A growing body of evidence shows that major corporations are exploiting the chaos of President Donald Trump’s escalating trade war to raise prices and protect profits, regardless of whether their supply chains are directly affected by tariffs. A new report from the Groundwork Collaborative released Tuesday highlights how corporate executives are openly discussing using the tariff regime as “cover” to justify price increases across a wide range of consumer goods.
“President Trump’s turbulent trade policy has created a perfect storm of market chaos, giving corporations a golden opportunity to jack up prices, pad profit margins, and fleece Americans simply because they can,” said Lindsay Owens, executive director of the Groundwork Collaborative. “While Trump’s tariffs continue to cause economic upheaval, corporations are exploiting the chaos and working families are left to foot the bill.”
The report relies on earnings call transcripts in which corporate leaders describe their pricing strategies, many of which directly cite the current trade climate as a pretext for price hikes—even when their input costs remain unchanged or have decreased.
Among those named in the report is Aaron Jagdfeld, CEO of Generac Power Systems, who told investors, “Even if we have metals that weren’t impacted directly by tariffs, the indirect effect of tariffs is that it gives steel producers and the mills and other fabricators… great cover for increased pricing in some cases.”
Similarly, Holley CEO Matthew Stevenson noted that “in the marketplace we have seen price increases well in excess of what we put out into the market,” adding, “We’ve seen increases as high as 30% or more on some categories from some competitors.”
At footwear company Rocky Brands, CFO Thomas Robertson confirmed that tariffs were not even a factor in his company’s upcoming price hikes. “We certainly welcome a reduction in the Chinese tariffs, but we’ll be announcing a price increase here regardless of any changes of the Chinese tariffs over the next week or two to go into effect in June,” he said.
The same day the Groundwork report was released, Procter & Gamble announced it would raise prices on about 25% of its products, citing Trump’s tariffs as the primary cause. During its quarterly earnings call, the company projected “mid-single-digit price increases” across a wide range of consumer staples to help offset what it described as a $1 billion hit from new import duties.
A separate analysis by the Tax Foundation underscored the direct financial burden the tariffs are placing on households. According to the foundation, 74% of all U.S. food imports—valued at roughly $163 billion in 2024—now face Trump-imposed tariffs ranging from 10% to over 30%, with even higher rates looming if reciprocal tariffs take effect on August 1. These costs will largely hit items like bananas and coffee that cannot be grown domestically at scale.
“In 2024, the U.S. imported about $221 billion in food products, 74% of which ($163 billion) faced the Trump tariffs,” the report noted.
Trump’s tariff expansion also threatens U.S. manufacturers with price hikes on key inputs. A recent analysis from the Washington Center for Equitable Growth found that the tariffs could increase factory costs by 2% to 4.5%, a significant margin for sectors operating on slim profit lines. Researcher Chris Bangert-Drowns warned that such cost pressures “could lead to stagnation of wages, if not layoffs and closures of plants.”
In Michigan, where manufacturing represents a major share of the economy, Jordan Manufacturing Co. President Justin Johnson said that even though his company doesn’t buy foreign steel, prices are rising due to the lack of competition. “We’re getting squeezed from all sides,” he said. “There’s no red-blooded capitalist who isn’t going to raise his prices” under those circumstances.
In Montana, the impact is just as stark. Josh Smith, founder of Montana Knife Co., said he’s facing a 15% tariff on a $515,000 bevel-grinding machine he had to import from Germany, a cost that could have been used to hire new workers. “There’s only two companies in the world that make them, and they’re both in Germany,” he explained. Smith is also preparing for a 50% tariff on steel he’ll need to import from Sweden starting in 2026 after a U.S. supplier declared bankruptcy and moved production abroad. “I want to buy more equipment and hire more people. That’s what I want to do,” Smith said. “But the average American is not sitting in the position I am, looking at the numbers I am and making the decisions each day.”
The Trump administration has repeatedly downplayed concerns about inflation and economic fallout, with the White House Council of Economic Advisers issuing a report in May claiming that import prices had fallen over the prior six months. But economists like Ernie Tedeschi at Yale’s Budget Lab countered that the White House’s own data shows “import prices have accelerated in recent months.” Tedeschi’s team estimates that the tariffs will cost the average American household $2,400 in reduced purchasing power.
Internationally, the ramifications of the trade war are being felt most acutely in Mexico. U.S.–Mexico bilateral trade reached $840 billion in 2024, but a growing wave of uncertainty has frozen investment and wiped out an estimated 65,000 jobs in Juárez alone. Trump’s tariffs on Mexican-made cars, steel, aluminum, and tomatoes have rippled through both economies, stalling cross-border business deals and souring long-term investment plans.
Jerry Pacheco, CEO of the Border Industrial Association, said, “We’ve lost at least three deals since the steel and aluminum tariffs went up to 50% in Santa Teresa, so it creates an uncertain business environment.”
Compounding the issue is political instability in Mexico, where President Claudia Sheinbaum has overhauled the judiciary in ways critics say undermine democratic institutions and erode investor confidence. In June, a low-turnout judicial election replaced Supreme Court justices and judges with candidates aligned with the ruling Morena party. Credit-rating agencies including Fitch, S&P Global, and Moody’s have warned that the reforms could “negatively affect the investment appetite and business environment.”
Foreign direct investment figures reflect that fear: Of the $21.3 billion Mexico received in the first quarter of 2025, just $1.58 billion—or 7.4%—was for new projects. That’s far below the six-year average of 29% recorded under Sheinbaum’s predecessor and drastically lower than the nearly 60% seen at the turn of the century.
“What investors are looking for is certainty and rule of law,” said former U.S. Ambassador Tony Garza. “What they’re getting with tariff threats and judicial elections is chaos and incompetence.”
Despite these warnings, the Trump administration continues to frame the tariffs as a patriotic return to domestic manufacturing. “The ‘Made in USA’ label is set to resume its global dominance under President Trump,” said White House spokesperson Kush Desai. Treasury Secretary Scott Bessent offered a simpler justification: “Everyone is willing to pay a toll.”
But for small manufacturers, workers, and consumers facing soaring costs, that toll is already proving unaffordable.
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