The United States’ global tariff agenda is clouded with uncertainty, with levies against nearly all countries, including China, in constant flux. What is certain is the pace and scale of the reactions of middle-market goods and retail companies to the burgeoning global trade war. Each of the 60 senior product executives surveyed by PYMNTS Intelligence in early to mid-April reported that the duties had had at least some impact on their product development. For some firms, the effect is severe: One in four have changed their product design, pricing or market strategy, while another 14% have delayed or canceled product development.
The shifts signal broader disruption to companies’ strategic growth initiatives and near-term operational stability, with the share of mid-market goods and retail companies operating under what they call high uncertainty tripling since March.
Amid the disruption, these companies are embracing AI to help them handle sudden cost surges, demand volatility and supply chain disruptions. By adopting AI automations, some product leaders also plan to reduce their reliance on workers.
These findings highlight how product leaders are adapting to the uncertain business environment created by tariffs. This edition of the 2025 Certainty Project draws from a survey of 60 heads of product, chief product officers and vice presidents of product at U.S. goods and retail firms with annual revenues between $100 million and $1 billion, conducted April 3, 2025, through April 15, 2025.
Tariff Pressure Forces Delays and Overhauls of Product Plans
Nearly four in 10 goods firms have changed or scrapped product plans or market strategies over tariff volatility.
Tariffs are rapidly changing how companies plan, develop and produce existing and new products, from consumer electronics to clothing. Among goods firms, 100% of senior product executives report at least some impact. Some 38% say they have delayed, canceled or reworked product launches or market strategies outright.
The phenomenon isn’t isolated. Nearly one in four product leaders report switching up their product design, pricing or go-to-market strategy. The moves show how the near-term volatility of Trump’s policies is affecting long-term planning for middle-market firms, forcing a shift from a strategic posture to a defensive one.
The reactions are widespread. Just 10% of product executives surveyed report no impact. Just 5% say the levies have sped up their product plans.
Much of the disruption is tied to rising costs for goods and raw materials from foreign suppliers, as well as sourcing constraints, with smaller firms being less able than large ones to easily shift to alternative suppliers. Just over half (52%) of goods firms say they have had to modify their existing supply chains or absorb price hikes on imported materials and goods. The changes come as corporate executives and bank leaders, including Citigroup CEO Jane Fraser, warn that companies are waiting to make new investments and hire more employees until they’re more certain about the business and economic landscapes.
Goods and Retail Firms Shift Focus From Long-Term Bets on Technology to Short-Term Fixes
Tariffs push most firms to trade long-term technology strategies for short-term fixes.
The unfolding tariff regime is prompting firms to prioritize short-term problem-solving over long-term innovation. Among middle-market goods and retail firms, 81% of product executives say the levies have redirected their focus.
Their pivot is reshaping investment priorities. Nearly two in three goods and retail firms (63%) are accelerating their adoption of AI, using the technology to seek out more viable supply chains, reduce employee headcount or find lower-priced inputs. More than eight in 10 (81%) are now utilizing AI to optimize their foreign supply chains for reliability and efficiency. The moves are partly a transformation but mostly a defensive tactic.
Yet the picture remains uneven. While most product leaders say tariffs have triggered a tactical pivot, just 45% report accelerating their use of AI to offset cost increases directly, suggesting that many firms are still absorbing margin pressure rather than automating around it. Meanwhile, 31% say tariff-related uncertainty has constrained their ability to fund AI or automation projects at all. That figure rises to 47% among firms with low operational certainty, compared to just 7% among firms with high certainty. Investment decisions, in other words, reflect not just tariff exposure but how confidently firms believe they can cope.
The middle-market landscape is one where a sense of urgency about tariff impacts is nearly universal, but the capacity to respond varies sharply. Tariffs are accelerating digital adoption, but in staggered, risk-sensitive stages.
Confidence Among Goods Firms Collapses
Few product executives now feel confident in their company’s ability to handle tariff-related disruption.
After altering roadmaps and redirecting technology investments, many firms now face a deeper concern: lost confidence in the business climate. Just 5% of product leaders at goods firms say they feel highly certain of being able to manage tariff-related supply chain disruptions. That figure has collapsed precipitously from 37% in March and 40% in February.
The breakdown extends beyond goods firms. Confidence also fell among services firms. In February, 44% of product leaders at such companies said they felt very confident in their ability to adapt to tariff-related supply chain disruptions. The figure now stands at 33%.
Even firms with previously high operational certainty are showing signs of strain. In February, 38% of high-certainty product executives felt highly confident. By April, only 11% did. Among medium-certainty firms, the share plunged over this period from 40% to 27%.
Most striking is the shift in tone. “Slightly or not at all confident” responses are up sharply among high-certainty firms, from 46% in February to 56% in April. These companies will no doubt still do what they can, but they are no longer as sure they will succeed.
Tariff volatility means that confidence hasn’t just declined—it has eroded almost entirely for middle-market firms with the most at stake. Goods firms, already the most exposed to tariff impacts, now also feel the least prepared. Services firms, while slightly more resilient, are trending in the same direction.
Even as firms revise plans and deploy new tools, few believe they are equipped to weather what comes next.
After “Liberation Day,” optimism disappeared among goods firms.
April’s “Liberation Day” announcement of tariffs on nearly every country, framed by President Donald Trump as a strategic reset of the global trade system, left most goods firms even more pessimistic. For the first time, no product executives at middle-market goods firms expect a mostly or completely positive financial impact from tariffs. That share fell from 35% in February to zero in April.
Fifty-two percent of product executives in the goods segment anticipate a mostly or completely negative financial outcome. That figure has remained steady since March after expanding from 35% in February, signaling that “Liberation Day” failed to change sentiment. Instead of easing pressure, the policy update appears to have hardened existing views among those already most exposed.
By contrast, services firms showed modest gains in optimism. The share of services executives expecting a positive impact rose to 40% in April from 25% in February. This divergence reflects the structural differences in tariff exposure between services and goods-based businesses—services are less dependent on cross-border supply chains and imported inputs, even though the goods firms they work for are.
Curiously, product executives operating with high levels of uncertainty have become somewhat more optimistic over time. The share expecting a mostly or completely negative impact from tariffs contracted to 39% in April from 54% in February. Meanwhile, the share anticipating a positive financial impact has remained relatively steady since February.
While tariff policy remains unclear, one thing is certain: For goods firms—saddled with the most direct exposure to tariffs—confidence in a positive outcome has disappeared entirely.
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Methodology
This edition of the 2025 Certainty Project, “Heads of Product Split Over How to Handle Tariff Volatility,” is based on a survey conducted from April 3, 2025, through April 15, 2025. It examines perceptions of uncertainty surrounding the volatile trade and macroeconomic environment, with a focus on U.S. tariffs and how middle-market companies are managing the related risks. The survey collected responses from 60 chief product officers, senior vice presidents of product and heads of product at U.S. goods and retail companies with annual revenues between $100 million and $1 billion.
