Tariff tsunami hits US firms — and your wallet could be next

A majority of American companies, and 38 per cent of European and Chinese language firms are making ready to boost costs within the coming months because the affect of President Donald Trump’s sweeping tariffs reverberates by way of the worldwide financial system. Based on a brand new survey by Allianz Commerce, 54 per cent of US firms say they plan to hike costs to offset the rising price of imports, whereas solely a small fraction—simply 15 per cent—intend to soak up these further bills themselves.

A brand new survey by Allianz Commerce paints a stark image of worldwide enterprise sentiment within the wake of “Liberation Day” – the time period now extensively used to explain 2 April 2025, when former US President Donald Trump’s administration introduced a sweeping escalation in tariffs in opposition to China.

The findings are a part of a broader image painted by Allianz’s spring survey, which canvassed round 4,500 companies throughout 9 international locations—together with the US, China, Germany, and France—between March and April 2025. Globally, 38 per cent of respondents stated they anticipate to boost costs in response to tariffs, with US and Chinese language companies main the best way.

Worth hikes, pushed prices and Incoterms shifts

Globally, companies are attempting to dump rising prices. Within the US, 54 per cent of companies say they’ll increase costs, up from 46 per cent earlier than the tariffs. In the meantime, sourcing from different markets is gaining floor, significantly in Spain and Poland.

Few are prepared to soak up the prices straight. Simply 22 per cent see this as viable — a determine that has dropped additional within the US, France and Italy since April.
New buying phrases are additionally rising. Many patrons are actually insisting on “Delivered Obligation Paid” contracts, shifting customs and logistics prices onto sellers. The US stays an outlier, with “Price, Insurance coverage & Freight” nonetheless dominant.

Corporations are additionally spreading foreign money threat: 59 per cent have launched pricing clauses that tie contract values to FX actions, permitting them to share volatility with purchasers and suppliers.

A blow to exporters’ confidence

Earlier than “Liberation Day”, solely 5 per cent of exporting firms anticipated a downturn in turnover. Now, 42 per cent are bracing for declines of between 2 per cent and 10 per cent over the subsequent yr. Near 60 per cent of surveyed companies anticipate a adverse affect from the brand new spherical of US-China hostilities.
Export optimism has collapsed: fewer than half of companies anticipate export development, down from 80 per cent simply weeks in the past. As well as, greater than 1 / 4 (27 per cent) warn that foreign money volatility, together with larger tariffs, may pressure short-term manufacturing halts, whereas a 3rd are planning to halt imports or offshore operations to handle rising prices.

Funding methods diverge sharply

The commerce conflict has additionally shifted funding priorities. In Germany, 45 per cent of companies now favour cost-cutting and effectivity, whereas Chinese language firms are taking a extra expansive method: 77 per cent are channelling funds into strategic diversification and new enterprise strains.

This divergence underscores the uneven affect of the battle: whereas Western companies are retreating to guard margins, Chinese language firms seem like utilizing the disaster as a possibility to reposition.

Cost delays and rising default threat

Exporters are additionally going through mounting money move issues. Half now anticipate fee delays exceeding seven days — a 13-point improve post-“Liberation Day”. In Italy and Poland, the determine is much more extreme, with concern leaping by 23 and 26 factors respectively.

Solely 11 per cent of export companies now obtain funds inside 30 days. Bigger firms, significantly these with turnovers exceeding €5 billion, are particularly susceptible, with 1 / 4 going through fee phrases over 70 days. Sectors equivalent to retail, agriculture and manufacturing are bearing the brunt, with SMEs significantly uncovered. Unsurprisingly, fears of non-payment are spreading. Practically half of all exporters anticipate fee defaults to rise, significantly within the US, UK and Italy.

American companies frontload and reroute

Whereas a short lived commerce deal has reduce the typical US tariff on Chinese language items to 39 per cent from a earlier peak of 103 per cent, this stays triple the speed in place earlier than Trump’s return to workplace. The consequence? Strategic frontloading.

Effectively earlier than the tariffs had been formally introduced, 79 per cent of US companies started accelerating imports from China, particularly in agriculture, equipment and metals. Now, rerouting is the popular mitigation technique, with 62 per cent of American companies exploring different delivery lanes — aided by an almost 50 per cent drop in freight prices since January.

The worldwide race to diversify

Corporations should not standing nonetheless. One in three has already discovered new markets for exports and provide chains, and practically two-thirds plan to comply with go well with. For US companies, the strain is acute: 60 per cent with abroad manufacturing have already relocated, pushed by heightened publicity and longer provide chains.

Geopolitical instability is now seen as one of many high three dangers to world provide networks. Even earlier than the most recent tariffs, 34 per cent of companies had shifted or deliberate to shift offshore manufacturing, with 59 per cent making ready for extra change.

The decoupling continues, regardless of a truce

Whereas the 90-day pause between the US and China presents a short reprieve, it has not modified strategic route. Chinese language companies are more and more distancing themselves from North America, favouring relocation to Asia-Pacific and Western Europe. Notably, all surveyed Chinese language companies with North American provide chains stated they intend to relocate — up from 79 per cent earlier than April.

On the opposite aspect, American firms are additionally adjusting. Desire for relocating to Western Europe has greater than doubled, from 11 per cent to 25 per cent, whereas curiosity in Latin America has risen from 9 per cent to 25 per cent. Asia-Pacific, as soon as a first-rate vacation spot, now sees lowered curiosity (down from 61 per cent to 34 per cent).

This realignment has already hit trans-Pacific commerce. US companies’ intention to export to China and East Asia dropped by 11 factors. Chinese language curiosity in North America plummeted from 15 per cent to only 3 per cent.

Friendshoring and the Latin American exception

Amidst the geopolitical turbulence, new alliances are forming. Europe is changing into a most popular commerce accomplice for each Chinese language and European exporters. Chinese language companies are more and more concentrating on Europe for exports, whereas EU-based firms are doubling their curiosity in South and Southeast Asia.

German companies, as soon as desirous to exit China, are displaying extra willingness to stay. The share planning to relocate dropped from 67 per cent to 50 per cent, with Asia-Pacific changing into the highest relocation vacation spot for these presently uncovered to North America.

Latin America, in the meantime, is quietly changing into a key beneficiary. For Chinese language companies, curiosity within the area has tripled, providing a tariff-friendly backdoor into the US. European companies, too, are displaying larger curiosity, with perceived export alternatives in Latin America rising by 6 factors.

Volatility is the brand new regular

The Allianz Commerce survey paints a transparent image: the commerce conflict has set irreversible adjustments in movement. “Liberation Day” could have marked a return to aggressive US protectionism, however for the worldwide enterprise group, it has ushered in an period of strategic reshuffling. Rerouting, diversification, friendshoring — these are now not contingency plans however core methods.

As tariffs rise and geopolitical tensions deepen, companies are adapting rapidly — and the brand new commerce map is being redrawn earlier than our eyes.

Keep tuned with Euro weekly information for the newest information about Europe US and the world.