' The Allianz survey highlights a growing trend among firms to diversify supply chains in response to tariff pressures, with 45% of Chinese firms also planning price hikes. Doug McMillon, CEO of Walmart, stated, 'Given the magnitude of the tariffs... we aren’t able to absorb all the pressure.' This indicates a widespread expectation of higher consumer prices as companies adjust to the new trade environment.
How we got here
The tariffs were introduced following Trump's announcement on April 2, 2025, which aimed to reshape US trade policy. This has resulted in significant uncertainty for businesses, particularly exporters, who are now facing increased costs and potential declines in turnover.
Go deeper
- What specific tariffs are affecting US companies?
- How are consumers reacting to potential price increases?
- What strategies are companies using to cope with tariffs?
Common question
-
What is the Current Status of Trump's Trade War?
As of May 2025, the trade war initiated by President Trump has reached a temporary ceasefire with China, but the underlying issues remain unresolved. This situation raises numerous questions about the future of U.S. trade policies, the economic landscape, and how businesses are adapting to these changes. Below, we explore key questions surrounding this complex topic.
More on these topics
-
The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.
-
China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.
-
Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
-
Allianz SE is a German multinational financial services company headquartered in Munich, Germany. Its core businesses are insurance and asset management.
-
Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores, headquartered in Bentonville, Arkansas.