According to GlobalData, increasing economic uncertainty and trade tariffs are significantly eroding consumer confidence in the US. The country’s slide in the 2025 World Happiness Report—to 24th place, its lowest-ever ranking—highlights growing dissatisfaction. Having dropped from 15th in 2023 and 23rd in 2024, the downward trend reflects mounting pressure on American households. Rising costs, driven by tariff-induced inflation and global trade tensions, are central to this decline in national well-being.
Prerana Manral, Senior Consumer Analyst at GlobalData, comments: “Tariffs are no longer just a policy debate; they are a real-time input cost multiplier. Fast-moving consumer goods (FMCG) brands, especially those with global supply chains, now face a tough choice: absorb shrinking margins or pass costs on to consumers at the risk of demand deflation.”
According to the Guardian, major consumer goods companies such as Procter & Gamble, Nestlé, and Unilever have reported significant cost increases driven by tariffs, prompting price hikes on everyday essentials. For example, Kraft Heinz recently revised its financial outlook downward, citing a volatile business environment shaped by tariffs and inflation. PepsiCo and Procter & Gamble have also lowered their earnings forecasts, attributing reduced performance to tariff-driven inflation and softening consumer demand.
The broader macroeconomic outlook reflects this fragility. In April, the International Monetary Fund (IMF) downgraded the US growth forecast for 2025 from 2.7% in January to 1.8%, the steepest cut among major economies. These pressures have not gone unnoticed by the public. According to recent research by AP-NORC, three-quarters of Americans expect tariffs to drive up prices, and many express growing concerns about the risk of recession.
Manral adds: “This sentiment is echoed in the GlobalData 2025 Q1 survey* results. In the US, 56% of consumers say they are “extremely” or “quite concerned” about the impact of trade wars and import tariffs on product pricing. Similarly, the Michigan Consumer Sentiment Index sank to its lowest level since 2022, as Americans brace for higher inflation and continued economic strain. Persistent inflation, amplified by tariffs, is fueling consumer anxiety, curbing discretionary spending, and increasing price sensitivity and country-of-origin awareness.”
The ripple effects of tariffs extend beyond pricing. GlobalData’s survey* also revealed that 55% of consumers are now more attentive to the country of origin of the products they buy due to ongoing political events. This reflects a growing wave of political consumerism, where purchase decisions are increasingly influenced by ideology as well as affordability.
Prerana concludes: “Tariffs are not only inflating operational costs but also reshaping consumer expectations, trust, and purchasing behavior. The decline in the US happiness ranking is a multifaceted issue, but the correlation with economic factors, particularly those influenced by trade policies and tariffs, is evident. As consumers face higher prices and companies navigate increased costs and uncertainty, this impacts the collective sense of well-being.
“In this context, FMCG brands must prepare for more volatile policy environments and design strategies that address both the economic and emotional dimensions of consumer behavior. This includes resilient pricing models, localized sourcing, and transparent consumer engagement that builds trust and loyalty in uncertain times.”