Nearly half of supply chain leaders say they plan to pass new tariff costs directly to customers, according to a new Gartner survey. The second most popular strategy? Making changes within their supply chains. The survey polled 126 supply chain leaders between March 17 and April 7, with most respondents coming from companies that earn over $1 billion a year.
“Supply chain leaders have many potential levers to pull from in mitigating new costs related to tariffs,” said Vicky Forman, Senior Director Analyst at Gartner. “While supply chain leaders have multiple initiatives underway to potentially lessen the impacts, many of these actions have yet to be completed.”
Increased costs were the top concern for 92% of those surveyed. But leaders are also worried about losing customers. Three out of four listed declining demand as a major risk, whether from U.S. consumers or international buyers reacting to possible retaliation.
Beyond raising prices, companies are exploring other steps to deal with tariffs, including:
- Renegotiating supplier contracts (47%)
- Working more closely with suppliers (43%)
- Reviewing trade rules and valuation (40%)
- Moving supply or production out of the U.S. (39% and 26%)
- Pulling inventory forward to avoid higher costs (23%)
Forman said many of these moves are still in progress and could take time to show results. For now, passing the cost on to customers is the most common short-term play.
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