Companies Say Tariff Impacts Lessen as Countries Negotiate New Trade Deals

Global companies reportedly expect the impact of tariffs to lessen as more countries negotiate new trade deals with the United States.

While companies expect their combined cost of tariffs to total between $21 billion and $22.9 billion this year, they expect it to drop to $15 billion in 2026, Reuters reported Monday (Oct. 20), citing its analysis corporate statements, regulatory filings and earnings calls.

The report added that companies feel there is less uncertainty around tariffs now and that they are better able to make plans.

The decline in tariff cost estimates can be attributed to trade deals the U.S. reached with the European Union and Japan, which resulted in lower tariff rates, according to the report.

Countries that do not have new trade deals continue to bear high tariffs, as do the companies that import goods from those countries. The report cited as an example Vietnam and Nike, which raised its estimate of tariff costs in September from $1 billion to $1.5 billion.

Some sectors have benefited from recent reductions in tariffs, per the report. Some car companies have seen tariff reductions meant to support U.S. auto production, while some drug companies have earned exemptions from tariffs by making some changes around drug pricing and manufacturing, the report said.

PYMNTS reported Wednesday (Oct. 15) that many companies have quantified the cost of tariffs, embedded it into forecasts, and reworked supply and sourcing strategies.

On Oct. 13, Philadelphia Fed President and CEO Anna Paulson said that tariff-induced price increases have been “somewhat smaller than anticipated” and that the increases that have been seen are unlikely to leave “a lasting imprint on inflation.”

Paulson said many firms had found ways to avoid passing on increased costs to their customers in order topreserve their market share.

The PYMNTS Intelligence report “The Enterprise Reset: Navigating Tariffs, Supply Chain Shifts and Cost Pressures” found that companies have cut costs, diversified foreign suppliers, localized sourcing and reengineered operations to boost their resilience and stay competitive.

In dealing with the impact of tariffs, companies have broken away from business as usual by replacing suppliers, redesigning products and leaning into just-in-time inventory models, according to the report.