Companies Retreat From Price Hikes as Tariff Outlook Clears and Consumers Pull Back

Global companies are scaling back or shelving price increases as new US trade deals ease tariff uncertainty and consumer spending weakens, according to a Reuters review of third-quarter earnings calls and disclosures.

The shift marks a sharp reversal from earlier in the year, when firms in consumer goods, retail, and industrials cited escalating tariff costs and signalled aggressive price adjustments. Now, with clearer rules of engagement on US trade policy and mounting risks of losing price-sensitive customers, corporate pricing power is fading.

Retail giants including Walmart, Target, Home Depot and Lowe’s capped a pivotal Q3 earnings season by outlining divergent strategies to manage softer demand—ranging from widespread discounting to tighter cost control—after the protracted US government shutdown delayed federal benefits and froze economic data flows.

Price-Hike Mentions Have Collapsed

Reuters tracked 28 companies explicitly flagging tariff-driven price hikes since Oct 16, down sharply from 51 in Q2 and nearly 90 in Q1. Analysis from AlphaSense shows tariff-related price-hike mentions fell 68% from Q1 to Q3.

Many firms had initially warned of more than US$35 billion in potential tariff-related costs. But as new US trade deals reduced exposure to earlier Trump-era tariff shocks, executives now say the hit was smaller than feared.

Walmart incoming CEO John Furner said the retailer saw “less impact than expected”, while others emphasized the need to protect volumes rather than push through increases.

Retailers Absorb More Cost as Low-Income Consumers Strain

Retailers describe a widening gap between affluent shoppers and lower-income households. Companies such as Target are expanding holiday-season price cuts—3,000 reduced-price items this year versus 2,000 in 2024—to avoid demand erosion.

Fast-food chains like McDonald's, Domino’s and Yum Brands are increasingly relying on cheaper bundles to revive traffic. Deckers Brands warned that “the full impact of tariffs and price increases” will pressure US consumers in the back half of the year.

For some firms, taking price has backfired. Newell Brands, owner of Mr. Coffee, admitted its tariff-linked increases made it uncompetitive as rivals opted not to follow.

Not All Sectors Moving in Sync

Industrials and consumer companies led tariff-related pricing actions in Q2 and Q3, though many now report supplier pressure easing or being shared through the supply chain. Some firms plan selective Q4 pass-throughs, while others expect stabilizing price levels if tariffs remain unchanged.

Rockwell Automation expects modest pricing in 2026—1% underlying and 1% tariff-driven—while stressing it is not using tariffs “as a profit lever.”

Companies Want Tariff Stability Before Making Big Moves

Executives say the path forward depends heavily on clearer long-term tariff strategy. Many continue to rely on inventory pre-buys, supplier negotiations, and sourcing shifts to smooth costs and avoid repeated price adjustments.

Dave Evans, CEO of contract manufacturer Fictiv, summarized the corporate stance: “Companies are absorbing most of the impact or sharing it with suppliers. Many are avoiding large price increases until they know the tariff endgame.”