One year after the Trump Administration’s “Liberation Day” tariff announcements, a KPMG survey found that U.S. businesses report margins eroding and operational costs rising, while passing on a higher share of the tariff costs to customers.

The KPMG survey of 300 U.S.-based C-suite executives from companies with $1B or more in annual revenue was conducted between February and March 2026. The survey found:

  • The share of businesses passing on more than half of tariff costs into higher prices has risen to 34 percent from 21 percent in a KPMG survey conducted in September 2025, and more than doubled from 13 percent in a May 2025 survey.
  • Forty percent of respondents indicated that they have adjusted prices for the full cost of tariffs (down from 44 percent in KPMG’s September 2025 survey); 37 percent have increased prices beyond tariff-impacted products (22 percent from the company’s September 2025 survey); and 19 percent have raised prices beyond tariff costs (10 percent from the September 2025 survey).
  • The respondents noted that further price increases appear imminent, with 73 percent planning to raise prices within the next six months, including 32 percent seeing increases up to 5 percent, 23 percent from 6 percent to 15 percent, and 11 percent from 16 percent to 25 percent.

“The burden of tariffs has now moved squarely onto the consumer,” said Brian Higgins, U.S. sector leader for Industrial Manufacturing at KPMG U.S., in a press release. “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.”

Countries Seeing Highest Sourcing Cost Increases
In the report, China was identified as the country most impacted by U.S. tariffs. Among C-suite respondents, 73 percent said the cost of sourcing in China had increased by 16 percent to 40 percent.

In both the Association of Southeast Asian Nations (ASEAN) and India, 39 percent indicated that sourcing costs have risen by 16 percent to 40 percent. Other countries notably impacted by U.S. tariffs include Mexico, where 32 percent of respondents indicated sourcing costs have risen by 16 to 40 percent; the Caribbean, 29 percent; Australia/New Zealand, 27 percent; Taiwan, 26 percent; Central America, 23 percent; and South America, 22 percent.

U.S. Tariff Impact on Sales
Asked about the impact of the current tariff environment on foreign sales, 82 percent of C-suite executives said they have decreased, 7 percent said they’ve increased, and 12 percent said they have experienced flat sales. Of those citing a decline in foreign sales, 27 percent said the decrease was between less than 5 percent, 30 percent between 6 percent and 15 percent, and 27 percent between 16 percent and 25 percent.

Asked the same question around domestic sales, 61 percent of respondents indicated that their domestic sales have decreased, versus 13 percent who have seen gains and 27 percent who have witnessed flat domestic sales.

U.S. Tariff Impact on Margins
Tariffs continue to pressure gross margins, but the executives who participated in the survey expect the intensity of margin declines to ease over the next 12 months.

Asked how tariffs have impacted their company’s gross margin (current impact and anticipated impact in the next 12 months), 33 percent of executives reported a 1 to 10 percent decline in gross margins currently, while seeing that easing slightly to 26 percent over the next 12 months. Overall, margin decreases remain more common than increases, with 51 percent reporting a decrease currently, easing to 43 percent in the next 12 months.

Margin increases remain relatively stable at 27 percent currently versus 28 percent in the future. A notable portion of respondents said margins have remained relatively unchanged (21 percent), and 29 percent expect to hold margins steady over the next 12 months.

Tariffs increased COGS (cost of goods sold) for most organizations, with 78 percent reporting an increase in the most recent fiscal quarter versus the same quarter last year. The increase was typically modest, as 51 percent reported COGS rising by 1 to 5 percentage points.

Postponed Capital Investments Due To Tariffs
This latest survey from KPMG found 68 percent of respondents had postponed major investment due to tariff uncertainty, including 48 percent by 1 to 12 months and 20 percent by 13 to 24 months. Similar findings were obtained in KPMG’s 2025 May and September surveys. Outright cancellations stay minimal, at between 1 and 5 percent.

Asked which investments have been affected, market expansion into new geographic regions (50 percent) and expansion or upgrades of manufacturing facilities (51 percent) remain the most affected investment areas according to the survey; however, the share has somewhat declined compared with earlier tariff cycles.

Investments in AI and machine learning (10 percent only) have dipped from the KPGM’s September 2025 level, indicating a pullback from discretionary and longer-term capability investments amid ongoing tariff uncertainty.

Mergers, acquisitions, and strategic partnership activities have also been impacted, with more respondents in the latest study, rising to 48 percent from 39 percent in October and 24 percent last May.

Tariff Impact Post SCOTUS Ruling
KPMG also conducted a survey of 119 of the same respondents following the Supreme Court’s February 20 ruling that President Trump’s broad tariff rates on U.S. trade partners enacted under the International Emergency Economic Powers Act, or IEEPA, were illegal. The follow-up survey, conducted between March 6 and 13, showed a significant surge in business optimism following the Supreme Court’s decision.

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 those surveyed continued to report low confidence in executing on their investment plans and strategy, highlighting persistent uncertainty.

While 62 percent of surveyed respondents expect a refund, fewer than three in 10 plan to pursue it. The primary reason was legal costs outweigh the potential refund, cited by 37 percent; followed by concern about potential negative impact on future government relations, 24 percent; the potential refund amount is not material to their business, 22 percent; and the process is expected to be too complex, 17 percent.

Asked about how the recent tariff developments and the court ruling will impact their pricing actions, 34 percent of respondents were still planning to use selective price increases to protect margins, while others were looking to narrow price hikes more directly to where costs have increased. Asked how the expected refund for past tariff payments will affect their company’s prices for relevant products, 18 percent expect a full-price reduction equal to the amount of the previously charged tariff, and a third expect a partial or selective reduction, while 24 percent indicated they will not change prices based on the refund.

Charts courtesy KPMG