US CEOs Prepare for Long-Term Tariffs Amid Trade Policy Shifts

American CEOs are adapting to tariffs as a lasting feature of the trade landscape, according to a new report from consultancy PwC. The survey, which included 633 US executives, reveals that 86% now treat tariffs as a permanent assumption in their business planning, signaling a shift away from viewing them as temporary measures.

Tariffs as the New Normal

Kristin Bohl, PwC US partner in Customs and International Trade Practice, emphasized that CEOs are no longer planning around short-term tariffs. "They're treating tariffs as part of the new normal for doing business, with the expectation they'll be in place for years," Bohl stated. This sentiment comes despite ongoing legal challenges to tariff policies, such as the Supreme Court striking down levies imposed under the International Emergency Economic Powers Act (IEEPA).

"Our advice is simple: act now. Build tariffs into pricing, supply chains, and operating models, and stay flexible." — Kristin Bohl, PwC

Economic Implications

The Congressional Budget Office projected that tariffs could generate over $4 trillion in revenue for the federal government over the next decade. Meanwhile, companies are grappling with supply chain disruptions exacerbated by geopolitical tensions, including conflict in Iran. Many firms are also navigating the complexities of potential tariff refunds following the Supreme Court's ruling, with the Court of International Trade and US Customs and Border Protection tasked with implementing the refund process.

Industry Impact

Companies like Lamborghini have reported shrinking profitability due to tariffs, even as sales remain strong. A KPMG survey found that more than half of US companies experienced tightening margins, with 70% delaying major investments as a result of tariff pressures. Some importers are selling their tariff refund claims to hedge funds or using them as loan collateral, accepting reduced returns for immediate liquidity.

As trade policies continue to evolve, US businesses are prioritizing adaptability and proactive planning to mitigate tariff impacts on their operations.