When Tariffs Meet Strategy: The New CFO Calculus

Even before the ongoing United States government shutdown began on Oct. 1, the Trump administration’s global tariffs regime was forcing U.S. middle-market firms to recalibrate their strategies for an uncertain 2026. On the one hand, consumer spending continued to modestly increase in August, the most recent Bureau of Economic Analysis data shows, and most CFOs remained confident about their long-term resilience when surveyed by PYMNTS Intelligence in the second half of September. On the other hand, which companies said they were investing for growth tells a more complex story. Many goods-sector firms are tightening their belts, hedging against shifting demand, rising costs and tariff risks. Meanwhile, services firms are leaning into growth, channeling working capital into technology, talent and innovation.

The shutdown injects a second layer of uncertainty, this one more short-term than the longer-tail trade policy shift. The Congressional Budget Office estimated on Oct. 29 that the stoppage will cost between $7 billion and $14 billion in real GDP, depending on how long it lasts. How consumption trends might change due to federal workers and contractors not receiving pay and some low-income consumers not receiving full food benefits isn’t quantifiable. Unpaid workers have less money to spend, and “the temporary reduction in aggregate demand that lowers output in the private sector will temporarily reduce employment and increase unemployment,” the nonpartisan federal agency said.

The result is that even before the shutdown, a tale of two middle-market strategies emerged: one of restraint, the other of reinvention. With tariffs now an entrenched variable in financial planning and the government shutdown inflicting short-term pain, the coming year will test which strategy proves more durable in a volatile global economy.

These are just some of the findings detailed in the November edition of the PYMNTS Intelligence Certainty Project, “Revising the Roadmap: How Tariffs Are Transforming CFOs’ Strategic Planning.” This edition examines firms’ investment strategies and delves into how tariffs are making executives rethink the year ahead. The study draws on insights from a survey of 60 CFOs of U.S.-based middle-market companies with annual revenues between $100 million and $1 billion. The survey was conducted from Sept. 15, 2025, to Sept. 24, 2025.

• Changing Investment Strategies
• Tariff Exposure Affects Strategy
• Effects on Budget
• Read More
• Methodology

Changing Investment Strategies

Goods firms are somewhat cautious about the future, while services firms are investing in growth.

Whether directly or indirectly, tariffs impact most firms. That’s why nearly three in four CFOs are changing their investment strategy this year. But how they alter it is a function of what sector they’re in. Goods firms dependent on tariff-impacted supplies of materials and goods from abroad have shifted to a cautionary stance. Meanwhile, services firms, which rely less on foreign imports but still feel an impact because they work with goods firms that do, are leaning into growth strategies.

Right now, CFOs’ investment plans are nearly equally split between conservativeness and risk. Just over one in three firms are taking an at least somewhat cautious approach. Slightly more—38%—are pursuing a somewhat growth-oriented strategy. The two approaches differ depending on the type of business. Goods-sector firms are 46% more likely to opt for a cautious approach over a growth one. Put otherwise, goods firms are almost half as likely as services firms to pursue a growth-oriented strategy.

The two investment postures in the middle market landscape—restraint and growth—vary based on a company’s tariff exposure. Half of CFOs who expect tariffs to benefit their businesses report a growth-oriented stance. By contrast, none of those expecting negative impacts are currently pursuing growth.

Firms are changing strategies in response to tariffs.

Firms are recalibrating their financial plans in light of current economic conditions. More than seven in 10 CFOs report year-over-year changes to their investment strategies. While roughly one in three are more cautious than they were last year, 40% are now comparatively more growth-oriented than they were 12 months ago. Goods firms, especially, are pulling back, taking a more conservative approach.

Even many firms that are balancing growth and caution are now more cautious than last year. That is, 41% are more cautious, while only 29% are more growth-oriented.

As firms realign their investment priorities, different motivators drive different sectors. Goods firms are four times as likely as services firms to say that changes in customer demand or market dynamics drove their adjustments. They are also more likely to say that shifts in overall economic conditions, like rates and inflation, played a role.

Meanwhile, services firms are twice as likely to say internal capital expenditure priorities motivated their adjustments. Additionally, 38% of services firms report that they were motivated by technological advancements, such as new artificial intelligence (AI) capabilities. No goods firms said the same.

The majority of firms now in a cautious stance attribute their strategic pullback to shifts in macroeconomic conditions. Only 21% of growth-oriented firms say the same.

Tariff Exposure Affects Strategy

Companies most exposed to the impact of tariffs are playing it safe.

As most companies calibrate the impact of tariffs on their operations, they’re doing so in different ways. Seven in 10 goods firms, along with nine in 10 CFOs who expect tariffs to hurt their strategic planning and investments, said the global levies have considerably shaped their investment decisions. That’s almost double the rate of services firms. Companies facing heavier tariff exposure are also twice as likely to have cancelled planned investments.

The divide between companies pulling back on growth and those pushing ahead is stark. Some 44% of CFOs at firms highly impacted by tariffs have become more cautious compared to last year. This percentage is more than double the rate of CFOs at companies with a low impact from tariffs.

Among CFOs reporting considerable tariff impact, half now describe their investment strategy as cautious. This figure is more than four times the share of those less affected who said the same.

Tariff uncertainty is slowing investments. Four in 10 goods CFOs said that delaying planned investments was their primary response to tariffs. Moreover, the more negatively a business is impacted by tariffs, the more likely it is to cancel planned investments altogether. Thirty-four percent of firms facing considerable or critical impacts from tariffs have done so. By contrast, only 15% of those facing minor or moderate impact have done the same.

Effects on Budgets

Regardless of exposure, more than eight in 10 CFOs are integrating the impact of tariffs into their budgeting plans for the year ahead.

As tariffs reshape businesses’ strategic priorities, goods firms are focusing on how they approach their supply chains. Nearly two-thirds of goods-sector CFOs highlight this as a key area impacted by the U.S.’s trade policy. Among cautious investors, that figure is even higher, at 75%.

Meanwhile, services firms are more likely to be focused on building out their workforces and tech stacks. Specifically, 62% say tariffs have influenced their hiring and workforce planning. Additionally, one in four say their investments in technology and automation have been impacted.

The upshot is that the new global trade regime, anchored by the Trump administration’s often-fluctuating “reciprocal” tariffs on most countries, has moved onto corporate balance sheets.

More than eight in 10 CFOs say that their forecasts of the trade policy’s effects are at least moderately integrated into their annual budgeting for the upcoming fiscal year. Nearly four in 10 say they are deeply integrated.

Firms that are most exposed to tariffs and most pessimistic about their impacts are factoring them more deeply into planning. Specifically, 45% of goods-sector CFOs, 40% of firms with a cautious, not growth-oriented, strategy and 55% of CFOs who expect negative impacts say they are deeply integrating tariffs into their budgeting decisions.

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Methodology

“Revising the Roadmap: How Tariffs Are Transforming CFOs’ Strategic Planning” is based on a survey conducted from Sept. 15, 2025, to Sept. 24, 2025. The report examines firms’ investment strategies and delves into how tariffs are making executives rethink the year ahead. It draws on responses from 60 CFOs of U.S. middle-market companies in the goods and services sectors with annual revenues between $100 million and $1 billion.