A recent poll reveals that many companies, especially in the US and China, believe the Trump administration needs to increase prices due to the removal of a variety of import duties.
The latest Allianz Trade Global Survey, which compares responses before and after the tariffs were imposed on what’s been dubbed “liberation day” on April 2, indicates that companies are likely to opt for price hikes as a response to the ongoing trade conflict.
Currently, while most mutual tariffs are on hold for negotiations, a baseline 10% tax remains in effect.
On a global scale, 38% of businesses report plans to raise prices in light of the tariffs, marking a 7% increase since the announcement of the new import tax by President Trump.
This inclination to increase prices due to elevated tariffs has been particularly pronounced worldwide, but it stands out significantly in the US and China, influenced by the notion that tariffs have become excessively burdensome.
Specifically, in the US, 54% of companies indicated their intention to raise prices, with 46% admitting they would do so prior to “liberation day.”
In China, 45% of firms reported plans to increase their prices following last month’s announcement, reflecting a 16% uptick according to the study.
The findings suggest that pricing adjustments in response to higher tariffs are even more imperative for companies in the US and China.
The new trade agreement has notably reduced the average US import tariff from a striking 103% down to 39%, yet this is still considerably higher than the 13% rate that was in place before the latter part of Trump’s presidency.
Despite recent developments, including a 90-day pause on most retaliatory tariffs between the US and China, experts believe the basic strategy will likely remain unchanged.
“Even with some recent encouraging news, the trade war persists, and ongoing trade volatility suggests that a decoupling between these two economies is likely to continue in the long run,” the researchers noted.
