What happens when large companies face disruption in the global business environment but are uncertain about how it might unfold and how long it will last? If they’re enterprise-level goods and retailers in the United States, most don’t rush to replace their foreign suppliers with domestic ones, for a start.
U.S. business leaders are now making hard decisions as U.S. tariffs on imports undergo significant fluctuations and overseas supply chains come under strain. Still, hardly any are rejiggering their operations to make them U.S.-based and dependent on American materials and supplies. Instead of reshoring—a goal of the Trump administration’s trade agenda to bring American manufacturing home—they’re negotiating with suppliers, cutting overhead costs and raising prices. That suggests they’re betting that the current back-and-forth of the tariffs regime will ultimately result in more favorable (for them) trade deals or lower-than-proposed levies. This stance resembles the “TACO” (“Trump always chickens out”) view held by many investors who share the same sentiment. PYMNTS Intelligence research shows that most firms are reacting to the shifting global trade war with a wait-and-see approach that’s focused on near-term responses, not long-term structural changes.
These are just some findings from “The Enterprise Reset: Tariffs, Uncertainty and the Limits of Operational Response,” a PYMNTS Intelligence study. Data was collected from a survey of 60 CFOs—each representing a U.S. company generating at least $1 billion in annual revenue—that was conducted May 6, 2025, through May 16, 2025.
The “TACO” Mindset
Markets call it the “TACO” trade—Trump Always Chickens Out. The phrase captures investor skepticism that sweeping tariffs will fully materialize as currently laid out for the long haul. Leaders of enterprise companies appear to be applying a similar logic as they assess how to respond and make tactical changes in the present.
Just 5.9% of firms in May reported reshoring their foreign suppliers, down from 9.1% the month before. Roughly one in three (35%) enterprises surveyed said they might diversify their international suppliers. This share is down from 45% who said the same in April. The share of companies that have already made that move rose to 29% in May from 26% a month earlier.
Nearly all (96%) of goods and retail firms—the sector most directly impacted by tariffs—say the levies present a chance to support the U.S. economy. Eight in 10 of those companies say tariffs will free up financial resources to invest in innovation.
CFOs make short-term fixes as tariff uncertainty continues.
But those widespread beliefs aren’t driving investment. What they are driving is short-term tactical responses intended to cope with uncertainty now. More than nine in 10 goods and retail companies identified negative impacts associated with tariffs. These include planning challenges and higher costs for reconfiguring their supply chains. Nearly seven in 10 (69%) fear that retaliatory tariffs from major trading partners, including Canada, China, Mexico and the European Union, will harm their exports. The findings reveal a disconnect between what large companies claim is possible and what they are actually doing on the ground, as well as their expectations for the future. This thesis aligns with PYMNTS Intelligence’s analysis showing that 94% of enterprise CFOs in goods have not attempted reshoring. Like other firms, these retailers are making defensive adjustments designed to buy time while the global trade war unfolds.
The survey data indicate that companies are opting for margin management over significant structural changes. Just over one in two CFOs say they are likely to raise prices in response to tariffs. Nearly three in 10 report having already done so (28%). Thirty-five percent have cut operational costs, including employee salaries, while 72% say further cuts are possible. These tactical adjustments significantly outpace structural ones. Just 10% of enterprises reported redesigning their products to use different materials in May, down from 27% in April.
In other words, enterprises don’t appear to be acting like tariffs at their current levels are here to stay. Instead, they seem to be hoping to run out the clock. That’s the TACO mindset: Make tactical moves in the short term to survive without betting on a future that may never arrive.
Tariff Uncertainty Is Universal—But Action Is Cautious
The actions enterprises have taken so far reflect their current assessments of the impact of tariffs today. In the goods sector, 89% of CFOs say the duties are expected to have a mostly or entirely negative effect on their business finances. Just 3.8% see any upside. That contrast becomes sharper across sectors. In services, which are likely to be indirectly affected by tariffs through shifts in spending and other spillover macroeconomic effects, only 27% expect a negative impact. Interestingly, in technology, none do. In fact, 58% of tech CFOs believe tariffs will have a mostly or entirely positive effect. This is possibly due to their reliance on outsourced labor for coding and software development, an area not impacted by tariffs.
In the technology sector, the lack of immediate cost exposure likely allows firms to maintain flexibility. Their posture can be more opportunistic, rather than reactive. The bifurcation is structural: CFOs of firms dependent on physical goods and cross-border sourcing experience tariffs as a financial drag. Companies built around services or software are less likely to.
Yet for the average enterprise, the difference isn’t abstract—it’s concrete and operational. Surveyed firms have responded with cost cuts, supplier renegotiations, hiring freezes and pricing changes. More than half are negotiating with suppliers for better pricing. Over three in 10 are leveraging just-in-time inventory. Nearly one-third are reducing their operational costs, and nearly four in 10 anticipate potential hiring freezes or layoffs. These actions, taken under pressure, are less signs of permanent, long-term transformation and more signs of coping in the near term.
Supply Chain Overhauls Remain on Pause Due to Tariff Uncertainty
True, goods firms expect near-term disruption. Eighty-four percent of goods sector CFOs say they expect shortages or delays in getting products this year. At the same time, 72% expect that to happen in the next three to 12 months. Two-thirds expect raw material costs to rise during this period. Fewer than one in four believe their firms will enhance their supply chain resilience within a year.
The timeline to rebuild is long. Among goods firms, 61% say resilience improvements could take up to three years—a period that bumps up the end of President Trump’s second term. Services firms show a similar lag: More than eight in 10 expect higher costs and 67% expect shortages, but only half foresee supply chain gains within 12 months. The technology sector is an interesting outlier: 100% of companies expect higher input costs and 75% expect shortages. Just 30% say resilience will arrive within the next three months, with eight in 10 expecting that within the next 12 months. In short, firms are being asked to make long-term decisions on a dime. Next to none are taking big risks around these choices.
Even where firms see a long-term upside, near-term action remains rare. Notably, six in 10 goods and retail firms say tariffs are a chance to support the U.S. economy; eight in 10 tech firms say the same.
In nearly every sector, action on supply chain transformation trails behind expectations of cost pressure and delay. The outcome is a playbook of temporary margin management—price increases, cost cuts, renegotiations—not structural redesign.
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Methodology
This edition of the 2025 CAIO Project, “The Enterprise Reset: Navigating Tariffs, Supply Chain Shifts and Cost Pressures,” is based on a survey conducted from May 6, 2025, through May 16, 2025. It examines perceptions of uncertainty surrounding the volatile trade and macroeconomic environment, focusing on U.S. tariffs and how enterprises manage related risks. The survey collected responses from 60 chief financial officers at U.S. companies with at least $1 billion in annual revenue.
