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A year after the Trump administration began imposing tariffs on a broad swath of imports, United States businesses are seeing their margins fall and operational costs rise while passing on a higher share of tariff costs to customers, a KPMG survey found.

The survey also showed that companies are slowly but decisively shifting from “evaluating to actively executing on supply chain changes, including reshoring manufacturing to the United States,” KPMG said in a news release.

Drawing on data from a survey of business leaders in February 2026, as well as two previous surveys in May and September 2025, KPMG said its data show that prices have risen consistently over the past year. The share of businesses passing on more than half of tariff costs has risen to 34%, up from 13% last May. Moreover, 55% of executives said they plan to raise prices by up to 15% within the next six months.

“The burden of tariffs has now moved squarely onto the consumer,” Brian Higgins, U.S. sector leader for industrial manufacturing for KPMG U.S, said in a statement. “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.”

Eighty two percent of companies said their foreign sales had declined since tariffs were first imposed, and 61% now report a decline in domestic sales as well.

Although Europe, Canada and Mexico are still the top export markets for U.S. companies, sourcing costs have risen by more than 25%. In addition, 45% of organizations exporting to Europe reported decreased sales in the region. China, Europe and Mexico remain the top three sources for imports.

Overall, most organizations reported a drop of up to 25% in sales, with foreign sales impacted more than domestic sales.

“In the face of continued trade uncertainty, leaders are making the hard decisions to move from defense to offense by redesigning their global supply chains,” Scott Rankin, advisory products line of business leader for KPMG U.S. said in a statement. “The clear takeaway for every CEO is that supply chain resilience is no longer optional — it’s a competitive advantage you have to invest in today to win tomorrow."

The overall effect of tariffs on hiring has been relatively muted. Hiring cuts have eased by 11 percentage points, and hiring has risen by a similar percentage.

A third of companies in the February 2026 survey reported hiring for specialized roles that could handle tariff complexity, up from 22% in September 2025. In February, 44% said they have also invested in automated systems that resulted in little to no additional hiring, up from 38% in September.

KPMG added that some in-demand job skills remain difficult to find domestically, especially advanced manufacturing and production skills, along with supply chain and logistics management. Organizations are primarily addressing these gaps by upskilling existing employees, along with increasing automation and engaging in targeted hiring.

Survey data over the past year “shows a directional shift toward bringing operations back to the U.S.,” KPMG said. For example, 26% of respondents in February 2026 said they were formally planning or actively executing reshoring initiatives, up from 10% in September 2025. At the same time, 33% said they were actively evaluating reshoring options, up three percentage points from the previous survey.

Sixty percent of companies said it would require one to three years to fully reshore their operations, which is down from 79% in May 2025. However, the share of companies saying it will take longer than three years has more than doubled, from 5% in September 2025 to 13% in February 2026. High U.S. labor costs, greater capital investment needs, deeply integrated global supply chains and continuing trade uncertainty are the top challenges to reshoring, survey respondents said.

The share of executives expecting a margin increase in the next 12 months jumped from 7% in September 2025 to 44% in March 2026 after the U.S. Supreme Court invalidated many of the Trump administration’s original tariffs.

However, President Donald Trump subsequently imposed a global 10% tariff, which has been challenged in court by businesses and states. As a result, plenty of uncertainty remains, with half of all business leaders reporting “low confidence in executing their investment plans and strategy,” KPMG said.

In response, 53% of businesses are prioritizing investments in their existing U.S. operations, and 39% are accelerating reshoring plans over the next two to three years. This signals “a cautious but deliberate move to strengthen domestic supply chains,” the consulting firm said.

“Ultimately, agility is the key to navigating this landscape,” Andrew Siciliano, global trade and customs services leader at KPMG, said in a statement. “The focus is shifting from simply reacting to tariff announcements to proactively building more resilient, flexible supply chains. While challenging, strategic investments in technology and trade expertise are necessary for long-term stability and competitiveness in this new era of global trade.”

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