While U.S. CFOs report a rise in optimism as economic uncertainty declines, a new analysis from The CFO Survey reveals how tariffs continue to be a significant and long-lasting financial burden.
In the third quarter of 2025, U.S. financial decision-makers feel more optimistic. According to the latest CFO Survey, a collaboration between Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta, a significant drop in economic uncertainty is the primary driver. This shift is notable. Uncertainty, a top concern just a quarter ago, has fallen down the list of worries for finance leaders.
However, a persistent challenge remains. Tariffs and trade policy continue to be a dominant concern. While the overall mood is improving, the data reveals a complex landscape. For many firms, the impact of tariffs on prices and costs is a very real and lasting issue.
The survey’s findings paint a clear picture of rising confidence. On a scale of 0 to 100, CFOs’ optimism about the U.S. economy climbed to 62.9, up from 60.9 in the second quarter. This is a reassuring return to the sentiment seen at the beginning of 2024. Confidence in their own companies also saw a boost, increasing from 68.1 to 70.5.
This renewed optimism is not just a feeling. It’s backed by solid business projections. CFOs have revised their revenue expectations for 2025 upwards, from a mean of 5.4% in the previous quarter to 7.8% now. This is a significant jump, indicating a belief in stronger top-line growth. They are also planning for more hiring. The mean expected growth for full-time employment increased from 2.5% to 2.8% for 2025. This points to a more robust economic environment and a willingness to invest in human capital.
For CFOs, this improved outlook also translates to a lower risk of an economic downturn. The probability of negative year-ahead growth, as perceived by financial leaders, has dropped from 22.7% to 13.6%. This reflects a stabilization of the economic environment and a fading of some of the more extreme worst-case scenarios that were top of mind just months ago.
While optimism is on the rise, it’s impossible to ignore the elephant in the room: tariffs. For the third quarter in a row, financial decision-makers cited tariffs and trade policy as their most pressing concern. This was mentioned by 30% of respondents, a figure that, while lower than the previous quarter’s 40%, still outranks monetary policy, inflation, and labor quality. This shows that despite the overall decline in uncertainty, the effects of trade policy are still profoundly felt by businesses.
Firms that depend on international supply chains are feeling the heat most acutely. Those that import supplies from abroad continue to anticipate higher price and unit cost growth than their domestic-focused counterparts. This is not a theoretical problem. The survey asked firms to quantify the impact. On average, respondents reported that just under 40% of their total unit cost growth for both 2025 and 2026 can be attributed to tariffs.
This cost pressure is also being passed on to customers. One-third of expected price growth for 2025 is seen as tariff-driven, and this figure is projected to be a quarter of the price growth in 2026. This data underscores that tariffs are not just a short-term issue. Their impact is expected to linger for some time.
For a clearer picture, consider the firms most impacted. Among the half of companies whose costs are affected by tariffs, the numbers are even more stark. Tariffs are responsible for around two-thirds of their forecast unit cost increases. The same group also expects two-thirds of their price growth in 2025 to be tariff-driven. This confirms that these firms are not absorbing the full hit; they are actively adjusting their pricing strategies in response.
This issue also has a direct effect on business confidence. The survey found that firms most concerned about tariffs were notably more pessimistic. They showed lower optimism about the overall economy and had more tempered expectations for their own company’s performance, including lower revenue and employment growth projections. This case study demonstrates how a specific, external factor can fundamentally alter a CFO’s view of the economic future.
The results of the Q3 2025 CFO Survey offer a mix of good and bad news. The decline in uncertainty and the subsequent rise in optimism are encouraging signs for the U.S. economy. It suggests that a clearer path forward is emerging for many businesses.
However, the persistent concern over tariffs highlights the ongoing challenges of a complex global trade environment. Financial leaders are not just worried about the current impact; they are actively factoring these costs into their long-term forecasts for both 2025 and 2026. This suggests that while the clouds of uncertainty may be parting, the financial pressures from trade policy will continue to shape the decisions of CFOs for the foreseeable future.