R Pal Tariff-driven economic uncertainty is clouding spending forecasts, forcing brands and advertisers to recalibrate strategy amid rising consumer caution.
As global trade tensions resurface, tariffs are once again disrupting business sentiment—this time with a sharper edge. Retailers, advertisers, and consumers are all bracing for impact, as economic uncertainty reaches levels unseen since the early days of the pandemic.
According to a recent University of Pennsylvania Wharton study, the Economic Policy Uncertainty (EPU) Index doubled between January and March 2025, peaking at its highest since March 2020. While tariffs are typically framed as geopolitical chess moves, their downstream effect on consumer confidence and corporate marketing budgets is more immediate—and more complex.
Retailers reliant on imports are contending with higher costs, leaving them with two difficult options: absorb the margin squeeze or pass price hikes on to increasingly wary consumers. Either path puts pressure on demand—and by extension, advertising ROI.
Advertisers, especially those in discretionary categories, are scaling back or rebalancing spend, shifting from performance-heavy campaigns to brand-led narratives that can weather short-term volatility. “When wallets tighten, brands must earn trust—not just clicks,” says a senior media buyer at a global holding group.The uncertainty is also changing the tone of messaging. Brands are veering toward empathetic storytelling, value-driven promotions, and locally resonant campaigns as they attempt to stabilise consumer sentiment.
