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By Hugh Cameron
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A majority of American businesses intend to or have already raised their prices, while also implementing other company-wide adjustments, in order to cope with the impact of President Donald Trump’s tariffs on their operations.
In a recent survey of senior executives by KPMG LLP, the U.S. firm of KPMG International, 44 percent of those polled said they have already increased prices as a result of tariffs. Two-thirds report having passed on up to 50 percent of these costs to their consumers, and 21 percent have passed on over half, up from 13 percent in July.
Further increases are expected, with 42 percent anticipating price increases of up to 5 percent, and an additional 29 percent predicting hikes of between 6 and 15 percent over the next six months.
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Newsweek reached out to the Commerce Department via email for comment.
Why It Matters
Several of America’s largest retailers, including Walmart and Dollar General, have announced their intention to raise prices to mitigate the impact of the new import duties on their margins. Certain surveys indicate that American consumers have begun to notice these increases and attribute them largely to the administration’s trade policies.
However, the administration has maintained that the price impacts of tariffs will be minimal and that these are necessary to balance global trade and reshore manufacturing in the United States, while also generating billions of dollars in revenue for the federal government. The White House has also responded to businesses that plan on raising prices, urging them to absorb as many tariff-related costs as possible before passing these on to customers.
What To Know
In addition to planned price increases, KPMG’s September survey revealed that 39 percent of businesses have reported thinning margins as a result of tariffs, with 44 percent expecting this trend to continue into next year.
The current tariff environment has also led to 60 percent of businesses reporting decreased sales in foreign markets. However, only 22 percent now report a drop of 16 to 25 percent, compared to 27 percent in July.
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Timothy Walsh, Chair and CEO of KPMG LLP, told Fortune that 89 percent of American CEOs believe tariffs will “significantly impact” their business over the next three years, and that 86 percent will raise prices in response. Adding to the difficulties stemming from those that have been implemented, Walsh said, is the “the uncertainty around whether those tariffs will continue to change.”
As a result of this uncertainty, nearly 40 percent of respondents in KPMG’s September survey report having paused hiring. A third say they have reduced their U.S. workforce by 1 to 5 percent, while 15 percent have cut jobs by between 6 and 10 percent.
However, 13 percent say they have created new jobs by shifting some of their production practices to the U.S. Some 63 percent are currently considering reshoring their operations to the U.S. in an attempt to escape the effects of tariffs, though only 10 percent have taken steps to do so. The main obstacles to this change, they said, include higher labor costs and operating expenses, as well as the required capital investment.
“Reshoring is a timely and costly effort,” said James Gellert, executive chair at financial analytics firm RapidRatings. “It may cost more in the end to shift operations completely domestically—scaling infrastructure, performing due diligence on new suppliers, developing an entire new workforce—than just absorbing potential tariff impact.”
Gellert told Newsweek that the rate at which tariffs are expected to “settle” is around 15 percent, which he describes as “manageable, though painful.” He added that few companies would be willing to “reengineer their supply chains” to skirt this, and that doing so may result in price increases regardless.
Commenting on this reluctance, as well as businesses' readiness to implement pricing actions, Joe Lackner, leader of KPMG’s Industrial Manufacturing team, said: “Businesses are making strategic changes that can have immediate impact instead of major, structural changes that would require time and capital investments.”
What People Are Saying
KPMG LLP CEO Timothy Walsh told Fortune: “The CEOs I speak with are addressing tariff impacts in three areas: cost take-out, supply chain optimization including reshoring, onshoring considerations, and ultimately pricing.”
Andrew Siciliano, the Global Practice Leader for Trade & Customs at KPMG LLP, told Newsweek: “Our data indicates that tariffs have been a key factor in many companies’ decisions to reevaluate their pricing strategies. In some cases, tariffs have increased costs for imported goods and components, prompting businesses to pass those costs onto consumers. However, in other cases, prices may rise slightly, or not at all, due to price elasticity, re-negotiated prices with overseas suppliers, availability of comparable products from low tariffed countries and other market factors. Ultimately, while tariffs might be a driver of higher prices for some, it’s important to note that they are not always the sole reason for broader pricing decisions.”
RapidRatings Executive Chair James Gellert told Newsweek: “Tariffs, even in this state of flux, have cost many companies real dollars. Despite administration assertions that selling countries pay tariffs, it’s categorically the importing U.S. company that pays. These costs need to be absorbed, passed along, or some of both. Not all companies are able to pass costs through entirely to their customers, but many try. For sure there are companies using tariffs as an excuse to raise prices, but most are transparent with their key customers and communicate the reality of their conundrums.”
Eli Moyal, COO and founder of home renovation firm Chapter, told Newsweek: “Many companies are raising prices, but the reality is more nuanced. In home renovation, demand has already softened due to slower home sales, so most firms are trying to absorb as much of the cost increase as possible to stay competitive and win projects."
“The supply chain still tries to distribute the impact, so clients usually see smaller adjustments rather than the full tariff amount,” he added. “At the same time, domestic manufacturers see tariffs as an opportunity to raise prices slightly while still remaining competitive against imports that just became 50 percent more expensive.”
What Happens Next
As well as raising prices and considering reshoring to the U.S., KPMG's survey found that companies are taking a number of other steps to mitigate their “tariff exposure,” including “restructuring supply chains for tax efficiencies” and accelerating their move toward automation.
Update 10/7/25, 1:01 p.m. ET: This article was updated with comment from Andrew Siciliano.
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