KPMG survey: Tariffs drive worries for U.S. businesses

By Karen Hanna 

Concern over myriad issues permeated results of a survey of business professionals released at the end of March by advisory and research firm KPMG LLP.

In its third survey tracking how President Trump’s tariffs have affected U.S. businesses, KPMG found anxiety over rising costs, labor and supply chain challenges.

Seventy-four percent of respondents to the “Tariff 3.0 Survey” reported a decrease of up to 25 percent in foreign sales, and 52 percent reported a decrease of up to 25 percent in domestic sales. Meanwhile, 37 percent of respondents described their organization’s overall sentiment as negative or very negative — but that segment was significantly smaller than the 53 percent who responded the same way in the previous survey, conducted in September. 

KPMG ran its latest survey between Feb. 9 and Feb. 24 — a key timeline marked by the pivotal U.S. Supreme Court decision Feb. 20 canceling tariffs Trump imposed under the International Emergency Economic Powers Act (IEEPA). Results came in from 300 respondents in top roles, including CEO and senior VP, from major U.S. corporations with sales of $1 billion and up. Primary industries represented included automotive (10 percent of respondents); consumer goods (10 percent); and industrial manufacturing (20 percent). Of all respondents, the primary export destination is Europe, followed by Canada and Mexico. Primary source of origination for imports was China, followed by Europe and Mexico. 

Hiring trends revealed some good news: 36 percent of respondents reported job reductions in February, down from 47 percent in September. Meanwhile, the portion of respondents reporting hiring was 27 percent in February, up 10 points since September.

Thirty-seven percent said they paused hiring due to economic uncertainty from tariffs.

Companies are delaying investments 

A majority of respondents to questions covering both tariffs and other issues reported lower sales, higher prices and shrinking margins. 

That’s left many rethinking investments and future projects, with more than two-thirds — 68 percent — reporting they’re delaying investment decisions, including 20 percent by more than a year. 

For example, 48 percent of respondents said their companies have postponed new capital investments by up to 12 months. Other investments are lagging, too, with 51 precent reporting tariffs have affected investments involving the expansion or upgrade of manufacturing facilities; 43 percent, on new technology, R&D or product development; 44 percent, on supply chain and logistics infrastructure improvements; and 10 percent, on projects involving AI and machine learning. 

Hesitation to invest in new equipment because of tariffs and economic uncertainty was also noted by many plastics machinery OEMs late last year, when contacted by Plastics Machinery & Manufacturing (PMM) to discuss their outlooks for 2026. 

One-quarter of respondents in KPMG’s survey reported they had cut or closed U.S. operations due to higher costs from tariffs, up from 11 percent in September. While 22 percent moved production to the U.S., 12 percent moved out of the U.S. 

Enacted in part on grounds that they would encourage reinvestment in American manufacturing, tariffs seem to be spurring some interest in onshoring — but progress on that front will take time, with three-fifths of respondents saying they would need one to three years to bring more work to the U.S. 

Thirty-nine percent reported they expect to move more quickly on reshoring or nearshoring projects over the next two to three years, while 53 percent expect to do the same regarding investments in existing U.S. operations. 

About one-quarter of respondents — 26 percent — said they are in formal planning or execution phases of reshoring projects, and one-third are actively evaluating such projects.

Effects of decision on IEEPA tariffs

The Supreme Court’s ruling striking down the IEEPA tariffs seems to have buoyed spirits for respondents. In September, 7 percent expected to see a margin increase. By February, that percentage had quadrupled to 28 percent. But the Court’s ruling boosted that further, to 44 percent following the Court’s decision. However, the announcement didn’t bolster confidence in investment planning and decisions, with 40 percent reporting low confidence prior to the Court’s ruling, and an even higher number — 50 percent — reporting low confidence following the ruling. 

While Yvette Connor, a risk advisory practice leader for the CohnReznick Advisory LLC risk advisory firm, told PMM she saw no reason to deter companies from staking claim to some of the $130 billion collected by the IEEPA tariffs, KPMG survey respondents showed some hesitation. Sixty-two percent expect a refund, but fewer than 3 in 10 plan to pursue it; among the concerns holding them back, 37 percent cited anticipated legal costs or effort, and 24 percent said they are concerned pursuing a refund will hurt their relationship with the government. 

Only 32 percent of respondents to a recent poll conducted several weeks ago by Plastics Machinery & Manufacturing (PMM) parent company EndeavorB2B and its ExecutiveEDGE business intelligence division said they are already pursuing a refund or expect to do so. But among manufacturers, interest in pursuing a refund was higher — 51 percent.  

Most companies responding to the KPMG survey reported they won’t be passing on any refunds to their customers. 

While the Court nullified the IEEPA tariffs, other tariffs — some enacted the same day as the Court’s ruling — remain, and survey responses showed companies’ coping strategies are evolving.

Over the next six months, 55 percent of respondents anticipate increasing prices; 32 percent anticipate they’ll raise prices by as much as 5 percent over that time span, and 23 percent by 6-15 percent. 

The share of companies passing through more than half of tariff-related costs also is going up — from 13 percent in May to 34 percent now. According to a New York Fed Survey, nearly one-third of manufacturers and about 45 percent of service organizations are fully passing on all tariff-related cost increases to their customers.

In responses to some questions not directly related to tariffs, the survey found three-quarters of respondents are upskilling employees to meet labor needs; 41 percent are turning outside their organization to find specialized talent; and 48 percent are investing in automation. 

That correlates with the results of PMM’s annual survey, conducted at the end of 2025, which showed nearly half of respondents were struggling with a lack of skilled labor, and 57 percent planned to invest in automation to help mitigate it.