The broad pressure created by United States tariffs on American middle-market companies isn’t going away, but it is subtly shifting. One in three of all goods firms—the sector directly impacted by tariffs—reported feeling highly uncertain in May about how levies on most foreign countries will affect their business operations, the same number as in April. But low-uncertainty goods firms, meaning those with more confidence in their ability to weather supply chain turbulence, edged up to one in three.
Meanwhile, far fewer services firms (19%) reported high uncertainty in May, a sharp drop from just under one in four in April and the lowest share in more than a year. Many services firms downshifted last month from pure pessimism to a somewhat uncertain outlook. Collectively, the changes show how as the Trump administration’s global trade agenda shifts from background risk to balance sheet reality, companies are evolving their responses in real time to navigate supply chain uncertainty and maintain financial stability, operational efficiency and investor confidence.
But as companies adapt, that doesn’t mean they’re in the clear. More than half of goods firms (54%) now say they are not confident they can adapt to supply chain shocks, up from 48% in April and 30% in February. The larger a company is, the more foreign suppliers it tends to have, and the bigger its headaches as it works to rejigger things to keep the ship sailing. Certainty comes in different flavors and degrees, but what’s certain is that the shifts in the global trade order are forcing tactical adjustments, compromises and trade-offs.
Regardless of the level of confidence, standing still amid the disruption is not an option.
Nearly eight in 10 goods firms were redesigning their workflows as of May, up from 62% in April. Two in three good companies are using data analytics for insights and forecasting, up from 48% in April. Services firms have also boosted their efforts in those areas, though at a slightly lower level compared to goods firms.
Notably, both sectors have boosted their use of AI to cope with the challenges.
These are just some of the findings detailed in “Tariff Uncertainty Craters Confidence to Zero at Exposed Consumer Goods Companies,” a PYMNTS Intelligence report. This edition examines how middle-market CFOs are responding to tariff-related disruption. It draws on insights from a survey of 60 CFOs from companies generating annual revenue between $100 million and $1 billion over May 6, 2025, to May 14, 2025.
High-uncertainty firms report low confidence in adapting to new tariff shocks
No U.S. middle-market goods firms now say they are wholly confident they can handle the disruption in global supply chains.
Chief financial officers are adjusting on the fly how their companies operate and plan for growth amid the constantly fluctuating global trade war. But as announcements of talks between major trading partners start, stop, then sometimes start again, not all U.S. middle-market companies are responding in the same way. New PYMNTS Intelligence data shows that zero companies with a high level of uncertainty about the broad impact of the Trump administration’s trade agenda reported in May that they are very or extremely confident they can handle tariff-related supply chain disruptions. That’s down from 11% in April, when the “Liberation Day” levies were unveiled, and below just under one in four in February, when proposals for duties on major trading partners were in the air but not yet concrete policies.
Tariffs have a spillover effect on everything from the cost of imported goods and supplies to consumer prices to hiring and investment in new technologies and products. And in a broad sense, overall business pessimism is falling. The share of all goods and services CFOs surveyed who report being “very” or “extremely” confident in adapting to tariff-related disruption slipped to 28% in May from 30% in April.
What’s notable is that among firms with high levels of operational uncertainty, confidence has cratered. No CFOs in either sector who are highly uncertain about the impact of tariffs on their operations reported strong confidence in May that they can adapt to supply disruptions, down from 11% the month prior and 38% in February. More than eight in 10 companies, or 84.6%, that are dependent on overseas suppliers and possess a gloomy view of the impact of tariffs on their operations have little to no confidence in their ability to adapt. That’s more than double the share in April. For many companies dependent on sprawling global supply chains, confidence has cratered.
At the same time, the split between goods and services companies shows a tale of outlooks.
Goods-sector CFOs are split evenly in their prognoses of the impact of tariffs, with one in three reporting uncertainty at either high, medium or low levels in May.
By contrast, 19% of service-sector CFOs reported being highly uncertain last month that they could adapt to supply chain disruptions. That is less than half April’s level of 37%, and the lowest share since February 2024, when 46% were highly uncertain. Still, one in two service firms now reports mid-level uncertainty, up from 37% in April. Meanwhile, just over three in 10 now have low-level uncertainty, up from 27% in April. At services firms, the red alarms are shifting to shades of yellow.
These changing sentiments underscore that goods firms and high-uncertainty firms in any sector feel far less equipped—or less convinced—that they can handle what’s next. Their drop in confidence isn’t abstract. It both reflects and predicts how they will cope. Companies that lose confidence are less likely to invest, adopt new systems or absorb future shocks.
Global supplier exposure raises costs—and spurs operational adjustments
Tariff-linked disruption is fueling operational adjustments and boosting investment in AI.
More than three in four of all goods-sector firms surveyed in May said they had introduced new processes and workflows within the last 30 days. Goods firms are also making broader shifts with their data strategies. Sixty-five percent now use analytics to gain insight and forecast trends, up from just 48% in April. Services firms have stepped things up as well. More than half, or 52%, used new workflows in May, up from less than half (48%) in April. Nearly two in three used data analytics last month, more than double April’s level.
In both sectors, tariffs have added fuel to the adoption of automation and AI. More than one-third, or 35%, of goods firms boosted their use of the technology in May, up from 29% in April. Services firms showed the same trend, though at a lower rate (16% in May vs. 10% in April.
Collectively, the changes illustrate the variety of arrows in a business’s quiver now being deployed to mitigate the impact of tariffs. They also suggest that firms, especially in the goods sector, are taking broader, faster actions to adapt.
Goods firms take faster tariff-related action than services firms
Firms with larger supplier networks report deeper disruption from tariffs and a stronger operational response.
Middle-market firms managing larger supplier networks are responding more quickly and forcefully to tariff pressure. Because many goods firms operate with higher supplier counts, they face greater pressure to adjust their daily operations. These shifts are measurable and visible in the structure of their networks.
Nearly three in 10 goods firms say they worked with more than 100 suppliers in the past 12 months. By contrast, only 21% of services firms report the same. This difference matters. Larger supplier networks increase exposure to cost, compliance and logistics challenges, but they also offer more levers to pull. It’s a double-edged sword: Firms managing more suppliers are at higher risk, but they may have more options to adapt.
Among firms generating $1 billion or more in annual revenue, almost one in four say they worked with between 101 and 500 suppliers during the 12 months. Another 3.4% say they worked with between 501 and 1,000. These are not statistically insignificant or outliers. They represent the companies now dealing with the greatest operational complexity and the greatest risk from tariff-linked volatility.
By industry, the pattern holds. Many goods firms maintain larger supplier networks than their peers in services. For example, 19% of goods firms worked with 51 to 100 suppliers in the last 12 months. One in four worked with 101 to 500 suppliers. Still, many services firms, which unlike goods firms are indirectly impacted by tariffs, also use sizable suppliers, though at several percentage points below the above rates of goods firms. The data reflects supplier questions posed to respondents for the first time, so historical comparisons aren’t available.
Amid the turmoil, goods firms are hardly standing still. Instead, many are ready to redesign workflows, introduce new services to justify higher prices and shift production away from single-source vendors. These actions reflect direct operational strain, not the execution today of future planning.
Tariff pressure drives reactive AI adoption among the most exposed firms.
Firms facing high uncertainty aren’t betting on efficiency gains. Instead, they’re spending to stay operational today. Most firms adopting AI to help ease their paths to coping with tariffs are not chasing long-term efficiency—they’re containing near-term fallout. Two-thirds of goods firms say tariff disruptions have shifted their focus away from digital transformation and toward short-term fixes. But just half of services firms say the same, highlighting a tariff tale of two sectors.
Acceleration in AI adoption is also uneven. Sixty-two percent of goods firms in May report adopting AI or automation to help offset pricing pressure, compared to half of services firms. That divide sharpens further across certainty levels. Seventy-eight percent of low-uncertainty firms say they are accelerating AI adoption. Just 23% of high-uncertainty firms report the same.
These gaps reflect more than posture—they reflect constraint. Among high-uncertainty firms, 84.6% say tariffs have already limited their ability to fund AI or automation. Just 17.4% of low-uncertainty firms report that constraint. The same pattern holds by supplier base: Two-thirds of firms with mostly international suppliers say they’re accelerating AI adoption. Only 56% of domestic-focused firms are doing so.
In short, tariff pressure hasn’t slowed AI adoption—it has reshaped it. Firms with lower uncertainty are still investing to get ahead. Firms with higher uncertainty are spending to stay functional.
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Methodology
“Tariff Uncertainty Craters Confidence to Zero at Exposed Consumer Goods Companies” is based on a PYMNTS Intelligence survey conducted from May 6, 2025, to May 14, 2025. The report, the latest in The 2025 Certainty Project Series, examines how U.S.-based middle-market CFOs are responding to tariff-driven disruptions affecting input costs, supply chains and long-term planning. Our sample included 60 CFOs from U.S. companies with annual revenues between $100 million and $1 billion. Respondents represented both goods and services firms. Results were analyzed by industry segment, supplier network breadth and level of operational uncertainty to reveal how companies are adapting to trade-related challenges.
