""That's a big change in their cost of doing business," said Chi Mac, business research director of the JPMorganChase Institute, which published the analysis on Thursday. "We also see some indications that they may be shifting away from transacting with China and maybe toward some other regions in Asia." The research doesn't say how the additional costs are flowing through the economy, but it indicates that tariffs are being paid by U.S. firms."
"The JPMorganChase Institute report used payments data to look at businesses that might lack the pricing power of large multinational companies to offset tariffs, but may be small enough to quickly change supply chains to minimize exposure to the tax increases. The companies tended to have revenues between $10 million and $1 billion with fewer than 500 employees, a category known as "middle market.""
Tariffs paid by midsized U.S. businesses tripled over the course of last year. Companies employing a combined 48 million people faced higher costs and responded by raising prices, cutting employment, or accepting lower profits. JPMorganChase Institute used payments data to examine middle-market firms with revenues between $10 million and $1 billion and fewer than 500 employees. Payments to China by those companies were about 20% below October 2024 levels, indicating shifts away from direct Chinese suppliers. The data indicate U.S. firms are paying tariffs and that supply chains may be rerouting through other countries or relocating to other Asian regions.
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