Distributors also warn that new tax increases could add to mounting financial pressures across the industry.
The National Association of Wholesaler-Distributors (NAW), in collaboration with Modern Distribution Management (MDM) Research, released new survey results on the impact of tariffs on the supply chain. Based on responses from an industry-wide survey, the findings reveal that tariffs are driving cost increases and creating operational challenges across the wholesale distribution industry.
“The survey indicates that one-third of distributors are already facing price hikes of 25% or more. Though these increases haven’t hit store shelves yet, it’s an indication of where prices are headed,” said Eric Hoplin, CEO of NAW. “We urge President Trump to secure trade agreements quickly to restore certainty, help businesses plan, and ease supply chain pressures.”
Survey results highlight two-thirds (62%) of distributors expect their cost of goods sold to rise by 10% or more in 2025. Financial strain is already widespread, with 67% of respondents reporting a negative impact on their businesses and only 2.5% indicate any positive financial impact.
Operational shifts are also underway. Distributors are slowing inventory replenishment (48%), delaying new hiring (44%), cutting capital investments (37%), and reducing discretionary spending (60%).
The top concern is tariffs on China with 37% reporting more than 20% of their inventory originates in China and only 17% say they are able to meaningfully shift sourcing to domestic or non-impacted suppliers.
Beyond tariffs, the survey revealed growing concern among distributors about potential tax increases. Preserving key provisions of the 2017 tax reforms, signed into law during President Trump’s first term, such as the 199A deduction for pass-through entities and a globally competitive corporate tax rate, remains a top priority for the industry. Distributors overwhelmingly credit those tax cuts with driving growth: 62% reinvested in their businesses, and 40% increased wages and benefits.
About NAW
The National Association of Wholesaler-Distributors (NAW) is one of America’s leading trade associations, representing the $8.2 trillion wholesale distribution industry. Founded in 1946, NAW comprises national, regional, and state employers of all sizes, industry trade associations, partners, and stakeholders spanning all distribution sectors. Our industry employs more than 6 million workers throughout the United States, accounting for 1/3 of the U.S. GDP. Learn more at www.naw.org.
Media Contact: Meghan Cieslak, [email protected]/202-263-4081.
