Channel sentiment around tariffs and trade policy can best be described as 'cautiously optimistic' as Q1 2026 ends, with mixed signals persisting across key indicators. Overall economic sentiment stabilized through the first three months of 2026, with “strong” views ticking up to 43% and “weak” sentiment holding steady at 38%. This schism underscores ongoing skepticism as ITSPs weigh economic conditions heading into the next quarter.
Forward-looking confidence improved slightly, but overall outlook remains divided. Optimism about the 12-month outlook rose to 48%, recovering from November 2025's low, while pessimism decreased to 35%. The share of those who said they were 'neutral' increased from 15% to 17%.
The war in Iran added another wrinkle to the complex economic picture in Q1 2026. The majority (81%) of respondents said they were concerned about its impact on their business over the next six to 12 months. Sentiment on long-term tariff impacts, deadlocked at the end of 2025, is trending negatively, with 44% now saying tariffs negatively impact on their business. While 29% said tariffs are having a positive effect, 28% remained neutral on their impact.
Operational responses to tariffs evolved further in Q1. The number of ITSPs absorbing the costs internally rose from 22% to 28%, while the number of ITSPs passing on tariff costs to customers declined from 68% to 59%. At the same time, more ITSPs reported higher COGS (70%) as the most-prevalent negative impact, but fewer ITSPs said they experienced decreased product revenue (33%). However, customer purchasing cuts increased from 36% to 53%.
The first quarter of 2026 saw the channel continuing to navigate a complex and unsettled environment. While optimism regained some ground, the overall picture remains split, as ITSPs prepare for continued uncertainty in 2026.
GTIA Members: Read the Q1 GTIA Channel Economic Tracker in the Member Portal.
Not a member yet? Join today.
