NETSTOCK RESEARCH
Tariff Impact Report 2026:
One year in: How U.S. SMBs are navigating the new tariff reality
Introduction
2026 has been full of major tariff-related developments, such as the February ruling by the Supreme Court and the escalating tensions around the Strait of Hormuz starting in March. Through it all, a baseline 10% tariff has remained in effect, providing a consistent pressure on small and midsize businesses (SMBs) to operate on thinner margins during a period of structured volatility.
At the time of our first Tariff Impact Report in May of last year, tariff concerns were largely anticipatory; nearly two-thirds of SMBs expected moderate or major disruption, while almost half reported having never implemented a tariff mitigation strategy previously. The prevailing posture was cautious: most were watching, waiting, and searching for clarity within their own inventory and supply chain projections as tariff deadlines approached.
This report reveals what that year of sustained pressure has produced. Drawing on new survey data from Netstock’s customer base, compared against findings from two earlier publications – the 2025 Tariff Impact Report (May 2025) and the 2025 Supply Chain Benchmark Report (Oct. 2025) – it provides a first-hand look at the evolution of tariff mitigation strategies, the role of technology in forecasting and supplier decisions, and the sentiment of U.S.-based SMBs heading into the second half of 2026.
Our findings point to a sector undergoing active transformation on multiple fronts. Facing sustained cost challenges and ongoing disruption, SMBs have responded with material changes to their tariff toolkit, within inventory planning, forecasting, sourcing, and product profitability. The scale of these changes over the past 12 months has been significant, and continues to evolve.
The tariff landscape one year later: impact is up, and cost remains the central challenge
A year ago, concern over tariff impact was largely anticipatory, with 63% of SMBs expecting moderate or major disruption according to the 2025 Tariff Survey. The 2026 data suggests that concern was well-founded.
Today, more than half of SMBs report that the tariff impact on their supply chain is greater than it was 12 months ago. Within that group, more than 20% describe it as “much greater.” The anticipated disruption has arrived, and for most businesses, it shows few signs of easing.
For supply chain leaders, tariffs have become a persistent operational consideration. The businesses reporting improvement (21%) offer a useful signal: tariff impact is not uniform, and the strategies those businesses have deployed, explored in Sections 3 and 6 of this report, may offer a roadmap for those still facing escalating pressure.
Figure 1. | Compared to 2025, how would you rate the impact of tariffs on your supply chain today?
Q: Compared to 2025, how would you rate the impact of tariffs on your supply chain today?
The underlying driver hasn’t changed either. In 2025, 70% of SMBs cited increased costs as their top tariff concern. This year, 72% cite cost-related challenges, with increased landed costs leading at 56%, followed by margin pressure at 16%.
The appearance of margin pressure as a distinct category is notable. It suggests that tariff costs are not simply being absorbed or passed through in full, but are settling into a gray zone where businesses bear some of the burden while pushing the rest downstream. The result is thinner margins on both sides of the transaction, a dynamic that makes accurate cost visibility and pricing intelligence increasingly important.
Figure 2. | What is the biggest tariff-driven challenge you are facing today?
Q: What is the biggest tariff-driven challenge you are facing today?
Key finding: Cost as the #1 issue held virtually flat year over year (70% to 71%), but the 2026 data reveals margin pressure (16%) as a distinct second-tier pain point. Tariff costs have landed and are compressing profitability even after businesses take action to offset them.
The cost pass-through: how tariff pressure is moving through the supply chain
The 2025 Benchmark Report found that 44% of SMBs were absorbing tariff costs internally, prioritizing customer retention over immediate margin protection. After more than a year of sustained pressure, compounded by broader global disruption and volatility, that approach appears to have become fiscally unsustainable for most businesses.
Today, 82% of SMBs report that tariff-related cost increases have led them to pass costs on to customers. The primary mechanism is direct price increases, cited by 92% of respondents. Surcharges, reduced discounts, and product mix adjustments play smaller roles.
Figure 3. | How were these costs passed on?
Q: How were these costs passed on?
The shift from absorption to passthrough is now seemingly less a strategic choice and more a financial necessity. However, it creates a secondary challenge worth monitoring: when more than 8 in 10 SMBs raise prices, the cumulative effect moves through the supply chain. As prices rise, demand patterns may shift. Customers who absorbed cost increases last year may pull back orders this year. Monitoring those shifts, and adjusting inventory and procurement accordingly, becomes a critical capability, one that ties directly to the analytics and planning themes explored later in this report.
Behavioral trend to watch: The move from cost absorption (44% in 2025 Benchmark data) to cost passthrough (82% in 2026) is a notable pricing shift that customers across the supply chain may increasingly see this year. As tariff costs reach end buyers, the downstream effects on demand patterns become an important area to monitor, and a reason to invest in demand sensing capabilities that can detect shifts early.
From reactive measures to active strategies, SMBs are taking a multi-pronged approach
A year ago, more than half of respondents (57%) cited a “wait and see” strategy for tariff uncertainty. Given that 47% hadn’t previously implemented strategies to manage tariffs in their supply chain, the cautious posture made sense. Operating under tariff turbulence was new territory for most SMBs.
The 2026 data reflects a significant shift. Only a year into operations amid cyclical tariff volatility, the SMB sector has almost entirely moved to proactive mitigation measures. Less than 3% of respondents report no active strategy, and nearly 6 in 10 are deploying two or more simultaneously. The wait-and-monitor approach has dropped from 57% to 21%, the sharpest single decline across any strategy tracked in the dataset.
Figure 4. | Which tariff mitigation strategies are you actively using today?
Q: Which tariff mitigation strategies are you actively using today?
Given the speed at which recent tariff events have unfolded, pricing adjustments and safety stock changes are strategies SMBs can execute within a shorter, more responsive window, which likely explains their higher adoption rates. As these shorter-cycle strategies reach their limits, the businesses that have also invested in longer-term structural changes, such as supplier diversification and scenario planning, may be better positioned for sustained tariff exposure.
The 2025 Tariff Survey found that 47% of SMBs had never implemented a tariff mitigation strategy, and an additional 29% had tried but faced significant challenges. The chart below shows what businesses were considering at that time, compared to what they are actively executing today.
Figure 5. | Which strategies are you considering to address potential tariff impacts?
Q: Which strategies are you considering to address potential tariff impacts?
In three of four comparable categories, the “actively using” rate in 2026 tracks closely against the “considering” rate from 2025, reflecting a broad conversion from planning to execution across the SMB sector.
Key finding: The wait-and-see approach dropped from 57% to 21%, the sharpest decline of any strategy. In three of four comparable categories, the “actively using” rate in 2026 tracks closely against the “considering” rate from 2025, reflecting a broad conversion from planning to execution across the SMB sector.
Sourcing under pressure: the tariff map is widening, and supplier networks are shifting
Tariff pressure is not contained to a single trade relationship. Nearly half of SMBs now report impacts from two or more sourcing regions simultaneously, a compounding exposure that adds complexity to procurement decisions already under cost pressure. For businesses accustomed to managing a single primary supplier relationship, this multi-front exposure represents a fundamentally different planning challenge, one that requires broader visibility into cost, lead time, and risk across the supplier base.
74% of SMBs identify China as their most-impacted sourcing region. Europe follows at 30%, Southeast Asia at 25%, Mexico at 17%, Canada at 10%, and Latin America at 9%. India, not a standard option in the survey, appeared as a write-in from 8% of respondents. While geopolitical developments, such as tensions around the Strait of Hormuz, have drawn heightened attention to other supply chain choke points and sourcing corridors, China remains the central tariff-driven sourcing challenge for U.S.-based SMBs.
Figure 6. | Which sourcing regions are currently most impacted by tariffs?
Q: Which sourcing regions are currently most impacted by tariffs?
One in three SMBs changed suppliers in the past year
35% of respondents have changed suppliers due to tariffs in the past 12 months. Cost increases were the primary driver (44% of those who switched), followed by country-of-origin risk at 26%, supplier reliability issues at 15%, and tariff-driven lead time changes at 11%.
Figure 7. | What was the primary reason for changing suppliers?
Q: What was the primary reason for changing suppliers?
Cost remains the top trigger for switching, but the fact that country-of-origin risk now drives more than a quarter of changes suggests SMBs are increasingly building for resilience, not just reacting to price.
In the 2025 tariff survey, 58% of SMBs were considering supplier diversification as a strategy, and 57% reported no investment constraints that would prevent them from switching. The 2026 data indicate that a meaningful portion of those open to switching have now acted. But the gap remains significant: one in three SMBs changed suppliers in the past year, while two in three have not. The structural barriers to switching, including cost, lead time risk, and the capital required to qualify new suppliers, remain substantial for many businesses.
Key highlight: Of those managing tariff impacts across multiple sourcing regions, a third have already changed suppliers, and 43% cite supplier diversification as an active strategy. As sourcing challenges compound across geographies, SMBs are building new supply lines, even when it means searching within new geographies.
Planning for the long haul: tariffs are extending the planning horizon
Sustained tariff exposure is reshaping not just what SMBs buy, but how far ahead they plan to buy it. Nearly three-quarters of SMBs (73%) say tariff uncertainty has pushed them to plan their inventory further out than before, with 29% noting the shift has been significant and 44% reporting a more modest extension.
Figure 8. | Has ongoing tariff uncertainty changed how far ahead you plan your inventory?
Q: Has ongoing tariff uncertainty changed how far ahead you plan your inventory?
The 2025 Benchmark Report found that 62% of SMBs showed signs of insufficient forward planning, defined as businesses sitting on slow-moving inventory or continuing to replenish items already in excess, resulting in sluggish stock turns and tied-up working capital. Whether longer planning horizons translate into better inventory outcomes will depend on the quality of the data and tools informing those plans.
This is an area where the difference between extending a timeline and improving a process matters. Planning further out with the same inputs, the same assumptions, and the same tools simply pushes uncertainty further into the future without resolving it. Businesses that pair extended horizons with better demand signals, more frequent replanning cycles, and scenario modeling capabilities are more likely to see their planning improvements reflected in actual inventory results.
Behavioral trend to watch: 73% of SMBs have extended their planning horizon, but the 2025 Benchmark Report showed 62% were still under-planning based on actual inventory results. The gap between “planning further ahead” and “planning effectively” is where the right analytics and demand sensing tools become critical.
Building the tariff toolkit: how data and analytics adoption is accelerating across SMBs
The need for data and analytics is a key takeaway from the 2026 survey. SMBs relying heavily on analytics more than doubled, from 8% to 19%, while non-users fell from nearly a quarter of respondents to just 7%. The direction is clear: SMBs are moving up the analytics adoption curve, and doing so at an accelerating pace.
This growth matters because many of the tariff mitigation strategies identified in Section 3 are most effective when grounded in data. Safety stock adjustments require accurate lead time and demand variability inputs. Scenario planning depends on the ability to model cost and sourcing alternatives. Even the decision to pass tariff-related price increases on to customers benefits from cost visibility that can limit customer impact while maintaining the margins and inventory levels needed to avoid stockouts. Data and analytics are increasingly a core part of the tariff toolkit, not a separate exercise.
The 2025 Benchmark Report found that AI adoption for general inventory management doubled from 23% to 48% in the same period, with 49% planning further investment. The acceleration in tariff-specific analytics usage tracks with that broader trend, suggesting that the tools are available and that SMBs are increasingly connecting them to the specific challenges tariffs create.
Figure 9. | How do you leverage data and analytics tools to navigate trade-related uncertainties like tariffs | 2025 vs. 2026 tariff survey
Q: How do you leverage data and analytics tools to navigate trade-related uncertainties like tariffs | 2025 vs. 2026 tariff survey
YoY changeup: This is the single largest behavioral shift captured across both survey years. Heavy analytics users more than doubled (8% to 19%), the moderate middle jumped 21 percentage points (34% to 55%), and non-users collapsed from nearly a quarter of respondents to just 7%. SMBs are increasingly treating data and analytics as part of their tariff response, not separate from it.
The refund question: what’s at stake?
When asked how a hypothetical tariff refund would affect their operations, 49% of respondents described the impact as “meaningful” or “game-changing.” Another 34% called it “helpful.” Only 3% said it would be negligible.
Figure 10. | If you were to receive a tariff refund, how would you characterize the financial impact on your operations?
Q: If you were to receive a tariff refund, how would you characterize the financial impact on your operations?
This question, new to the 2026 survey, provides a direct measure of the financial weight tariffs carry for small and midsize businesses. As policy discussions around tariff adjustments, exemptions, or refund mechanisms continue to develop, this data point quantifies what’s at stake for the SMB sector. Nearly half of SMBs are telling us that the cumulative tariff burden is material to their financial health, not a minor line item, but a pressure that shapes investment decisions, hiring, and growth.
Key highlight: 82% of SMBs feel more prepared than a year ago, a strong signal that a year of operating under tariff pressure has resulted in Main Street understanding how to operate under adverse conditions. But 49% say a tariff refund would meaningfully change their financial position, a reminder that operational readiness and financial sustainability are not the same thing.
What the rest of 2026 may have in stock for SMBs
A year of operating under tariff pressure has produced a more experienced and responsive SMB sector. That adaptation is measurable. 82% of respondents say they are better equipped to respond to tariff disruptions than they were 12 months ago, with 36% describing themselves as “much more prepared.” 18% report no change.
Figure 11. | Compared to 12 months ago, how effectively can your organization respond to tariff disruptions?
Q: Compared to 12 months ago, how effectively can your organization respond to tariff disruptions?
Compared to the 2025 baseline, where 47% of SMBs had never implemented a tariff strategy and only 24% had done so successfully, the movement is significant. 97% now have at least one active strategy in place, analytics usage has more than doubled, and businesses have made concrete moves across pricing, supplier networks, and inventory parameters.
The SMBs that pulled ahead this year did so by building systems that let them act faster and with more precision: demand sensing to detect shifts early, scenario planning to model alternatives, analytics that connect cost visibility to procurement and pricing decisions. The ones that hold the line going forward will be those that keep innovating, implementing strategies that enable short-term control and long-tail supply chain resilience.
