Are Trump's tariffs altering Americans' spending habits?

CNN reported that American consumers, who have been significantly impacted by the pandemic and subsequent inflationary pressures, are altering their spending patterns and delaying certain purchases due to the economic uncertainty stemming from President Donald Trump’s tariff policies. New survey data from KPMG highlights this shift in consumer behavior.

This insight emerged from KPMG’s second annual American Perspectives survey, released early Thursday. The survey, which included responses from 2,500 adults, aimed to assess individuals' financial situations and their adaptation to evolving economic forces, such as tariffs, generative artificial intelligence (GenAI), and the role of higher education.

The survey was conducted between April 3 and April 23, following Trump’s announcement of new tariffs on April 2 and a subsequent pause on several of these measures. This period preceded the recent de-escalation of the US-China trade war.

According to KPMG, survey respondents indicated plans to defer major purchases and reduce spending in other areas to avoid accumulating debt. Matt Kramer, KPMG's US products line of business leader, noted in an interview with CNN: "Seeing them go through the Covid cycle and into this new cycle, they're quickly adapting to their spend-smart initiatives as they look at their personal finances and ways to control costs and how they evaluate major purchasing decisions,”

Kramer added that during the previous cycle (the pandemic), consumers were slower to adjust to significant changes, partly due to lower borrowing costs at the time. However, current conditions suggest that consumers are now more cautious about incurring new debt and are adopting prudent financial practices more swiftly.

Approximately 68% of respondents expressed reluctance to take on additional credit. Furthermore, 43% indicated they would delay purchasing a car due to tariffs, while 70% planned to adopt free, ad-supported television as an alternative to subscription-based streaming services.

“They're clearly looking at opportunities to save,” Kramer remarked. “They're switching providers where it makes sense, whether that's their streaming services, whether it's looking at insurance providers.”

Beyond tariffs and personal finance, KPMG's survey revealed that GenAI is increasingly influencing both personal and professional lives. About 45% of respondents reported that GenAI has a substantial impact on their daily routines and careers, up from 41% and 40%, respectively, last year.

The survey also highlighted shifting perceptions regarding higher education, with half of the respondents believing that a degree is no longer essential for securing a well-paying job. Kramer emphasized the growing importance of apprenticeships, technical training, and leveraging technological advancements to accelerate skill development.

Similarly, American importers are also adopting a cautious wait-and-see approach. The tariff increases imposed by the Trump administration have compelled American importers to delay their global procurement strategies. Should tariffs be reduced in the future, this could potentially result in a sudden surge in global logistics costs, challenges in securing capacity, and port congestion, thereby disrupting the equilibrium of supply and demand in the market.