Middle Market Businesses See Opportunities Amid Uncertainty
While many perceive uncertainty, middle market businesses are identifying potential opportunities. A recent survey from KeyBank highlights that most mid-sized companies are focusing on adapting to the fluctuating trade policies under President Trump. Interestingly, they see these challenges as a chance to improve their operations.
The survey revealed that 91% of U.S. companies with revenues between $25 million and $1 billion are strategizing to mitigate the effects of new tariffs. Simultaneously, a notable 92% believe these policies present avenues for innovation and restructuring.
“It’s clear that tariff management is a top priority for the majority,” stated Ken Gavrity from KeyBank. He expressed confidence in the insights gathered from company responses related to tariff management. “None of them mentioned halting their growth initiatives,” he added.
Since early April, the Trump administration has introduced, lifted, and modified a series of high tariffs impacting nearly 90 U.S. trading partners. The resulting costs and prevailing unpredictability have led many businesses to reconsider major investments, as noted by several banking CEOs.
Edward Barry, CEO of Capital Bank in Rockville, Maryland, commented last month that other banks are observing a decline in their loan pipelines compared to expectations earlier this year.
A recent HSBC survey found that 72% of American companies with revenues ranging from $50 million to $2 billion increased operational costs due to tariffs, with roughly three-quarters having suspended or reevaluated long-term investments amid policy uncertainty.
The research from KeyBank highlights that middle market companies also harbor similar worries. About 61% of respondents indicated that “clarity on U.S. economic health” is the key factor affecting their investment decisions.
However, unlike those surveyed by HSBC, many business leaders interviewed believe that tariffs could actually create market expansion opportunities. In fact, nearly half of KeyBank’s respondents (49%) viewed taxation as a potential catalyst for growth. This optimism was particularly pronounced among tech companies, with 68% seeing it as beneficial.
In response to the new tariffs, businesses are employing various strategies. The most common approach, adopted by 60% of companies, involves coordinating their supply chains. Additionally, 53% are passing costs onto customers, while 47% are shifting expenses to their suppliers.
KeyBank’s research notes that among larger firms, 88% with annual revenues between $500 million and $1 billion are investing in technology to enhance supply chain visibility, and 71% are expanding their supplier networks.
“These companies need a clearer understanding of their cost structures,” Gavrity remarked. “They have to adapt quickly, as the current environment is marked by stabilization, and it’s unclear when that might be achieved.”
KeyBank, a subsidiary of KeyCorp, is based in Cleveland and manages $189 billion in assets. Chris Gorman, the company’s CEO, highlighted concerns about new tariffs but maintained the financial guidance for 2025 had not changed.
“Recent developments have certainly influenced market sentiments and client attitudes,” Gorman noted in April. “Since the tariff announcements, we’ve observed a pause in clients’ trading activities as they await further developments.”
For their analysis, KeyBank surveyed 300 executives of medium-sized companies shortly after the Trump administration introduced most tariffs in May 2025, which resulted in several companies temporarily suspending their activities or defining exceptions for certain goods.
These medium-sized enterprises are essential players in the local economy and serve as valuable indicators for U.S. commerce, according to Gavrity. “These are businesses with $400 million in revenue, producing vital products we all utilize daily. While they may not be household names, they are significant contributors to GDP and employment.”
As such companies navigate through uncertainty, KeyBank is also feeling the effects.
“We’re still cautiously optimistic since our clients remain cautiously optimistic,” Gavrity concluded.
