Maybe Scenarios Are The Best Way to Factor in Tariff Risks

 In a tense era of trade tariffs maybe working on various scenarios is the best way forward?

Heads of enterprise risk management (ERM) are well positioned to identify potential tariff impacts for their organization by assessing their risk in three steps, according to Gartner, Inc.

The three steps ERM leaders should follow include:

• Assess how tariff risks impact their organization
• Prepare risk owners to navigate tariff volatility and uncertainty
• Engage in proactive scenario analysis

“ERM is well positioned to help its organization navigate the effects of a volatile tariff environment,” said  Alex Ossington, Director, Advisory in the Gartner Assurance Practice. “It’s likely that most organizations globally will encounter tariff-related challenges that will impact their ability to deliver goods and services.”

Assess How Tariff Risks Impact the Organization
To best prepare for the impact, extent and duration of the U.S. tariff policies, ERM leaders can identify which risks are most relevant to their organization, such as supply chain disruptions, retaliatory tariffs, and regulatory and compliance risks. When assessing these risks ERM teams should develop key risk indicators to provide triggers for any planned mitigation action.

Prepare Risk Owners to Navigate Tariff Volatility and Uncertainty

The first step involves working closely with the chief supply chain officer (CSCO) to evaluate the organization’s exposure to tariffs and other related risks. Key questions to address include:

1. What significant risks are posed to our organisation by tariffs?
2. Who are our critical suppliers and what impacts are they likely to experience? If they are impacted, how significantly will that disrupt our operations?

“ERM leaders should work with the CSCO to implement processes to monitor at-risk materials, map manufacturing locations, and evaluate logistics landscapes; leveraging the organization’s risk appetite to right-size risk response,” said Ossington.

Engage in Proactive Scenario Analysis

According to a Gartner poll of 193 CFO and finance leaders in March 2025, 53% of CFOs and finance leaders plan to update their risk assessments, scenario planning models, and contingency plans to address the evolving tariff landscape and potential future escalations.

“ERM teams are uniquely positioned to spearhead scenario analysis efforts, enabling organizations to anticipate and mitigate tariff impacts effectively,” said Ossington. “By engaging risk owners in dedicated sessions, ERM teams can help CFOs to identify value at risk, recognize interim signals, and implement low-cost actions promptly.”

Additional information is available to clients in the Gartner report Tariff Risks to Assess: 3 Steps ERM Can Take Now,

About the Gartner Enterprise Risk, Audit & Compliance Conference

Taking place on September 8-9, 2025 in Grapevine, Texas, the Gartner Enterprise Risk, Audit & Compliance Conference will cover the challenges mission-critical to enterprise risk, audit and compliance executives, across six topic areas: Third party risk management; Business risk ownership; Governance, risk and compliance tool; Compliance program effectiveness; Digital audit function; And emerging risk landscape. Follow news and updates from the conferences on X using the hashtag #GartnerERAC.