Study: small companies struggle to pass on costs of fuel and tariffs to customers

Tariff-exposed industries with significant fuel, freight, and industrial-energy requirements experienced the clearest pressure on profitability following tariff actions in 2025, even when their sales trends remained resilient, according to analysis by Abrigo, a provider of risk management and lending software for U.S. financial institutions.

The study, based on private-company financial statements in Abrigo Connect, examined 17 selected industries with tariff exposure, comparing a 2024 pre-tariff baseline with 2025 results. The analysis found that in several industries, median sales-growth rates improved while median gross profit margins declined, suggesting cost pressures may have absorbed gains that otherwise would have supported profitability.

“Small businesses typically have less margin to absorb the impact that tariffs may have on their input costs,” said Rob Newberry, an Abrigo Senior Consultant. “That can create larger year-over-year swings in financial performance, and some may require additional funding until businesses can pass those increases on to customers.”

To distinguish tariff-related cost pressure from broader fuel and energy pressures, Abrigo grouped the industries into three cohorts. One cohort included import-reliant industries with relatively lower energy intensity, such as computer and electronic product manufacturing and merchant wholesalers of durable goods. A second cohort included 10 industries with both tariff-sensitive inputs and meaningful energy or transportation costs, such as fabricated metals, food manufacturing, construction, and restaurants. And a third cohort included industries with tariff exposure plus high fuel, freight, or industrial-energy requirements: primary metal manufacturing, heavy and civil engineering construction, truck transportation, and warehousing and storage.

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