Strategic Challenge for CFOs: Managing Tariff-Driven Cost Pressures

Issue: Rising Costs and Margin Pressures

Ask Yourself: How much tariff-driven cost can we pass on before customer demands begin to decline?

Tariffs are significantly increasing raw material and production costs. CFOs must determine whether to absorb these costs, pass them on to customers, share them with suppliers, or restructure supply chains altogether.

Gartner reports that most CFOs plan to pass through 73% of tariff-related cost increases to customers, while 15% expect to share more than half the burden with supply partners—underscoring the difficult decisions and financial strain these policies create.

Issue: Supply Chain Volatility and Vendor Risk

Ask Yourself: What contingency plans are in place if a key supplier becomes unreliable or prohibitively expensive?

Global sourcing now comes with heightened risks. Companies relying on international suppliers are seeing volatility in pricing and freight costs. As a result, many are exploring domestic alternatives or nearshoring strategies to capitalize on potential incentives and reduce exposure.

Gartner’s research shows that enhancing supply chain resilience and mitigating vendor risk are top CFO priorities.

Issue: Capital Allocation and Cash Flow Resilience

Ask Yourself: Is our liquidity strategy agile enough to withstand economic shocks?

In times of economic uncertainty, CFOs must scrutinize capital project commitments and cash flow strategies to protect the business from unfavorable conditions. According to Gartner, 37% of companies have already implemented cost contingency plans as of early 2025.

Actionable Strategies CFOs Should Prioritize

1) Build a Scenario-Based Planning Framework

Volatility demands vision. Leading finance teams are developing dynamic forecasting models that simulate a range of tariff outcomes—equipping CFOs to make informed, proactive decisions.

Take Action:

• Run liquidity stress tests across financial statements
• Build dashboards to monitor tariff developments and flag emerging risks
• Align forecasts with board-level thresholds for action

2) Diversify Supply Chain Exposure

Tariff exposure often originates with sourcing. CFOs should collaborate with procurement to identify high-risk suppliers, pursue nearshoring opportunities, and re-evaluate logistics strategies that enhance long-term cost stability.

Take Action:

• Conduct a supplier risk audit
• Develop contingency plans for Tier 1 vendors in high-tariff zones
• Explore duty drawback programs and reclassification strategies

3) Refine Pricing and Cost Recovery Models

Passing on cost increases without eroding customer loyalty requires precision. Leveraging data-driven elasticity models helps CFOs optimize pricing while maintaining trust.

Take Action:

• Use AI to model customer price sensitivity
• Communicate pricing changes with transparency
• Assess potential product reclassification to reduce tariff exposure

4) Reevaluate Tax and Regulatory Strategies

Tariff policy shifts have broad tax implications. CFOs must assess transfer pricing structures, capture domestic incentives, and ensure alignment with evolving regulations.

Take Action:

• Reassess transfer pricing agreements for efficiency
• Monitor global trade regulations weekly
• Partner with legal and tax teams to ensure compliance and adaptability

5) Invest in Digital Agility

In periods of disruption, speed is a strategic asset. Organizations that invest in digital finance platforms gain real-time visibility and responsiveness—positioning themselves to pivot quickly and perform more effectively.

Take Action:

• Automate cash forecasting and reporting
• Use AI tools for real-time risk monitoring
• Benchmark digital maturity to uncover competitive gaps

Final Thought: The Cost of Inaction Is Greater Than the Cost of Change

This isn’t just a policy change—it’s a strategic inflection point.

CFOs who act now by embedding resilience, digitization, and data-driven planning into their operating models won’t just withstand tariff disruption. They’ll emerge more agile, more competitive, and better positioned to lead.

Let’s talk about how your team can turn uncertainty into strategic advantage.

Insights from Acclarity

Accredited to FP&A Subject Matter Expert: Marcus Fisher

References

1 Gartner (2025), Seize the Shift: Business Implications of U.S. Executive Orders for CFO.

2 Deloitte (2025), Uncovering the Connection Between Digital Maturity and Financial Performance.

3 Harvard Business Review (2019), How to Survive a Recession and Thrive Afterward.