HSBC: Most Businesses Hit by Tariff-Driven Cost Upticks
The ongoing trade war is having a real impact on businesses worldwide, the majority of which are citing higher costs, according to an HSBC survey.
In an HSBC survey of global businesses, two-thirds of respondents claim to have already experienced cost increases due to tariff and trade uncertainty. 73 and 72 percent expect this trend to continue in the short and long term, respectively. Industries most likely to be affected include consumer (70 percent), healthcare (69 percent) and technology, media and telecoms (69 percent).
Revenues were also under pressure with an average decline of 18 percent. In the next two years, four out of five businesses expect revenues to shrink decline by 10 percent or more, with one-third expecting a drop of over 25 percent. Companies in the US were most pessimistic with 51 percent anticipating a revenue decrease of 25 percent or more.
85 percent of respondents indicated their businesses have already revised or are considering adjusting prices to reflect higher costs and market changes.
Still Optimistic
Despite the challenges, businesses remain confident with nearly 90 percent of respondents believing they will be able to grow internationally over the next two years. When asked about the impact of tariffs and uncertainty, 52 percent of businesses expect the changes to be positive over the next two years with India leading at around 80 percent.
«This survey highlights urgent risks arising from uncertainty, higher costs and squeezed income. Yet short-term anxiety and risk is being counterbalanced somewhat by long-term strategic positivity,» said Vivek Ramachandran, head of global trade solutions at HSBC.
HSBC’s Global Trade Pulse Survey is based on the business plans and sentiments of 5,750 internationally exposed firms across 13 markets including Bangladesh, France, Germany, Hong Kong, India, mainland China, Malaysia, Mexico, Singapore, UAE, UK, US and Vietnam. The responses were collected between April 30 and May 12 this year.