Why tariffs are more than a pricing strategy problem

When the U.S. announced the implementation of tariffs on April 2, 2025, it sent shock waves throughout the national and global business community, leaving many leaders increasingly uncertain — and wary — about their future, further illustrated by the significant drop in the U.S. stock market.

While tariffs are neither net new nor totally unexpected, what’s changed is their impact on CEOs’ thinking. Vistage’s most recent CEO Confidence Index survey, which was conducted the first two weeks of March before the tariffs went into effect, found that nearly 2 in 3 (69%) business leaders expected the new tariff and trade policies would hurt their business.

Another major impact?

Price increases, of course. The playbook for dealing with tariffs has not changed radically over time. Leaders of impacted businesses must readjust their pricing strategy, rethink their supply chain, and arm and prepare their customer service and salesforce to deal with the inevitable customer objections. And many leaders have already begun preparing accordingly.

Nearly half (44%) of our CEO survey respondents noted they have already increased their prices since the start of 2025, and even more (51%) expect to raise prices over the next 3 months. Of those increasing prices, 13% are planning hikes of more than 10%. However, while the direct impact of tariffs is price increases, the bigger problem is the mass uncertainty that the “Mr. Miyagi” approach to tariffs (tariffs on, tariffs off) has yielded.

This lack of clarity regarding what’s next has already begun to paralyze CEOs, making it increasingly difficult to plan and forcing them into an even more conservative position. With so many factors at play, the business community is generally at a loss when it comes to predicting how the tariffs will continue to change and evolve over time.

We can anticipate that these price increases will compound to rapidly accelerate inflation, in addition to the likelihood of reciprocal tariffs in the form of tariffs on U.S. goods being exported or even the possibility of consumers in other countries deciding to boycott American products. Beyond the higher costs businesses will have to charge for goods and services, it’s these potential far-reaching impacts that are keeping CEOs up at night.

Amid so much complexity, one clear thing is that turning up the dial on prices alone cannot serve as the holistic solution to navigating tariffs. Pricing increases do not address the long-term implications of uncertainty, unpredictability and instability, all of which are making conducting business and leading an organization exponentially more difficult.

As a result, we can expect to see leaders begin to make more drastic moves, such as reductions in hiring and decreases in business investments. The labor market will absolutely be impacted. And as consumers drive two-thirds of the economy, CEOs will have to navigate longer sales cycles and consumers’ reluctance to spend money due to a lack of confidence in the labor market.

These changes will likely impact the economy in other ways, too. Business investment accounts for nearly 18% of the economy, and as CEOs and businesses become more conservative and reduce investments, we’ll see that soften. Meanwhile, government spending accounts for another 17% of the economy, and with the reductions in government spending already taking place, we can expect that part of the economy will take a hit, too.

So while, at a surface level, tariffs may look like a pricing strategy problem for CEOs, the anxiety our CEO Confidence Index picked up on indicates the larger issue at hand. While we have a tried and tested playbook for navigating tariffs, the real trouble with tariffs lies in the uncertainty, instability and unpredictability that is making CEOs more conservative, more cautious and less optimistic.

This story first appeared in Inc.

Related Resources

The CEO Pulse: Tariffs Resource Center

Uncertainty returns CEO confidence to pre-election levels [Q1 2025 CEO Index]

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