59% of Product Leaders Say Tariffs Are Rewriting Innovation Roadmap

In the wake of the Friday (Feb. 20) Supreme Court decision striking down most of the tariffs levied by the Trump administration, followed by a spate of new tariff announcements, firm must grapple with how to respond to a shifting set of cost structures.

Tariffs are not only raising costs for middle-market companies, they are reshaping what product leaders choose to work on when the economic data they usually rely on arrives late or not at all.

That is the throughline in “Tariffs Turn Up the Heat as Product Leaders Confront Peak Uncertainty,” a December 2025 PYMNTS Intelligence report from The 2025 Certainty Project. Based on a survey of 60 U.S.-based product leaders at middle-market firms with $100 million to $1 billion in annual revenue, the report finds that goods companies are absorbing the sharpest pain, while services firms feel strain with less intensity.

What stands out is how disruption is changing decision making: many teams are trading longer-horizon technology initiatives for near-term fixes, even as they hold onto a hope that tariffs could eventually make supply chains stronger and free up resources for innovation.

• 47% of product leaders at goods firms say tariffs are mostly or completely negative for business finances.
• 59% of goods-firm product leaders say tariff disruption has pushed their companies away from long-term initiatives toward cost-saving operational adjustments.
• 60% of product leaders say tariff-driven uncertainty has constrained their firms’ ability to fund AI and automation.

Beyond the headline numbers, the report frames tariffs as a management problem as much as a policy problem. Product leaders sit at the collision point between input costs and customer demand, so their warning lights tend to flash early.

In October, product leaders were far more likely than CFOs to describe tariffs as financially negative for goods firms, which hints at an internal lag: the people closest to sourcing, logistics and production may see stress before it fully shows up in finance narratives.

Operationally, the concern is not abstract. Many leaders expect shortages or delays and anticipate paying more to reconfigure supply chains. Yet a notable share also sees a longer-term upside, expecting tariffs to improve resilience and, eventually, increase the resources available for innovation. That mix of short-term strain and long-term hope explains why many companies are acting defensively now while still talking about modernization later.

The report also shows how responses vary based on what a company sells and how much room it has to maneuver. Goods firms appear more constrained in changing offerings quickly, and they are less likely than services firms to pass costs through via price increases. Scale matters, too. Smaller middle-market firms are more likely to push suppliers for better terms, reflecting tighter pricing power and fewer levers to pull. These differences matter because they shape who can play offense, and who is forced into triage.

Even artificial intelligence is being reframed. Tariff uncertainty is limiting funding, but it is also pushing companies toward AI projects with immediate payoff, especially supply chain optimization. Fewer leaders cite AI as a way to offset tariff-driven pricing pressure, and fewer still tie it to reducing reliance on labor. In other words, the technology agenda is not disappearing, but it is narrowing.

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