The Potential Effects of Increased U.S. Tariffs

Dun & Bradstreet’s Economic and Analytics Experts Explain What U.S. Trade Policy Changes May Mean for U.S. Businesses and Consumers 

Dun & Bradstreet analyses of the potential effects of increased U.S. tariffs, supply chain trends, and businesses’ optimism levels suggest a global economic environment at risk of weakening consumer demand and supply chain snags. 

In North America, U.S. tariff increases on exports from Canada and Mexico, which have remained largely duty-free since 1994, could lead to supply chain disruptions, inflationary pressures and reduced consumer spending power in all three nations. 

Nearly 55% of U.S. oil imports come from Canada, which means increased tariffs on Canadian oil could result in a ripple of inflationary pressures across the U.S. economy. Other commodities for which Canada is a key importer, providing at least 50% of U.S. imports, are zinc, which is commonly used to galvanize steel, and agricultural commodities. 

Increased tariffs on Mexico could result in higher U.S. food prices, as Mexico provides 62.8% of vegetables imported to the U.S. and more than half of its imported vegetable planting materials.

In the event of new trade barriers on U.S. exports, some exports may be rerouted to the domestic marketplace; however, it’s likely the prices of the domestically produced goods would still increase for American consumers, as firms in many industries use imports in their production processes, and increases in the price of imports as a result of tariffs will potentially increase domestic production costs. 

Supply Chain Impacts 

Dun & Bradstreet data shows businesses have been pivoting their supply chains away from China in recent years in response to tariffs and other disruptions, such as Covid-19 and the Russia-Ukraine War, and are bracing for further supply chain disruptions this year.

A Dun & Bradstreet survey of about 10,000 businesses globally found their optimism for supply chain continuity dropped 10.4% from Q4 2024 to Q1 2025.

“The biggest moderation in optimism was on export orders and inventory levels,” said Arun Singh, Global Chief Economist at Dun & Bradstreet. “This is unsurprising given that the survey was conducted at a time when speculation over potential trade policy changes from the new U.S. administration were high. That, coupled with ongoing challenges in supply chain recovery and labor market realignments, appears to have further dampened confidence among businesses worldwide.”

U.S. businesses reported a 3.6% decline in supply chain optimism for Q1, rising above global pessimism levels, due to their U.S. firms’ efforts to ramp up imports, stockpile raw materials, and shift toward local sourcing in anticipation of potential tariffs and trade disruptions. 

Large businesses in particular have shown resilience in supply chain continuity by capitalizing on economies of scale and diversifying their supply chains globally, with large U.S. companies’ optimism about supply chain continuity rising 33% quarter-over-quarter. 

Dun & Bradstreet Shipping Insights data shows publicly listed U.S. and U.K.-based companies have been shifting their supply chains away from exports from China and toward other south Asian countries since the imposition of new tariffs over the past decade. For example, half of large retailers received at least 50% of their foreign imports from China in 2014, but in 2023, only 36% depended on China for the majority of their imports.

U.S. small businesses’ optimism about supply chains rose 16% quarter over quarter, driven by their ability to adopt to local sourcing and relocate production bases with agility. 

Conversely, medium-sized U.S. businesses (51 to 250 employees) reported a 43% drop in optimism for the continuity of their supply chains, as they remain vulnerable to disruptions in the global value chain. 

“Dun & Bradstreet continues to look at the challenges that face our clients in the supply chain space and look for opportunities to help them pivot to become more resilient in this globally interconnected market,” said Robert Kirk, Head of Analytics, Global Product at Dun & Bradstreet. “Supplier due diligence and onboarding are key strengths for Dun & Bradstreet to add insight and information into the workflow by helping to identify meaningfully strong suppliers, vendors, and shippers.” 

The survey found global business optimism for supply chain continuity fell most sharply for: