Exclusive: Tariffs have increased costs but businesses still expect growth, survey says

More than 70% of U.S. small and mid-sized businesses say tariffs have already increased their operating costs — but almost all still expect to be able to grow internationally in the coming years, per a new HSBC survey shared exclusively with Axios. Why it matters: In an increasingly volatile and uncertain environment, corporate leaders are staying optimistic, even while they concede that it's getting more expensive to do business.Details: HSBC's Trade Pulse survey gathered responses from more than 5,700 companies in 13 countries between April 30 and May 12, including about 1,000 U.S. businesses. Respondents all had international operations, and annual revenue between $50 million and $2 billion. By the numbers: 72% of U.S. companies said tariffs have already increased their costs, and 77% expect those costs to rise further by the end of the year.HSBC executives say two things are driving the pressure: companies that haven't had to pay duties before are suddenly being subject to them; and competition is rising for suppliers in lower-cost environments. Yes, but: That's not stopping companies from growing, they say.While more than 70% said they're trying to increase domestic reliance in the face of trade pressure, more than 90% said they still expect to be able to grow internationally in the next two years. That's something HSBC found broadly in U.S. companies, but much less so internationally."This optimism, and the fact they are really looking to see how creatively they can grow and pivot, is really unique, and this is something unique in the data," Marissa Adams, HSBC's Americas and Europe head of global trade solutions, tells Axios. The intrigue: The responses also indicate that businesses are moving to do two things the Trump administration wants to see happening — adopting new technologies (like AI) and re-shoring. 44% say they're looking at moving production domestically, while 64% are adopting new digital technologies or platforms. The bottom line: It's still early in the tariff game, and no one's making major long-term decisions just yet, Adams says — but they are thinking about things like the structure and efficiency of their supply chains. "A lot of companies are still on a wait and watch," she said."They're taking a look again, even those companies that perhaps are cash rich."

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