CFOs Face Margin Squeeze as Global Supply Chains Fracture

According to PYMNTS.com, their August 2025 Certainty Project surveyed 60 CFOs at U.S. middle market companies generating $100 million to $1 billion in revenue to assess how macroeconomic forces and policy risk are impacting business operations. The data reveals that 75% of CFOs raised prices in the past year, yet 60% still reported declining profit margins, with globally exposed firms suffering nearly double the margin erosion (75%) compared to domestic-focused peers (38%). Companies sourcing 30% or more inputs from abroad were four times more likely to operate under high regulatory uncertainty, while 83% of firms experiencing high uncertainty reported operational disruptions including compliance costs and planning difficulties. The estimated cost of uncertainty has declined from 17% of revenue in early 2024 to 6% currently, but remains a significant drag on performance.

The Hidden Dangers of Supply Chain Concentration

What this data reveals is that supply chain geography has become a primary risk factor for middle market companies. The four-fold increase in regulatory uncertainty for firms with substantial international sourcing suggests that tariff policies and trade restrictions are creating structural disadvantages for globally integrated businesses. This isn’t just about cost—it’s about predictability. When 93% of globally exposed firms report supplier price increases while simultaneously facing reliability issues, it creates a compounding effect that undermines financial planning and operational stability. The traditional CFO toolkit of price adjustments and cost controls appears insufficient against this level of systemic disruption.

The Illusion of Pricing Power

The most concerning finding may be that three-quarters of companies implementing price increases still experienced margin compression. This suggests we’re witnessing a fundamental breakdown in traditional pricing strategies. When input costs and logistics volatility create persistent upstream pressure, simply passing costs to customers doesn’t preserve profitability. The data indicates this is particularly acute in B2B markets, where nearly half of CFOs report lower customer demand. This creates a dangerous feedback loop: companies raise prices to protect margins, demand softens further, and the revenue base contracts even as costs remain elevated.

Implications for Financial Services and Technology

For fintech providers and traditional financial institutions, this environment demands new approaches to risk assessment and product design. The concentration of policy risk in cross-border supply chains means underwriting models must now incorporate geopolitical factors and supplier geography as core risk variables. The 83% operational disruption rate among high-uncertainty firms suggests onboarding timelines, fraud controls, and program governance will become increasingly variable. Financial technology providers that can offer real-time supply chain visibility, dynamic hedging instruments, and flexible payment terms will capture significant value in this volatile environment.

The Broader Economic Picture

These findings reflect deeper macroeconomic shifts that extend beyond temporary market conditions. The skepticism toward protectionist policies—with 80% of internationally reliant firms concerned about “America First” approaches—suggests business leaders see interconnected global trade as essential to competitiveness. The friction described in the survey isn’t merely administrative; it represents real economic costs that reduce efficiency, innovation, and growth potential. As companies respond by delaying capital expenditure and diversifying suppliers, these individual decisions aggregate into slower economic momentum and reduced productivity gains across the economy.

Strategic Imperatives for the Next Phase

Looking forward, successful navigation of this environment will require more than reactive adjustments. Companies need to build resilience through supplier diversification, inventory optimization, and scenario planning that incorporates political risk alongside traditional financial metrics. The decline in uncertainty costs from 17% to 6% of revenue suggests some adaptation is occurring, but the remaining drag indicates structural challenges persist. Financial leaders who can transform their organizations from passive recipients of policy impacts to active managers of geopolitical risk will create sustainable competitive advantages in this new era of economic fragmentation.