48% of Product Leaders Now View Tariffs as Permanent Policy Shift

Tariffs were expected to cause discomfort. Few product leaders expected them to reshape their operations so deeply that redesigning or discontinuing goods would become standard practice across the mid-market.

The latest edition of The Certainty Project, titled “Profit Slips, Policy Shifts: Product Leaders Navigate the Crossfire,” finds that companies are no longer treating tariffs as temporary turbulence. Instead, they are adjusting portfolios, forecasting models and supply strategies around the assumption that trade levies will define the landscape for years.

The report, based on a survey of heads of product at U.S. firms with annual revenues of $100 million to $1 billion, shows that tariff pressure now intersects with a second challenge: rising uncertainty over wage rules, tax policies, data privacy, cybersecurity and emerging oversight of artificial intelligence (AI). Together, these shifts are creating a more complicated environment than the headline numbers around consumer price sensitivity suggest.

Key data points include:
• 90% of goods firms raised prices over the past year, yet 75% still saw profit margins decline as costs rose and demand softened.
• 45% of goods firms now report high uncertainty about the impact of regulations ranging from labor rules to cybersecurity, up sharply from 12% a year earlier.
• 48% of all heads of product describe U.S. tariffs as a long-term policy shift rather than a short-term tactic.

The report presents a picture of companies that have reached the limits of price hikes. Goods and services firms alike say the past year brought weaker demand from business clients and consumers. That leaves product leaders little room to pass through higher costs tied to tariffs or broader macroeconomic volatility. Instead, they are turning inward, reworking existing products to cut material or operational costs or removing items from shelves entirely.

One quarter of goods firms discontinued tariff-exposed products, while one in five redesigned goods to use alternative materials. These shifts carry risks of their own, including thinner assortments, stockouts and brand erosion if customers encounter gaps in inventory.

Executives surveyed also report taking a more sober view of how long tariffs will remain embedded in U.S. trade policy. Even as negotiating positions shift, product heads say they cannot afford to plan around reversals. Larger goods companies, which tend to rely more heavily on foreign suppliers, report the sharpest operational strain as they manage higher input costs and seek viable substitutes.

Firms with clearer visibility into operations were more likely to describe tariffs as a long-term reality, suggesting a link between planning confidence and acceptance of the new policy environment.

Beyond tariffs, the study shows that regulatory uncertainty has fast become a defining concern. Goods firms cite labor and wage policies as the most significant risks, especially as states advance new minimum wage laws and federal enforcement actions reshape hiring practices. Services firms point to AI governance as their top source of uncertainty, reflecting how digital workflows and automation have become central to managing tariff-related disruptions. Across both sectors, firms facing moderate or high regulatory uncertainty were far more likely to report shrinking margins, indicating a compounding effect when policy unpredictability meets cost pressure and shifting demand.

These findings point to a business environment in which product leaders must navigate more than the direct costs of tariffs. They face a broader recalibration of rules that shape employment, data practices and long-term investment.

With both demand and regulatory clarity in shorter supply, firms are being pushed to rethink how they price, source and design products while preparing for further changes still to come. 

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