Businesses are scrambling to shield their operations from the impact of tariffs. With global trade tensions on the rise, companies are quickly adjusting their supply chains. According to Thomson Reuters, 72% of international trade experts are already modifying their supply sources to better navigate the increasingly uncertain trade environment.
Tariffs are changing the way companies do business. To stay agile, companies are diversifying their suppliers and purchasing areas, tweaking prices, bulking up inventories, and renegotiating agreements with more flexible terms. These strategies help companies adapt to cost fluctuations or supply chain disruptions.
A graphic from eMarketer shows how these tactics are gaining traction among industry leaders. They’re trying to protect their operations before new tariff policies take effect. Experts say the key is to anticipate changes, not wait for them to happen. This includes real-time analysis and impact simulations as part of logistics planning.
The economic fallout from tariffs is already a major concern. A survey by the International Chamber of Commerce found that 64% of top executives worry most about rising costs. This fear is driving specific business decisions.
Meanwhile, data from Gartner reveals how companies are passing on these costs. 30% of CFOs plan to pass on 91% to 100% of the tariff cost to the end consumer. Another 29% will absorb most of the impact, transferring less than 10% to customers.
This scenario forces companies to rethink their supply chain strategies with a more extensive and adaptable perspective. Having alternative strategies, evaluating suppliers, and using predictive analytics tools is no longer just a competitive advantage – it’s an operational necessity in an increasingly uncertain global market.
Tariff Tactics
Companies are using various tactics to mitigate the impact of tariffs:
- Diversifying suppliers and purchasing areas
- Modifying prices
- Bulking up inventories
- Renegotiating agreements with flexible terms
These strategies help companies stay agile in the face of cost fluctuations or supply chain disruptions.
Passing on Costs
Companies are passing on tariff costs to consumers in varying degrees:
- 30% of CFOs plan to pass on 91% to 100% of the tariff cost
- 29% will absorb most of the impact, transferring less than 10%
This approach can help companies maintain profitability, but may also affect customer relationships and loyalty.