Chat with anyone at the hardware store, grocery or pharmacy these days, and relentless price increases are bound to be a part of the conversation. The cost of virtually everything seems to be skyrocketing, and it’s unfortunately about to get worse. New data shows that, after months of strategic frontloading, critical warehouse inventories are rapidly depleting. The result? Consumers are about to shoulder an even greater tax burden as companies begin passing on the full cost of import duties.
The sweeping and unpredictable global tariffs have caused imports to drop 5.1% — putting them roughly in line with 2023 figures. The data, reflecting less than one month under the new tariffs, clearly illustrates how the sharp rise in trade taxes has "scrambled life for international business," as The New York Times reports. Meanwhile, U.S. exports also fell by $500 million, as the rest of the world bought fewer American goods.
Facing so much uncertainty, U.S. firms had clamped down on purchases of critical goods, including machinery, industrial supplies, pharmaceutical ingredients and others. This deliberate reduction in procurement followed months of stockpiling to beat the tariff deadlines, but now that inventory is running out, and the industry's ability to buffer import duties has reached its limit.
Goldman Sachs economists estimate that U.S. businesses had been absorbing a net 51% of tariff costs, while the American people were shouldering 37%, according to Fox Business. But the report goes on to say that consumers will pay 55% by the end of this year, while 22% will fall on businesses, 18% on foreign exporters and 5% on potential tariff evasion. In addition, the data shows that tariffs have pushed inflation nearly half a percentage point higher so far in 2025, and the trend is expected to continue in the months ahead.
Meanwhile, the U.S. trade deficit shrunk nearly 24% in one month. This drop might appear to accomplish one of President Trump’s main goals. However, economists caution that the steep fall is misleading, as it largely reflects extreme volatility caused by previous rushing of imports. In fact, the total U.S. goods and services deficit was still up a hefty 25% year-to-date through August, compared with 2024, demonstrating that tariffs have not dramatically reduced America’s propensity to import more than it sells abroad, per The Wall Street Journal.
Build resilience in a time of uncertainty
The implications are clear: The next phase of tariff-driven cost escalation is here, and it’s bringing a sustained period of financial pressure. Supply chain leaders must accelerate diversification of sourcing, expand visibility into multi-tier supplier networks and adopt more risk-balanced inventory models. This is also the time to reassess pricing strategies, negotiate collaboratively with suppliers and invest in predictive analytics to model cost exposure.
Workforce capabilities will play a decisive role. Supply chain teams need stronger skills in risk management, scenario planning and supplier collaboration to navigate this period effectively. Look to ASCM’s Training Solutions for customized education in multiple formats to fit your unique needs. Every program delivers practical skills your team can apply immediately to protect your network in this era of escalating global uncertainty.
