Tariff Turbulence Splits Middle Market as Confidence Rises

The latest PYMNTS Intelligence Certainty Monitor shows U.S. middle-market firms straddling two realities: They are more confident than they were in the spring about adapting to tariff-driven supply disruptions, yet most still report shrinking margins and tougher planning horizons. Executives remain sharply divided on whether “America First” trade policies will strengthen or weaken the economy, but nearly all are responding via a range of actions, including raising prices, renegotiating with suppliers and reconfiguring sourcing strategies. The result is a business landscape where adaptation is widespread and optimism is creeping back, but uncertainty continues to weigh heavily on investment decisions.

Policy Split

Roughly half of middle-market executives still say an “America First” trade stance will hurt the U.S. economy, with views essentially unchanged since spring—a reminder that tariff policy remains a swing factor for demand planning and credit risk models.

Strategy Horizon

Nearly half of heads of product view tariffs as a long-term feature of the business operating environment. Goods firms are less convinced, and executives who see tariffs as beneficial are roughly twice as likely to view them as a strategic shift, rather than a short-term tactic—a crucial signal for pricing roadmaps and multiyear capex.

Universal Tariff Response

Tariffs are no longer theoretical: 100% of goods sector firms report implementing at least one response to new U.S. import tariffs. This is a full coverage operational pivot that lenders and payment providers should expect to shape working capital needs and supplier terms.

Pricing Moves

The most common actions are price-led and procurement-focused: 29% of middle-market companies increased product or service prices, and 21% renegotiated with suppliers. Others discontinued tariff-affected SKUs (18%) or built domestic supply (14%)—evidence of workarounds paired with sourcing shifts.

Tariff Sentiment Balance

Tariff sentiment has moderated. A new middle ground has emerged, with many middle-market firms now expecting impacts to be equally positive and negative. Among goods firms, roughly one-quarter now anticipate mostly negative outcomes—less than half of April’s share—tempering worst-case stress scenarios.

Tariff Confidence Rebound

Adaptation confidence is back. Seventy-five percent of executives express at least some confidence in handling tariff-related supply disruptions. Among high uncertainty firms, confidence rose from just over 50% in April to roughly two-thirds in July. The increase is supportive for inventory financing and supplier risk appetite.

Margin Pressure

Even with tariffs in the macro mix, seven in ten firms raised prices, yet roughly six in ten reported profit margin declines. This underscores limits to mitigation strategies and the need for tighter cost control and smarter pricing analytics.

Conclusion

Taken together, the data underscore a middle market that is learning to live with tariffs as an entrenched feature of the operating landscape. While cost pressures and planning challenges persist, executives are increasingly confident in their ability to adapt, and most have already reshaped pricing and sourcing strategies to offset the shocks. The net result is a business environment defined less by paralysis and more by pragmatic recalibration, in which survival hinges not on waiting out uncertainty, but on building resilience within it.