Learn what actions executive leaders should take to turn tariff volatility into a competitive advantage.
Key Takeaways
- "Tariff changes are a key pillar of the second Trump administration’s agenda and will lead to higher costs for goods imported into the United States. Enterprises must start by aligning on whether or not they should take action."
- "Enterprises need to work through significant uncertainty around responses of customers and suppliers, competitors, and governments to determine potential actions that should be taken and when they should be implemented based on the evolving trade environment."
What to know from the Gartner® report #
“Businesses must prepare for ongoing tariff volatility under the second Trump administration, both as new U.S. tariffs are announced and in anticipation of countermeasures by trading partners. This research details actions for executive leaders to turn tariff volatility into a competitive advantage.”
Key Findings: #
“Use a three-step process to determine your strategic response: (1) Assess strategic demand-and-supply-side risks, (2) Assess market risks, and (3) prioritize or determine not to take action.”
“Balance tariff uncertainty versus potential impacts versus response implementation lead time to determine the optimal timing for change initiatives to commence.”
Gartner® Report: Use Tariff Volatility to Drive Competitive Advantage
“Amid this uncertainty, executive leaders must find a meaningful way to strengthen their enterprises’ response and, where possible, build competitive advantage within the evolving trading environment."
“For each critical product or service, use the matrix in Figure 1 to help you anticipate how your enterprise should respond in a world without competitors. Then, layer over this how you anticipate your customers and suppliers will respond given the criticality to their enterprise and elasticity of demand ‘
“Retire: Enterprises may need to discontinue products due to tariff-induced financial strain and lack of viable mitigation options.”
“Renovate: Companies should assess whether small adjustments and passing on costs can sustain a product’s viability amid tariff challenges.”
“Rebalance: Businesses must absorb and invest to adapt to either benefit from or mitigate the impact of tariffs to maintain profitability.”
“Reinvent: Enterprises transform operations, relying on their own investments and cost-sharing with competitors, ecosystems or geopolitical actors.”
“Reinvigorate: Companies unaffected by tariffs can capitalize on their competitive edge and leverage cost-sharing with competitors, ecosystems or geopolitical actors to expand and strengthen market presence.”
“Demand- and supply-side risks and opportunities enable you to evaluate and anticipate market risks and opportunities.
Using the same matrix in Figure 1, determine what your competitors are likely to do given the demand- and supply-side risks. This will enable you to answer three key questions about your competitors.”
“What is the likelihood they will pivot their strategy?”
“What is the likelihood they will collaborate or compete with you?”
“What is the likelihood they will pivot and succeed better or faster than your organization?”
“Use the data in Figure 5 detailing enterprise-level actions being taken as a direct response to tariffs to help inform your assessment.”
Tariff-proof Your Supply Chain with Flexible Warehousing Infrastructure #
Potential tariffs create significant challenges for companies, including increased operational complexity, costs, and labor shortages. These challenges can strain warehouse operations as companies manage inventory from diverse sources and handle larger volumes. To remain competitive, companies must optimize inventory and fulfillment, and flexible warehousing solutions can enable them to respond rapidly to shifting sourcing, increased stock levels, and just-in-case strategies. Traditional solutions, with their long lead times, are less effective in mitigating these challenges.
- Secure Warehousing for Forward Buys: Mitigate tariff impact by securing space for imported finished goods and raw materials.
- Strategic Sourcing: Leverage Flexe's network to identify cost-effective warehousing solutions tailored to your needs.
- Rapid Deployment: Implement capacity solutions within 2-4 weeks to move inventory ahead of potential cost increases.
- Flexible Terms and transparent pricing: Avoid long-term commitments with short-term, flexible leases for adaptability. Benefit from a transactional pricing model for cost predictability and alignment with usage.
All without investing in long-term commitments to a location—and with a single, risk-free integration.
Infographic: Tariff-Proof your Supply Chain with Flexe.
Gartner, Use Tariff Volatility to Drive Competitive Advantage Published 18 February 2025, By Suzie Petrusic Et Al. This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Flexe. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
