Businesses Singing a Different Tune About Tariffs, But for How Long?

In the words of Anchorman Ron Burgundy, “that escalated quickly.”

A few months ago, corporations were offering a collective shrug when discussing the possibility that President Donald Trump’s tariffs would force them to raise their prices. Some of the biggest names in consumer goods recently told investors and customers that higher prices have now materialized. But will the tariffs last? Not if a federal appeals court has anything to say about it. On August 29, the U.S. Court of Appeals for the Federal Circuit ruled that most of the federal government’s global tariffs were an unconstitutional use of emergency powers.

When we last examined companies’ comments on the tariffs in May, most were expressing some version of a theme articulated by Amazon. Andy Jassy, president and CEO of the online retail giant, pointed out that the average selling prices of goods available on its site had yet to grow “appreciably.” Jassy did acknowledge at the time, however, that sellers would likely pass along the costs of the taxes on imported products by hiking prices in the future.

Recent commentary suggests that what was once anticipated is now reality, especially in the retail sector. For example, in August, Home Depot reversed course on its previous position that the tariffs wouldn’t produce material increases in the prices of the tools, construction materials and appliances it sells. The home improvement retailer’s chief financial officer, Richard McPhail, revealed during an earnings call that “modest” increases are coming for some items.

Earlier in the year, Walmart drew President Trump’s attention when CFO John David Rainey indicated the retail chain would be raising prices on some goods in the near future – a notable admission from a company that fiercely guards its reputation for “everyday low prices.” While strategic moves enabled Walmart to hold the line on some consumer goods, Rainey said last month the anticipated price increases had come to fruition in other categories. The fact that Walmart is raising prices should come as little surprise when you consider that purveyors of common household staples – companies like Hormel Foods, J.M. Smucker Co. and Procter & Gamble – are slapping higher stickers on their products. That trend also reflects factors such as tighter supplies of commodities.

But retailers aren’t alone in raising prices to combat the tariffs’ effects on their costs. Pointing to a “challenging economic environment,” electronics manufacturer Sony announced in August it is tacking an extra $50 onto the price of its PlayStation 5 gaming console. The price hike applies only to PlayStation systems sold in the United States. Meanwhile, rivals Microsoft and Nintendo have raised their console prices in the U.S.

Of course, overlaying all this is the August appellate court ruling, which may change everything. The court left the tariffs in place temporarily while the administration pursues an appeal to the Supreme Court, but the decision underscores the legal uncertainty hanging over trade policy. If the ruling stands, affected companies could seek refunds on past tariff payments, raising the stakes for corporate planning and financial reporting.

That news notwithstanding, a report released in August found that nearly a third of U.S. businesses will likely raise their prices by the end of 2025 in response to inflation and higher costs. According to the survey by online lending platform LendingTree, only 5% of U.S. companies are planning to cut their prices, while the remainder plan to stay in a holding pattern.

In this environment, which companies are cutting their prices? McDonald’s, for one. The home of the Big Mac announced in August it is slashing the cost of its combo meals, with the company promising financial support to its franchisees to fund the move. But even the McDonald’s gambit is indicative of the strain companies are currently facing. With consumers growing uneasy about the economic climate, fast-food chains have seen their traffic fall nearly 3% so far in 2025.

The willingness of McDonald’s to take a hit on its core menu items to get more customers in the door speaks to the creativity some companies have shown to keep prices in check. Although their efforts have helped to dampen the impact of inflation and the economic shock of the tariffs, it appears inevitable that those short-term fixes will give way to even more price increases in the coming months.