Gartner: Five Pathways for CSCOs Amid Tariff Uncertainty

Global enterprises are facing the most significant tariff shifts seen for 50 years. According to Gartner, their strategic responses must stretch far beyond simply absorbing costs or passing them on to customers.

The consulting giant is warning that tariff volatility should not be perceived as a short-term disruption, but a long-term challenge.

“Enterprises should recognise tariff volatility as a multi-year, dynamic event," explains Suzie Petrusic, Senior Director Analyst in Gartner’s Supply Chain practice.

"Chief Supply Chain Officers (CSCOs) who recognise this reality should continually evaluate opportunities to invest in strengthening their operations and attract outside investments from geopolitical actors and ecosystem partners.”

Careful scenario planning essential

The risks of premature or delayed responses to tariffs are equally precarious. 

Brian Whitlock, Senior Research Director in Gartner’s Supply Chain practice, urges CSCOs to proactively plan for potential trade partner countermeasures, policy escalations and de-escalations.

“CSCOs who anticipate that current tariff volatility will persist for years, rather than months, should also recognise that their business operations will not emerge successful by remaining static or purely on the defensive,” he adds. 

Long-term success, Brian notes, hinges on strategic reinvention: “The long-term winners will reinvent or reinvigorate their business strategies, developing new capabilities that drive competitive advantage. In almost all cases, this will require material business investment and should be a focal point of current scenario planning."

Five pathways to navigate tariff volatility

Gartner outlines five strategies CSCOs and business leaders can adopt when facing tariff policy changes.

Among the pathways, those that reinvent or reinvigorate their operations are said to stand the best chance of driving competitive advantages from ongoing tariff volatility.

1. Retire: Certain products or even entire business lines may become unsustainable under prolonged tariff pressures. When neither passing costs to customers nor absorbing them is feasible, organisations may need to accept product retirement as a necessary outcome.

2. Renovate: Tariffs may push overdue product adjustments to the forefront. Leaders must assess whether a product’s criticality justifies raising prices or absorbing costs, even in a price-sensitive market.

3. Rebalance: As early winners and losers emerge from tariff shifts, CSCOs should be cautious about treating initial changes as permanent. Demand planning must account for further escalations, de-escalations and competitor responses.

4. Reinvent: In some cases, sustained volatility creates opportunities to invest in new markets or repurpose existing operations to target local demand. Leaders must carefully consider whether policy changes warrant such moves and monitor future geopolitical developments closely.

5. Reinvigorate: Early winners of tariff changes can seize competitive advantage by expanding domestic manufacturing capacity or repositioning themselves within the market. Lowering prices to capture market share is one example, particularly if organisations can secure support or investments from partners.

Time for bold strategies, says Gartner

Gartner is clear in its assertion: enterprises that approach tariffs as static, short-term concerns are likely to be left behind.

Those who thrive will develop bold strategies, make calculated investments and adapt to evolving geopolitical conditions.

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