The port of Long Beach near Los Angeles California. Credit: ADLC/Shutterstock.com
A majority of American businesses, and 38 per cent of European and Chinese companies are preparing to raise prices in the coming months as the impact of President Donald Trump’s sweeping tariffs reverberates through the global economy. According to a new survey by Allianz Trade, 54 per cent of US companies say they plan to hike prices to offset the rising cost of imports, while only a small fraction—just 15 per cent—intend to absorb those additional expenses themselves.
A new survey by Allianz Trade paints a stark picture of global business sentiment in the wake of “Liberation Day” – the term now widely used to describe 2 April 2025, when former US President Donald Trump’s administration announced a sweeping escalation in tariffs against China.
The findings are part of a broader picture painted by Allianz’s spring survey, which canvassed around 4,500 firms across nine countries—including the US, China, Germany, and France—between March and April 2025. Globally, 38 per cent of respondents said they expect to raise prices in response to tariffs, with US and Chinese firms leading the way.
Price hikes, pushed costs and Incoterms shifts
Globally, businesses are trying to offload rising costs. In the US, 54 per cent of firms say they will raise prices, up from 46 per cent before the tariffs. Meanwhile, sourcing from alternative markets is gaining ground, particularly in Spain and Poland.
Few are willing to absorb the costs directly. Just 22 per cent see this as viable — a figure that has dropped further in the US, France and Italy since April.
New purchasing terms are also emerging. Many buyers are now insisting on “Delivered Duty Paid” contracts, shifting customs and logistics costs onto sellers. The US remains an outlier, with “Cost, Insurance & Freight” still dominant.
Firms are also spreading currency risk: 59 per cent have introduced pricing clauses that tie contract values to FX movements, allowing them to share volatility with clients and suppliers.
A blow to exporters’ confidence
Before “Liberation Day”, only 5 per cent of exporting companies expected a downturn in turnover. Now, 42 per cent are bracing for declines of between 2 per cent and 10 per cent over the next year. Close to 60 per cent of surveyed firms anticipate a negative impact from the new round of US-China hostilities.
Export optimism has collapsed: fewer than half of firms expect export growth, down from 80 per cent just weeks ago. In addition, more than a quarter (27 per cent) warn that currency volatility, in combination with higher tariffs, could force temporary production halts, while a third are planning to halt imports or offshore operations to manage rising costs.
Investment strategies diverge sharply
The trade war has also shifted investment priorities. In Germany, 45 per cent of firms now favour cost-cutting and efficiency, while Chinese companies are taking a more expansive approach: 77 per cent are channelling funds into strategic diversification and new business lines.
This divergence underscores the asymmetric impact of the conflict: while Western firms are retreating to protect margins, Chinese companies appear to be using the crisis as an opportunity to reposition.
Payment delays and rising default risk
Exporters are also facing mounting cash flow problems. Half now expect payment delays exceeding seven days — a 13-point increase post-“Liberation Day”. In Italy and Poland, the figure is even more severe, with concern jumping by 23 and 26 points respectively.
Only 11 per cent of export firms now receive payments within 30 days. Larger corporations, particularly those with turnovers exceeding €5 billion, are especially vulnerable, with a quarter facing payment terms over 70 days. Sectors such as retail, agriculture and manufacturing are bearing the brunt, with SMEs particularly exposed. Unsurprisingly, fears of non-payment are spreading. Nearly half of all exporters expect payment defaults to rise, particularly in the US, UK and Italy.
American firms frontload and reroute
While a temporary trade deal has cut the average US tariff on Chinese goods to 39 per cent from a previous peak of 103 per cent, this remains triple the rate in place before Trump’s return to office. The result? Strategic frontloading.
Well before the tariffs were formally announced, 79 per cent of US firms began accelerating imports from China, especially in agriculture, machinery and metals. Now, rerouting is the preferred mitigation strategy, with 62 per cent of American firms exploring alternative shipping lanes — aided by a nearly 50 per cent drop in freight costs since January.
The global race to diversify
Companies are not standing still. One in three has already found new markets for exports and supply chains, and nearly two-thirds plan to follow suit. For US firms, the pressure is acute: 60 per cent with overseas production have already relocated, driven by heightened exposure and longer supply chains.
Geopolitical instability is now seen as one of the top three risks to global supply networks. Even before the latest tariffs, 34 per cent of firms had shifted or planned to shift offshore production, with 59 per cent preparing for more change.
The decoupling continues, despite a truce
While the 90-day pause between the US and China offers a brief reprieve, it has not changed strategic direction. Chinese firms are increasingly distancing themselves from North America, favouring relocation to Asia-Pacific and Western Europe. Notably, all surveyed Chinese firms with North American supply chains said they intend to relocate — up from 79 per cent before April.
On the other side, American companies are also adjusting. Preference for relocating to Western Europe has more than doubled, from 11 per cent to 25 per cent, while interest in Latin America has risen from 9 per cent to 25 per cent. Asia-Pacific, once a prime destination, now sees reduced interest (down from 61 per cent to 34 per cent).
This realignment has already hit trans-Pacific trade. US firms’ intention to export to China and East Asia dropped by 11 points. Chinese interest in North America plummeted from 15 per cent to just 3 per cent.
Friendshoring and the Latin American exception
Amidst the geopolitical turbulence, new alliances are forming. Europe is becoming a preferred trade partner for both Chinese and European exporters. Chinese firms are increasingly targeting Europe for exports, while EU-based companies are doubling their interest in South and Southeast Asia.
German firms, once eager to exit China, are showing more willingness to remain. The share planning to relocate dropped from 67 per cent to 50 per cent, with Asia-Pacific becoming the top relocation destination for those currently exposed to North America.
Latin America, meanwhile, is quietly becoming a key beneficiary. For Chinese firms, interest in the region has tripled, offering a tariff-friendly backdoor into the US. European firms, too, are showing greater interest, with perceived export opportunities in Latin America rising by 6 points.
Volatility is the new normal
The Allianz Trade survey paints a clear picture: the trade war has set irreversible changes in motion. “Liberation Day” may have marked a return to aggressive US protectionism, but for the global business community, it has ushered in an era of strategic reshuffling. Rerouting, diversification, friendshoring — these are no longer contingency plans but core strategies.
As tariffs rise and geopolitical tensions deepen, firms are adapting quickly — and the new trade map is being redrawn before our eyes.
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