CFOs plan to push majority of tariff costs to customers

The majority of CFOs are preparing to pass the financial burden of new tariffs onto customers, with few organizations opting to absorb a significant share of the costs, according to a recent survey by Gartner.

The poll of 192 CFOs and finance leaders across industries with global operations found that 59% expect to absorb less than 10% of tariff-related cost increases within their cost base.

Another 41% anticipate absorbing nearly half of the tariff impact internally, leaving a small portion of organizations adopting a middle-ground approach. The findings underscore the sharp divide in how businesses are strategizing around trade disruptions.

What share of the tariff impact CFOs plan to absorb within their own cost base?

“CFOs are strategically responding to new tariffs, focusing on cost management and supply chain adjustments to mitigate the financial impacts,” said Alexander Bant, Chief of Research in the Gartner Finance practice.

“While a majority of CFOs are not expecting their organizations to absorb most tariff-related costs, some do, likely indicating varying levels of price sensitivity among customers and suppliers for specific organizations.”

Passing on Costs: The Customer Impact

With tariffs reshaping corporate cost structures, companies are prioritizing price adjustments over internal cost absorption. The survey revealed that 30% of CFOs plan to pass nearly all (91%-100%) of tariff costs onto customers, while 29% intend to pass on 10% or less.

On average, companies expect to transfer 73% of the tariff increase to customers, reflecting a deliberate shift in financial strategy.

Potential Tariff Impact on Customers

The move suggests that CFOs view external price adjustments as a more viable path than fully integrating tariff costs into their balance sheets. However, this approach carries potential risks, including customer pushback, competitive pressures, and potential demand shifts depending on industry price elasticity.

Strategic Measures Beyond Pricing

Beyond pricing adjustments, CFOs are leveraging financial and operational strategies to navigate tariff challenges. These include:

• Financial risk assessments and forecasting enhancements to better anticipate cost fluctuations.
• Cost reduction initiatives and transfer pricing adjustments.
• Revisiting Harmonized Tariff Schedule (HTS) classifications, tariff exemptions, and free trade agreements to lower dutiable values.

Despite these efforts, 45% of CFOs have no immediate plans to modify their tax and duty compliance approach, potentially missing near-term opportunities to optimize their cost structure.

Supply Chain Overhauls and Supplier Negotiations

A significant portion of CFOs are turning to supply chain reengineering as a primary mitigation strategy. According to Gartner, 48% of CFOs are actively working on alternative component and raw material sourcing, while 41% are reevaluating their overall supply chain network design.

CFOs are also collaborating with supply chain leaders to renegotiate supplier contracts and update risk assessments. The emphasis on diversification and sourcing flexibility highlights the broader shift toward de-risking supply chains amid geopolitical and trade uncertainties.

Navigating a Volatile Trade Environment

As tariff policies evolve, CFOs are taking a data-driven approach to recalibrating their strategies. Gartner’s research suggests that continuous updates to scenario planning are becoming a financial imperative.

“CFOs are leveraging data and benchmarks to calibrate their tariff response strategies effectively,” said Bant. “Continuous updates to scenario plans are essential as the trade environment evolves, ensuring organizations remain resilient and competitive.”

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