Dive Brief:

• About half of C-suite executives are considering spending cuts in the second quarter amid macroeconomic challenges, according to Gartner findings released Tuesday.
• In a March webinar poll, 49% of corporate executives said they’re considering a budget cut for their function as a result of the economic impact and uncertainty of new U.S. federal policy changes. Another 58% of respondents said they anticipate tariff-fueled supply chain disruptions. More than 600 corporate executives and business leaders were polled, Gartner said.
• “Organizations are navigating unprecedented levels of uncertainty, and our survey reveals that many are taking proactive steps to adapt,” Alexander Bant, chief of research for Gartner’s finance practice, said in a press release. “CFOs and their teams must ensure that steps taken to help guide cost cuts are done in a measured way that doesn’t impact resilience and long-term performance.”

Dive Insight:

Sweeping U.S. trade and tariff policy changes since President Donald Trump returned to the White House for a second term have stoked global economic fears, creating uncertainty for business leaders.

The U.S. economy shrank at a 0.3% annual rate during the first quarter, the Commerce Department said last week, as previously reported by CFO Dive. This came as companies stepped up imports in anticipation of tariffs announced early this month against virtually every U.S. trade partner.

Ford CEO Jim Farley said in a Monday earnings call that Trump’s tariffs could cost his company about $1.5 billion in adjusted earnings before interest and taxes. The automaker also announced that it was suspending its guidance for the full year in light of tariff-related risks.

“These near-term risks include, among other things, industry-wide supply-chain disruption impacting production, future or increased tariffs in the U.S., changes in the implementation of tariffs, including tariff offsets, retaliatory tariffs, and other restrictions by other governments, and the potential related market acts, and finally, policy uncertainties associated with tax and emissions policy,” Ford CFO Sherry House said during the call.

Meanwhile, Apple CEO Tim Cook said during an earnings call last week that his company estimates a tariff impact of $900 million in the next quarter, assuming the current global tariff rates, policies and applications do not change for the balance of the quarter and no new tariffs are added.

In Gartner’s survey, 42% of respondents said they are bracing for reduced demand, while 41% said they expect accelerated inflation to impact their operations.

Besides budget cuts, corporate executives are weighing steps such as altering go-to-market, product and geographic mix strategies (38%) as well as pausing major projects (26%), according to the research. Only 5% of respondents said they were considering temporarily scaling back artificial intelligence initiatives.