Midsize U.S. firms now carry a much heavier tariff load, and fresh JPMorganChase analysis puts hard numbers behind that strain.
Over the past year, import taxes paid by these companies have tripled. As a result, thousands of middle-market businesses have scrambled to adjust pricing, staffing, and sourcing strategies.
While policymakers argue over trade policy, companies with 48 million employees confront real cost pressure every day.
The JPMorganChase Institute examined payment data from firms earning between $10 million and $1 billion in annual revenue. Most employ fewer than 500 workers. Because these companies lack the pricing power of global giants, they often feel policy shocks more quickly. At the same time, they can pivot supply chains faster than massive corporations.
According to Chi Mac, who leads business research at the institute, the increase marks a sharp shift in operating costs. He noted that companies now face a meaningfully different expense structure. In addition, early signals suggest that some firms have started redirecting transactions away from China and toward other Asian markets.
That shift matters. Payments flowing to China fell roughly 20% compared with October 2024 levels. However, analysts still question whether supply chains truly relocated or whether goods now move through alternative countries.
Who Really Pays the Tariffs?
Instagram | @melody_mocktail | JPMorgan Chase & Co. highlights new research showing that rising tariffs have sharply increased cost pressure on midsize U.S. firms.
The data adds to a broader debate. Administration officials continue to argue that foreign exporters shoulder the burden. Yet multiple economic studies show that U.S. companies write the checks. In turn, those firms must respond in one of three ways:
1. Raise prices for customers
2. Cut hiring or slow expansion
3. Accept thinner profit margins
Each choice carries consequences. Higher prices fuel voter frustration. Slower hiring weakens labor momentum. Lower profits reduce investment capacity.
Meanwhile, a White House spokesperson dismissed the JPMorganChase findings as irrelevant. Officials maintain that tariff policy strengthens the domestic industry. During a visit to a Georgia steel facility, President Trump described tariffs as a major boost for American manufacturing and questioned why courts would challenge measures he views as beneficial.
Trade Goals vs. Trade Data
The administration introduced higher tariffs to reduce the U.S. trade deficit and revive domestic production. Last year, the average tariff rate jumped from 2.6% to 13%, according to Federal Reserve research.
Officials labeled certain duties, including those on steel and building materials, as national security measures. Later, the president declared an economic emergency and announced a broad import tax framework during an event branded “Liberation Day.”
However, government data shows the trade deficit expanded by $25.5 billion last year, reaching $1.24 trillion. Although the president predicts a future surplus, current figures tell a different story.
The market reaction to the tariff increases was swift. Investors sold off assets, and volatility climbed as traders tried to assess the broader economic impact. Not long afterward, the administration revised several tariff rates and opened negotiations with key trading partners. Those talks eventually produced new trade arrangements, but uncertainty still lingers. The Supreme Court is now reviewing whether the emergency powers used to impose the tariffs stretched beyond presidential authority.
Economic Ripple Effects Across the Country
Instagram | @econclubdc | Kevin Hassett disputes Federal Reserve research as tariffs continue to raise costs for midsize U.S. companies.
Inflation has not spiked dramatically during this administration. Even so, economists estimate that consumer prices are about 0.8 percentage points higher than they might be without the tariffs in place. Hiring has slowed somewhat, and concerns about affordability remain a major factor in public opinion.
Kevin Hassett, who leads the National Economic Council, pushed back strongly against Federal Reserve findings suggesting that American businesses and consumers shoulder close to 90 percent of tariff costs. He described the analysis as deeply flawed and argued that it misrepresents the underlying economics.
Even so, the JPMorganChase report points to a consistent trend. Midsize companies—often described by policymakers as the backbone of the U.S. economy—are dealing with higher import costs. Without the financial buffers enjoyed by larger corporations, even modest increases can affect payroll decisions, pricing strategies, and long-term planning.
The Road Ahead
Businesses are adjusting in different ways. Some are renegotiating supplier agreements, while others are searching for alternative partners across Southeast Asia. At the same time, executives are watching legal developments and trade negotiations closely, knowing that each shift could affect the next quarter’s cost projections.
Tariff policy has become a central element of economic strategy. Supporters argue that the measures protect domestic industries. Critics say they simply pass costs along to American companies and households. As the debate grows more intense, middle-market firms face the challenge of staying competitive while managing rising expenses.
The pressure has not faded. Supply chains continue to shift, and key legal decisions remain ahead. For many companies, the only constant has been the need to keep adjusting.
Tariffs have clearly changed the cost structure for midsize American businesses. While officials continue to defend the policy, the financial effects are already visible. With court decisions pending and negotiations still unfolding, the middle market now finds itself at an important crossroads.
The choices made in the months ahead could shape hiring, pricing, and global trade patterns for years.