How CPOs Can Protect Their Supply Chains Against Tariff Risk—Without Overreacting

Key takeaways

• Category-level exposure mapping is essential. Leading CPOs are moving beyond headline tariff numbers to analyze impact at the spend-category level, enabling targeted mitigation strategies and more resilient sourcing decisions.

• Total cost of ownership matters more than price. Tariff response must account for total cost of ownership (TCO), not just unit price increases, to avoid unnecessary supplier changes that create greater long-term cost or risk.

• Renegotiation alone is not a strategy. While price renegotiation plays a role, effective tariff risk management also requires contract redesign, supplier segmentation, and short-term supply stability planning.

• AI enables proactive, proportional responses. AI-powered tariff modeling, always-on monitoring, and scenario analysis allow procurement teams to anticipate escalation cycles and make data-driven decisions before disruption intensifies.

Tariffs, and the risks they bring for procurement organizations, are continuing to dominate headlines in 2026, as they did throughout 2025. For many of us, they were at the very top of our agendas, creating a raft of new challenges and bringing a new level of uncertainty to an already turbulent global supply chain landscape.

It’s a challenge that’s far from over. With new tariff pressure points on the horizon, CPOs are once again carefully planning how they’ll respond to looming escalation cycles. There’s a lot at stake, but as some of the most successful procurement leaders discovered in 2025, the key to success is to react quickly and proportionally.

Work to understand your exposure on a deeper level

When you’re focused on the tariff headlines, it’s all too easy to overreact. The numbers are large, and their downstream impacts are far-reaching. So, if you want to respond appropriately, you need to dig down a little and build a more complete view of exactly what each tariff shift will mean.

One strategy that’s proving valuable so far is category-level exposure mapping. By taking a category-centric view of tariff impact and exposure, CPOs can better understand which spend categories will be most impacted by tariff escalations and begin to model various downstream effects on that category.

Equipped with that information, procurement decision-makers can proactively build more resilient category strategies that help mitigate cost impacts of new tariffs, while also ensuring continuity of supply for critical goods and materials.

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It’s also critically important to think about tariffs in terms of their impact on total cost of ownership, not just price. By revalidating TCOs in light of tariff escalations, you can understand their broader impact on spend over time and spot situations where renegotiating or changing your supply strategy may not be worth the effort.

There are better ways to protect your supply chain than pure price negotiation

When prices surge, we naturally go straight to renegotiation. Yet, often, those last-minute renegotiations fail to deliver. That’s typically because:

• They are based on rushed analysis, gut feelings, or incomplete data

• Even those with access to reliable forecasts and strong data are uncertain, and reluctant to make major decisions while conditions remain so fluid

• Suppliers are facing the same challenges too, and need to safeguard their own operations and financial stability

Price renegotiation is important. But it’s just one part of the puzzle when it comes to appropriate and effective tariff escalation response. If it doesn’t go your way, you can end up in a worse position than before.

Alongside renegotiations, leading CPOs are placing increased focus on:

• Contract design to strike the perfect balance between flexibility when things like future prices appear uncertain, and stability to ensure you still get what you need if supply becomes more costly or constrained.

• Supplier segmentation to understand which suppliers are worth renegotiating with, and which may represent the greatest value in the new post-tariff world.

• Maintaining stability of supply in the short term so that the immediate disruption caused by a tariff escalation doesn’t lead to costly unplanned downtime or hinder their operations.

Tackling 2026’s tariff pressure points today

While it can feel like this spike in tariff activity has come at an extremely difficult time for procurement leaders, with so many other forms of disruption occurring too, in one sense it’s actually quite fortunate that all of this is happening right now.

The maturation of AI and all of the new insight, modelling and analysis capabilities that have come along with it is finally helping procurement leaders evolve past reactive decision-making, and embed truly proactive processes and operations.

Equipped with the right insights and AI-enabled capabilities, CPOs and their teams can prepare for tariff escalations earlier in their cycle, and make better-informed decisions to safeguard their supply chains, and ensure supply continuity at the right price.

At WNS Procurement, part of Capgemini, we’ve recently helped procurement leaders implement AI-powered solutions that have enabled them to:

• Embed tariff risk into their operations and make tariff risk monitoring an always-on process, enabling faster, better-informed responses when new escalation cycles begin.

• Model the impacts of potential tariff levels before they’re even announced and get in front of disruption by laying out clear response plans ahead of time.

• Diversify their supplier portfolios and safeguard against overreliance on a single supplier or geography, especially those caught within regions at risk of having new tariffs placed on them.

• Visualize tariff risk at the category level and quickly understand the knock-on impacts new tariffs are likely to have on global markets.

• Renegotiate with confidence and step into meetings with suppliers equipped with reliable data that reinforces their position and helps them negotiate the contract terms they need to mitigate tariff disruption.

Ultimately, a CPO’s ability to manage tariff risk effectively comes down to three things:

• visibility of tariff risks as they emerge

• a clear view of how tariffs are likely to impact them

• reliable and timely data so that they can make informed response decisions immediately.

That’s why AI is such a crucial piece of the puzzle. Implemented in the right way, it can provide CPOs and their teams with all three. Panic is replaced with proactivity, and reactions become proportional, informed, and supported by robust data.

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About the Author

Mita Gupta is EVP and Business Unit Head of WNS Procurement, part of Capgemini. She is responsible for the WNS Procurement’s strategy, growth initiatives and financial performance. Mita has decades of experience launching and scaling B2B businesses across services and technology. She has driven the rapid expansion of some of the most successful companies in the procurement and supply chain sectors across dozens of countries in North America, EMEA and APAC. Mita has held senior global leadership roles at Cprime (a portfolio company of Goldman Sachs Asset Management); Globality; GEP Worldwide; and Kearney.

FAQs

Q: How can CPOs assess their exposure to new tariffs?

CPOs should conduct category-level exposure mapping and integrate tariff impacts into total cost of ownership models to understand where escalation will most affect spend and supply continuity.

Q: Why is total cost of ownership critical in tariff response?

Focusing solely on price increases can lead to overcorrection; TCO analysis helps procurement leaders evaluate long-term cost implications, switching costs, and continuity risks.

Q: What role does AI play in managing tariff risk?

AI enables real-time tariff monitoring, scenario modeling of potential escalation levels, supplier diversification planning, and data-backed renegotiation strategies.

Q: How can procurement avoid overreacting to tariff headlines?

By embedding tariff risk into ongoing operations, using structured data analysis, and balancing flexibility with contract stability, CPOs can respond proportionally rather than impulsively.