Economic Whiplash Pushes Mid-Sized Firms to Play Defense

For a certain kind of business, uncertainty isn’t an abstraction.

For these businesses, including the mid-sized manufacturer, the regional supplier, the scaled consumer goods firm, uncertainty is a daily operating condition. And that condition has consequences.

Data from PYMNTS Intelligence’s June 2025 edition of The 2025 Certainty Project, “Tariff Uncertainty Craters Confidence to Zero at Exposed Consumer Goods Companies,” revealed a striking finding: not a single chief financial officer in the exposed goods sector expressed confidence in their firm’s ability to navigate the current tariff environment.

Zero percent. It could signal a crisis of economic confidence unfolding just under the radar, with significant consequences for the direction of U.S. industrial strategy.

At stake is more than just margin protection. What’s being rewired is the strategic time horizon of American mid-market firms.

Rather than doubling down on long-term growth engines like R&D or transformative tech investments, the report found that CFOs are pulling back. Instead, they’re reallocating capital and bandwidth toward short-term adaptability — AI-powered logistics, emergency sourcing frameworks and scenario-based inventory modeling.

Staying Still When the Rules Keep Changing

While the absolute level of tariffs may fluctuate, the lack of visibility into future policy has become a binding constraint on strategic planning.

The PYMNTS Intelligence report surveyed CFOs representing consumer goods firms, which are companies particularly vulnerable to import-related cost shocks. The report findings point to a growing imbalance between operational execution and strategic development.

Sudden shifts in tariffs — sometimes applied with limited notice or as part of larger diplomatic disputes — undermine the planning cycles that mid-sized firms depend on for capital budgeting and contract negotiation.

More than half of all surveyed CFOs across industries said they have delayed or canceled capital investment plans due to tariff policy volatility. The number was even higher — 63% — among consumer goods firms with heavy import exposure. These delays affect a broad range of initiatives, from expansion into new markets to supply chain digitization and product innovation.

In the current environment, the time horizon for business planning is more and more compressing. CFOs are increasingly focused on quarterly or even monthly outcomes rather than multi-year growth trajectories. That compression, in turn, can affect hiring, R&D and innovation appetite.

For example, many mid-sized U.S. firms rely on 12-to-24-month investment planning cycles. When tariff schedules change quarterly — or even monthly — it becomes difficult to justify major spending commitments tied to international sourcing, manufacturing or product development.

Read the report: Tariff Uncertainty Craters Confidence to Zero at Exposed Consumer Goods Companies

The Shift Toward Defensive Strategy

The result of this volatility is a strategic repositioning from offense to defense.

Firms are prioritizing operational agility: deploying analytics to monitor supply risk, implementing flexible fulfillment systems and expanding local or nearshore supplier networks to minimize cross-border exposure. Investments once reserved for innovation or expansion are being diverted into contingency infrastructure.

One area where investment is still occurring is enterprise technology, but not necessarily in the service of innovation. Many mid-market companies are investing in data analytics, AI-enabled forecasting and supply chain visibility platforms — tools that enable rapid response to change rather than long-term transformation.

According to the PYMNTS report, a growing number of CFOs are implementing software systems that support scenario planning and tariff exposure modeling. These tools are designed to help firms assess how cost structures may change under different policy outcomes — and to adjust sourcing, pricing and inventory strategies accordingly.

At the same time, companies themselves are rethinking what resilience means. Increasingly, strategic agility is replacing efficiency as the core operational objective — a shift that may ultimately make mid-market firms more robust, but also more conservative.

Ultimately, if mid-market companies are to reengage with long-term innovation and global competitiveness, they will need consistency and clarity. Increasingly, they are giving themselves the tools to provide it.