PwC’s US Tariff Industry Analysis: An update on the current impact to companies

What happened?

Since the introduction of reciprocal tariffs on April 2 (see PwC’s Tax Insight dated April 22 for more details), the trade policy landscape has continued to shift rapidly, driven by ongoing negotiations and public statements — including those made via social media and press conferences. On May 8, President Trump and Prime Minister Keir Starmer announced a historic trade deal between the United States and the United Kingdom — the US-UK Economic Prosperity Deal — that aims to level the playing field, prompting varying impacts across all industries. In addition, President Trump announced a trade agreement with China on May 12 that resulted in the United States reducing the Trump 2.0 tariffs on many Chinese goods from a peak rate of 145% to a baseline reciprocal rate of 10%, with an additional 20% tariff under the International Emergency Economic Powers Act (IEEPA) intended to address the fentanyl crisis. This agreement effectively brought tariffs on Chinese origin goods to 30% during a 90-day pause period (excluding Section 301 tariffs). These changes went into effect on May 14. Following two days of talks on June 9 and 10, the United States and China agreed to maintain reduced tariffs while committing to negotiate a broader trade framework over the next 60 days; the deal still requires approval from Presidents Trump and Xi Jinping.

If the June 9-10 negotiated deal or something superseding that agreement is not agreed to by the parties before the July deadline, then the previously announced reciprocal tariffs will be reinstated. Similarly, if other rest of world (ROW) countries do not reach agreements during the reciprocal tariffs pause, the baseline 10% rate for those imports likewise will be subject to increase to the reciprocal rates announced on April 2. The pace of change in the tariff space is challenging to manage, and the many varying rates and applications can lead to confusion. See the table below for a simplified visual representation to help clarify the various rates.

Following the China developments, on May 28 the US Court of International Trade ruled that President Trump exceeded his authority by imposing sweeping tariffs under IEEPA, stating that such broad tariff powers reside with Congress and not the executive branch. The court's decision, which consisted of a three-judge panel, permanently blocks key tariffs — including the 10% base import tax and higher rates on goods from China, Canada, and Mexico — while leaving in place separate tariffs on steel, aluminum, and automobiles enacted under other legal authorities. The Justice Department has appealed this decision and on June 10 the appellate court held that the tariffs could stay in place during the appeals process. Depending on the outcome, the Trump administration may have alternative mechanisms to keep the tariffs in place.

The outcomes of the administration’s reciprocal tariffs present significant implications for companies operating in or trading with the United States and challenges continue to arise for many multinational businesses, such as sourcing disruption and cost increases. These challenges are compounded with the uncertain tariff landscape going forward, as the administration crafts additional executive orders and continues to negotiate with its global trading partners. According to PwC’s May 2025 Pulse Survey (Pulse Survey), 73% of all respondents say tariff policies pose a moderate or serious risk to their company. Note: The Pulse Survey was conducted during the first week of May, before the United States and China agreed to suspend tariffs for 90 days.

Given concerns about tariffs, it is critical for executives to stay current on evolving tariff actions and potential changes that may materially impact their operations and planning.

Multinational companies around the world should continue to assess the impact of evolving trade policies on their global business footprints — with respect to both imports and exports — as well as the potential related opportunities. Aligning procurement, supply chain, tax, and other executive teams around short-, medium-, and long-term strategies, driven by robust data analysis, is critical. Specialized tools that use US customs data can help quantify those impacts, often revealing unexpected findings. This analysis can serve as a powerful foundation to identify “no-regret” actions and to help mitigate risks.

For more details, read the full Tax Insight linked below.