Supply Chain Leaders Plan to Pass Costs to Customers as Top Tariff Mitigation Strategy

According to a survey by Gartner, Inc., 45% of supply chain leaders anticipate passing costs to their customers as their primary strategy for mitigating new tariff costs. Forty-three percent of respondents stated they would mitigate the costs through various supply chain initiatives as their primary strategy (see Figure 1).

Gartner surveyed 126 supply chain leaders from March 17, 2025, through April 7, 2025, on their planned responses to new tariff policies and specific mitigation actions. Qualifying organizations reported enterprise-wide annual revenue of at least $50 million, with 83% of respondents coming from organizations with $1 billion or more in revenue.

“Supply chain leaders have many potential levers to pull from in mitigating new costs related to tariffs,” said Vicky Forman, Senior Director Analyst in Gartner’s Supply Chain practice. “While supply chain leaders have multiple initiatives underway to potentially lessen the impacts, many of these actions have yet to be completed.”

Figure 1: Passing Costs to Customer is Top Supply Chain Strategy

While “increased costs” was the top risk associated with new tariffs, cited by 92% of respondents, 75% also flagged concerns about slowing customer demand among the top three risks to their business. These risks included an overall decrease in consumer demand (cited by 49%), as well as concerns about retaliatory measures impacting international customer demand (cited by 45%).

As a result of these concerns, Forman emphasized the importance of numerous supply chain initiatives underway that could help organizations mitigate new tariff costs beyond passing costs to customers, especially over the longer term. The supply chain initiatives to mitigate tariff impacts planned (or already underway) most cited by respondents included:

• Renegotiating supplier contracts (47%)
• Exploring collaboration opportunities with suppliers (43%)
• Addressing country of origin, valuation and other trade management tactics (40%)
• Adjusting supply locations outside the United States (39%)
• Adjusting production locations outside of the United States (26%)
• Pulling inventory forward (23%)

Gartner clients can read more in How Supply Chains Are Responding to New U.S. Tariffs and Policies. Nonclients can learn more in How CSCOs Can Turn Tariff Volatility Into a Competitive Advantage.

 About Gartner Supply Chain Symposium/Xpo

Preparing for volatility, risk and disruption while ensuring future readiness requires CSCOs to be equipped with a measured and strategic response. Join us at Gartner Supply Chain Symposium/Xpo for the latest research, guidance and actionable insights to shift your supply chain, navigate disruption and seize opportunity.

Upcoming dates and locations for Gartner Supply Chain Symposium/Xpo include:

Orlando: May 5-7

Barcelona: May 19-21

 

About the Gartner Supply Chain Practice

The Gartner Supply Chain Practice provides actionable, objective insights for supply chain leaders and their teams, so they can respond to disruption and innovate for the future through leading-edge supply chain management practices. Additional information is available at https://www.gartner.com/en/supply-chain. Follow news and updates from the Gartner Supply Chain Practice on LinkedIn and X using #GartnerSC. Visit the Gartner Supply Chain Newsroom for more information and insights.

About Gartner

Gartner, Inc. (NYSE: IT) delivers actionable, objective insight that drives smarter decisions and stronger performance on an organization’s mission-critical priorities. To learn more, visit gartner.com.