Dive Brief:

• Most CFOs responding to a recent Gartner poll said they expect much of the financial cost from various Trump administration tariffs on imported goods to be passed on to consumers.
• Nearly six out of 10 finance chiefs said they expect their organizations to absorb less than 10% of tariff impact in their cost-base, according to the research. Only 16% of survey respondents anticipated an absorption rate above 50%. Gartner polled 192 finance leaders from a cross-industry group of organizations with global operations.
• “CFOs are strategically responding to new tariffs, focusing on cost management and supply chain adjustments to mitigate the financial impacts,” Alexander Bant, chief of research in Gartner’s finance practice, said in a press release on the study.

Dive Insight:

Finance chiefs and other business leaders are navigating an increasingly uncertain economic environment as President Donald Trump leans into a trade agenda relying heavily on the imposition of tariffs.

On Wednesday, the administration followed through on imposing sweeping 25% tariffs on all steel and aluminum imported into the country. Both the EU and Canada responded with retaliatory measures.

“The optimism that existed after the November election based on expectations of business-friendly economic policies and higher expectations for growth have now been tempered because of all of the uncertainty,” Randeep Rathindran, a senior researcher in Gartner’s finance practice, said in an interview.

In the current environment, CFOs should be identifying potential tariff risks and associated solutions ahead of time, according to Paul Baris, a principal at procurement and supply chain consulting firm Efficio.

“CFOs need to understand not just what their exposure is on current tariffs, but also potential exposure in the future as retaliatory actions are taken, so that when tariffs are launched with little notice, they can have an action plan already developed,” he said in an email.

Gartner’s research found that many CFOs are already updating supply chain risk assessments, among other steps. Forty-eight percent of finance leaders are working on alternative component and raw material sourcing and 41% are reevaluating their supply chain network design, according to the survey results.

CFOs are also prioritizing updates to financial risk assessments, enhancing forecasting and scenario planning capabilities, and adjusting pricing strategies, the research found.

Only 17% of finance chiefs believe they will not need to implement cost contingency actions this year, with 37% saying they have already begun to take such measures, according to another recent Gartner study. In that poll, 71% of CFOs said they view the current environment as “somewhat or highly unfavorable” for their business.