Tariffs at tipping point: How the trade war is impacting business strategy

As global trade tensions escalate, tariffs have emerged as one of the most disruptive forces facing businesses today. More than a short-term policy challenge, tariffs are reshaping supply chains, pricing strategies, and investment decisions across industries.

The latest research brief from the Capgemini Research Institute, Tariffs at tipping point: How the trade war is impacting business strategy, explores how organizations are adapting to the new trade environment – by leveraging AI, rethinking global manufacturing, and reconfiguring supply chains to stay competitive.

The research brief’s insights are drawn from a June 2025 global survey of 1,500 executives in organizations from 18 countries and across 14 industries, with annual revenue of $1 billion and above. Key findings include:

• Business confidence is eroding: Optimism for the next 12–18 months has dropped to 34%, with nearly half of leaders fearing a tariff-induced global recession.
• Revenue and profit under pressure: Around 50% of organizations expect a ~10% decline in revenue and profit due to tariffs – prompting cost-cutting and pricing adjustments.
• Supply chains are being rebuilt: 75% of organizations are reconfiguring supply chains, with many stockpiling inventory to hedge against trade risks.
• Manufacturing is shifting geographically: 48% of organizations plan to expand manufacturing in the US, while 37% plan to scale back in China.
• AI is emerging as a strategic tool: Over 60% of organizations are using or testing AI to manage tariff complexity, and more than half are investing in agentic AI.

Tariffs at tipping point offers a cross-functional view of how organizations are responding to trade-related disruption – and how they can build resilience in an increasingly complex global economy. The research brief will be relevant to a diverse group of stakeholders responsible for navigating the complexities of international trade, including C-suite leaders, supply chain and procurement professionals, and trade compliance and legal executives.

To explore how leading organizations are adapting to the new trade landscape, and how businesses can position their strategies to remain competitive, download the research brief today.