Maneuvering through macroeconomic mayhem and tariff turbulence

Introduction: current market uncertainty and volatility

The global economy, especially in the US, is experiencing unprecedented volatility marked by significant policy shifts and economic uncertainties. New tariff implementations are causing ripple effects across supply chains while potentially driving up costs for key technologies, including personal computers (PCs), semiconductors and IT infrastructure (servers, storage, and networking equipment), which affect both enterprise and SMB IT spending, resulting in order cancellations or delays.

When asked what they expect to be the most significant challenges to their business in 2025, geopolitical volatility and uncertainty were ranked as the #1 challenge by most partners ahead of meeting revenue targets, which will also be impacted by geopolitical and economic factors.

These factors are already causing partner sentiment and revenue forecasts to weaken in 2025. For example, partners expecting year-over-year growth in 2025 have dropped 33 percentage points from February 2025 to April 2025; the timeline coincides with the US President’s initial executive orders of tariffs on Canada, Mexico and China. During that time, the President’s executive orders underwent several iterations, including additions, adjustments, reprieves and the latest suspension.

Tariff turbulence

The unpredictable tariff landscape has created significant uncertainty for IT suppliers and channel partners. Recent Canalys (now part of Omdia) poll results reveal a shift in sentiment regarding the impact of tariffs. In February 2025, many partners were more optimistic about the effects of tariffs on their business, with only 17% stating it would be a disaster and would have a major impact, while 41% saw it as good news for their business; conversely, in April 2025 the disaster responses rose to 26% (+9 percentage points) and the good news responses dropped to 21% (-20 percentage points).

Looking into the US and the rest of the world (RoW) insights, there are stark differences in partners’ sentiments regarding the impact of tariffs on their businesses. For example, in February 2025, 19% of US partners stated the tariffs were a disaster and would have a major impact; this doubled to 38% (+19 points) in April 2025. For the RoW, in February, 17% stated tariffs were a disaster, which was nearly the same as 16% (-1 point) in April. Partners from both segments lowered their enthusiasm from February to April, for example, the percentage of partners in the US that stated the tariffs were good news declined 12 points, while the RoW percentages dropped 29 points.

These shifts in partner sentiment reflect the effect of tariffs increasing procurement costs and component prices. When partners pass on these increased costs, they produce lower margins and/or customer price hikes. For partners with high concentrations of price-sensitive SMB customers, price increases may not be an option. Other effects consist of supply chain disruptions from unstable inventory levels and client upgrade delays as they reassess IT spending priorities.

How to triumph in turbulence

To effectively navigate the current tariff environment, IT suppliers and partners need to:

• Both:
  • Be transparent by communicating with partners and clients, respectively, about price increases linked directly to tariffs, allowing partners time to adjust their pricing models and clients time to adjust their budgets.

• Suppliers:
  • Establish manufacturing and assembly operations in tariff-neutral countries and/or emerging markets with favorable trade policies.
  • Expand inventory hubs and expertise via local hiring and partnerships to minimize cross-border movement of goods.

• Partners:
  • Create region-specific services and diversify portfolios by reducing dependency on tariff-affected solutions, particularly hardware products.
  • Develop multi-vendor relationships to ensure supply chain resilience and enable product multi-sourcing.

Workforce worries

The labor market faces mounting pressure in the US, with an estimated 280,000 government employees and contractors losing their jobs, primarily due to actions taken by the US Department of Government Efficiency (DOGE). Some of the departments vastly impacted by layoffs are the Department of Veterans Affairs (VA), the Defense Department and the National Institutes of Health (NIH); these are potential areas partners could target for future government contracts.

New and more stringent immigration policies are adding another layer of complexity, impacting workforce availability, and intensifying a growing skills shortage for many businesses. These factors, combined with broader economic policy shifts, are creating a challenging environment where businesses must navigate both immediate disruptions and long-term changes in the market landscape. As a result, these macroeconomic factors are reshaping partner business models, partner-supplier relationships and customer buying behaviors.

Macroeconomic mayhem

The current market volatility is creating a complex operating environment for IT suppliers and partners worldwide, requiring them to rethink strategies for growth, customer engagement, and risk management or risk exiting before the market recovers. The change in partner perspectives regarding macroeconomic conditions, such as new government laws, the job market and economy, shows this—between Q4 2024, during the time of the US elections, and Q1 2025, after the first set of tariffs were announced.

At the end of 2024, most partners were relatively positive. 45% of partners said new government laws were having a positive impact on their business versus 3% who stated a negative impact, 30% said the job market had a positive impact versus 4% who stated a negative impact, and 39% stated a positive economy impact versus 14% who stated a negative impact.

The negative sentiments have risen more than the positive between Q4 2024 and Q1 2025. For example, negative sentiments regarding new government laws rose 10 points, whereas positive ones rose 8 points, negative job market sentiments rose 16 points and positive ones rose 11 points, and negative economic sentiments rose 17 points and positive ones dropped 1 point. There were also significantly fewer partners stating that macroeconomic conditions did not have any impact on their business; for example, 66% said the job market did not have any impact on their business in Q4 2024, but only 39% said the same in Q1 2025.

How to weather the storm

To weather the current workforce and macroeconomic conditions, IT suppliers and partners must:

• Both:
  • Create a risk management plan that offers contingencies for various economic scenarios and financial flexibility via contract renegotiations with either manufacturers or IT suppliers.
  • Recruit and hire ex-employees from sectors most impacted by DOGE layoffs, like the federal government, and upskill and retrain the current workforce to address government IT needs.
  • Use automation and AI tools such as GenAI and Agentic AI to improve efficiency, optimize business operations, and offset potential supply chain cost increases.
  • Review and dynamically adjust pricing models (flat-fee, subscription or consumption-based) to maintain margins while staying competitive.
  • Use inventory management systems that offer the best visibility and help forecast and mitigate supply chain disruptions.

• Partners:
  • Obtain required certifications to bid and win new deals or displace incumbents after government agency downsizing and shutdowns, which may increase demand for outsourced IT services.
  • Expand and enhance services by offering more high-growth and high-demand solutions such as compliance and regulatory consulting, AI, cloud, and cybersecurity.

Conclusion: overcoming instability through flexibility

Macroeconomic instability, rising tariffs, immigration uncertainty and supply chain constraints are causing significant challenges that demand IT suppliers and partners to rethink how to operate in the short and long term. Sentiment across the channel has shifted from cautious optimism to active concern, with more partners reporting negative economic outlooks and tangible business disruptions. Tariffs, in particular, have the most significant potential to squeeze margins, elongate sales cycles and accelerate the need for source, supply, and service diversification.

But volatility breeds opportunity and those who act boldly—by regionalizing supply chains, accelerating as-a-service offerings and embracing more local go-to-market strategies—can obtain a competitive edge. There is no better time than now, for suppliers treat channel partners as equals by enabling them as strategic value creators. Partners themselves must move beyond transactional hardware sales to more advanced services like subscription-based cloud and SaaS, and consulting/ advisory roles with recurring models. In today’s volatile markets, taking a strategic approach that is flexible and adaptable will be vital to staying competitive and resilient.