Most companies, especially in the U.S. and China, say they will have to increase prices because of the Trump administration’s sweeping tariffs on dozens of imports, according to a new poll.
The latest Allianz Trade Global Survey, which was released Wednesday and compares responses from before and after Trump’s “Liberation Day” tariffs were imposed on April 2, found that price hikes will likely be the go-to strategy in response to the trade war.
Most reciprocal tariffs are currently under a pause due to negotiations, but a 10 percent baseline tax is still in play.
Globally, 38 percent of companies say they will increase prices in response to the tariffs — a seven percent increase from before President Trump announced the new import taxes, the report shows.
The strategy to raise prices because of higher tariffs saw the strongest global increase, but most notably in the U.S. and China, which Allianz Trade said is likely due to “the fact that tariffs reached levels that were way too high to stomach.”
In the U.S., 54 percent of companies said they plan to increase prices, citing the tariffs. Ahead of the “Liberation Day” rollout, 46 percent of U.S. companies said they would raise prices, according to the survey.
In China, 45 percent of companies said they will raise prices after last month’s announcement, a 16 percent increase, the research found.
The increase, according to Allianz, suggests that the U.S. and China “could be particularly
proactive in adjusting their pricing strategies in response to higher tariffs.”
“Even though the new trade deal brings the U.S. average import tariff rate on China to 39 percent, down from an eye-watering 103 percent, this remains much higher than the 13 percent rate applied before the second Trump administration,” said Françoise Huang, Senior Economist for Asia Pacific and Trade at Allianz Trade.
Despite recent developments between the U.S. and China, including a 90-day pause on most retaliatory tariffs, experts said the strategy will likely remain the same.
“Despite the recent positive developments, the trade war persists and volatility in trade
policies means that decoupling is likely to gradually continue,” researchers wrote.
