Chief Executive Research
Wall Street may have relaxed after the White House announced a 90-day pause in the full implementation of tariffs, but America’s CEOs didn’t.
As the clock ticks down on the reprieve, our most recent poll of 300 U.S. CEOs, conducted in May with AlixPartners, finds U.S. business leaders racing to do what they can do to navigate the muddy waters ahead: reforecasting their financial picture, scenario planning, advancing purchases ahead of the full tariffs coming online, and, by an overwhelming majority, raising their prices, despite the increasingly public political demands of the Trump White House that they not do so.
Asked what their “top strategies” were to deal with the tariff uncertainty right now, the most cited answer was—as you might expect—to simply reforecast and think through possible strategies for what might come to pass. Overall, just 10 percent said they were taking a “wait and see” approach to the tariffs at this point. “This is not the time to panic,” said one CEO, “but to consciously refine.”
According to our survey, nearly half (48 percent) of CEOs polled say they have paused hiring and 45 percent say they have paused making major investments in their business in response to the tariffs.
Steven Dubuc, partner and managing director, Americas leader of sourcing and procurement transformation at AlixPartners, who partnered on this research, counsels CEOs to prioritize moves aimed at mitigation and stabilization that will help them “regardless of shifting policy or the economy.” Cash preservation, tariff engineering, immediate pricing actions with suppliers and customers where necessary, and establishing a war room to help manage the moment should all be part of the mix.
They also need to deeply understand the company’s and competitors’ end-to-end supply chains from supplier through to the customer, shifting where necessary, and creating or exploiting areas of advantage. “Some companies will not waste the crisis and will come out ahead,” he says.
When it comes to dealing with tariffs, raising prices is a clear centerpiece of the strategy for many CEOs: 68 percent reported they had either increased prices so far this year or are considering doing so. That’s likely because 67 percent say they have already received a price increase from their vendors this year— with 23 percent say they face “substantial” jumps in what they are being charged.
In response, CEOs are passing along substantial increases of their own, with at least as many CEOs planning to hike prices by 5 percent or more for the year (28 percent) as those who plan to keep them the same or cut them (27 percent). The remainder (40 percent) plan to increase prices, but more gradually—by less than 5 percent for the year. And 6 percent of those surveyed haven’t made a decision yet.
To do so, 63 percent of those surveyed plan to simply push increases with the products and categories where they have simply have the most elasticity with customers. As for the idea of a temporary “tariff tax” or surcharge, that’s far less popular, with only 19 percent saying they’ll turn to that option.
Looking deeper into the tactics CEOs are considering to reduce the potential impact of tariffs: 32 percent are advancing purchases ahead of the 90-day deadline, negotiating cost reductions (30 percent) and shifting supply chains (57 percent). More specifically, 29 percent say they are exploring alternative countries and reducing imports from likely high-tariff zones and 28 percent say they’re looking to find domestic manufacturing alternatives in the U.S.
The problem? “Not all products and materials are available in the U.S.,” said the CEO of a mid-sized manufacturing firm participating in the poll. “In some cases, we have been trying to find material sources outside of China and they are unavailable.”
And even those who had succeeded in de-risking their supply chains by moving them to more reliable or cheaper trading partners now say the broad scope of the tariffs proposed by the Trump administration have forced them to rethink that strategy.
“We have worked with a manufacturer to try to develop a piece for an assembly in Vietnam for 5 years,” said one CEO. “So far, it has been unsuccessful because the steel is not tempered to the high enough strength and the cost is extremely uncompetitive. We are still trying but now are also faced with tariffs in Vietnam, our ally who we have partnered with for additional product manufacturing.”
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