Tariffs and Lean Software Testing when Under Economic Pressure

Over the past few days, we’ve watched the market grapple with the announcement of increased tariffs on imported goods. If you’re a product leader, you might be thinking: What does this have to do with software testing, or how we build and deliver digital experiences? On the surface, tariffs affect physical goods crossing international borders. But tariffs can also create a ripple effect that influences budgets, resource allocation, and strategic priorities. Nowhere is this more evident than in the sometimes under-appreciated domain of software testing.

In product organizations—especially those deeply tied to global supply chains—these tariffs can trigger cost pressures that lead to the all-too-familiar scramble to protect margins. And when companies scramble, discretionary budgets often get cut. Historically, that has included investment in product R&D, innovation, and, quite frequently, software testing. As many of us have learned, cutting back on testing is often a misguided approach in the long term, but in a reactionary climate, it’s unfortunately common.

To illuminate how this might play out in practice, I recently spoke with three different customers (and heard about another from a separate source) to understand how they anticipate these tariffs could affect their testing efforts. Their stories and strategies provide key lessons not only for QA managers but for all product leaders who must balance user needs with financial realities.

Context and Customer Insights

Customer 1: US Large Retail Brand

• Situation: This major US retailer imports a significant portion of its consumer goods from China, Vietnam, and Indonesia. With these new tariffs, they are anticipating increased costs on their supply chain. Their stock tumbled roughly 11% over the last two days—an immediate market response to the potential impact on profitability.
• Impact on Testing: Historically, when retail stocks dip, senior leadership looks for places to reduce expenditures quickly. Testing often lands on the chopping block because it can be seen as an “overhead” or a non-revenue-generating function. While we all know testing is crucial to a great product experience, the reality is that finance or operations jump to budget cuts across the board.

From a product perspective, the risk is that cutting software testing budgets may result in lower-quality releases, which in turn can negatively affect user trust, brand reputation, and revenue over time. The question product leaders here need to ask is: How do we reduce software testing costs in a way that doesn’t sacrifice user experience or create downstream revenue loss?

Customer 2: US-Based Financial Institution

• Situation: This institution performs most of its testing domestically. They do utilize some automation scripting resources offshore—specifically in Lithuania—but it’s a small part of the overall process. Because their main lines of business are heavily regulated, the organization has a robust compliance framework that they can’t simply reduce overnight. Their initial view is that the new tariffs on physical goods won’t have a direct impact on them.
• Impact on Testing: They don’t anticipate big changes. That said, the danger for any heavily regulated industry is complacency. As product leaders, if we assume we’re immune to economic shocks just because we’re not importing tangible goods, we could be caught off guard by secondary effects. For example, if the financial markets become turbulent, the institution might face increased pressure to reduce costs elsewhere (e.g., vendor costs, technology investments) to maintain profitability.

In the short term, this customer remains stable in their testing approach. But longer term, if the market experiences continued volatility, we could see CFOs pressing for new vendor negotiations or cutbacks, which might cause them to revisit how they source QA. That’s why it’s always wise to maintain a continuous improvement mindset within product organizations—constantly looking for more efficient ways to deliver value, regardless of economic conditions.

Customer 3: Software Testing an International Wellness Application

• Situation: This growing wellness app company already began shifting more testing to the developers themselves. They employ a globally distributed engineering team, and a subset of their software testing is outsourced to an Indian testing firm. The head of engineering sees a potential economic downturn from tariffs as a signal to accelerate the move toward “developer-owned” testing.
• Impact on Testing: This shift highlights a broader trend we see in modern product teams: the lines between development, testing, and even product management can blur in the push toward continuous delivery, DevOps, and agile practices. The impetus to save money by reducing reliance on external software testers can spark positive changes. For instance, if developers are empowered—and skilled enough—to own the majority of testing, it can lead to faster feedback loops and higher-quality code before it ever gets to QA.

However, it’s critical to do this with a clear strategy. Merely transferring the testing workload to developers without properly equipping them (technically and culturally) can result in half-baked tests, overlooked defects, and burnt-out teams. For product leaders, the key question is: How can we ensure that taking on more testing responsibilities doesn’t come at the cost of innovation? If developers spend all their time writing tests instead of building new product capabilities, you may slow your team’s velocity. The challenge is finding the balance that maintains a healthy workflow and fosters both innovation and quality.

Customer 4: The Manual Software Testing Organization

• Situation: Our fourth customer, though I haven’t spoken with them personally, relies heavily on a few hundred manual testers scattered across multiple offshore locations. They have minimal test automation in place—especially on mobile—and are struggling to keep testing costs under control.
• Impact on Testing: This situation is precarious under normal market conditions because manual testing at large scale is typically slower, more prone to human error, and expensive. When you add the possibility of tariff-induced financial pressure—especially if those manual testers reside in impacted regions or if budgets tighten across the board—their software testing costs could become unmanageable. That puts them in a difficult position: unless they invest in automation and streamline their process, they may be unable to handle the demands of a modern mobile user base while also weathering economic stress.

For product leaders, this highlights the importance of forward-thinking investments. If you underinvest in test automation year after year, eventually you’ll hit a tipping point. Either you’re forced to make a large (and sometimes sudden) move to automation at the worst possible time, or you risk releasing subpar experiences and losing user trust. This is precisely the type of scenario that advanced planning and continuous investment in product infrastructure can help prevent.

Why Product Leaders Should Care

You might be wondering: Should product leaders really be concerned about potential tariff impacts on software testing budgets? The answer is yes—for two main reasons:

1. Protecting the Product Experience
   The user experience is only as good as your ability to ensure quality. If the software testing budget is slashed too deeply, defect rates can rise, leading to user frustration, higher churn, and potential brand reputational damage.
2. Balancing the Innovation-Quality Tradeoff
   When costs must be contained, product leadership is key to deciding how to manage that tradeoff. Investing in the right level of automation, harnessing new technologies, and adopting risk-based testing can help you keep quality high while optimizing spend.

Strategies to Reduce Software Testing Costs (Without Undercutting Quality)

Here are some approaches that can help organizations navigate cost pressures in software testing while striving to keep the product experience strong:

1. Increase Automation With Generative AI
   The testing landscape is evolving thanks to AI-driven tools that reduce the manual effort needed to write and maintain scripts. Consider technologies like Kobiton’s Scriptless Automation or Kobiton’s Appium Script Generator. These Kobiton features leverage Generative AI to accelerate the path to automation and handle more rote parts of scripting, allowing teams to:
   
   • Quickly develop automated tests,
   • Lower the reliance on large manual testing teams,
   • Run tests continuously and provide rapid feedback to developers.
2. Dogfooding and Crowdtesting
   The concept of dogfooding—having your own employees, or even friends and family, test your product—has grown in popularity with the rise of TestFlight and other quick-build distribution methods for mobile apps. This approach can be beneficial for detecting obvious usability or functional issues early, and it can lower the cost of formal software testing cycles.
   However:
   
   • It’s best used as a complementary strategy, not a replacement. The core value is in obtaining immediate feedback and building empathy among the product team for the end user’s experience.
   • Relying solely on dogfooding can be risky if your product demands high reliability or compliance (e.g., financial or healthcare apps).
3. Risk-Based Testing
   Not all features or code branches carry the same level of risk. Instead of running a comprehensive regression suite for every minor commit, consider a tool like Appsurify that helps you apply a more targeted approach. By pinpointing the highest-risk areas in your code changes, you can:
   • Run only the tests that are most relevant, reducing the total test suite execution time.
   • Accelerate your release pipeline without significantly increasing risk.

The Question: Could Tariffs Apply to Services Like Software Testing?

It’s an interesting thought: What if tariffs extended beyond physical goods and started targeting offshore testing services? In theory, a government could impose financial penalties on companies that outsource software testing overseas. Practically speaking, this is complex:

• Historically, Tariffs Are for Goods, Not Services
  Services are intangible and not easily measured at customs. Traditional tariffs apply at ports of entry to physical items, meaning it’s straightforward to tax a shipment of electronics or clothing. Software testing doesn’t cross a physical border the same way; it’s mostly digital.
• Digital Services Taxes Are Emerging
  In some countries—particularly in Europe—there are new taxes aimed at large digital service providers. These aren’t typically framed as “tariffs” but more as a method for taxing revenue from certain services delivered online. They can indirectly raise the cost of international outsourcing but are not the same as a tariff on testing.
• Implementation Challenges
  Even if a government wanted to impose a tariff on services, the enforcement would be extremely difficult. How do you track the work done by a QA team in another country, especially if the company’s infrastructure is in the cloud and employees work remotely? It becomes a complex regulatory question—and one that many governments aren’t eager to solve right now.

So, while it’s possible that some form of indirect taxation or surcharge on services might appear in the future, it remains unlikely today. For product leaders, the more pressing concern is how macroeconomic events—like tariffs on goods—create financial pressure that trickles down to product teams and software testing budgets.

India Gives the ‘Google Tax’ the Boot

What This Means for Your Product Team

1. Don’t Wait for a Crisis to Invest in Software Testing Infrastructure
   If your organization underinvests in testing, you risk a major scramble when finances tighten. By the time you must cut costs, it’s often too late to do so gracefully. Product leaders who continuously invest in automation, developer testing capabilities, and intelligent test planning stand a better chance of staying resilient when budgets get tight.
2. Focus on Outcomes, Not Output
   A hallmark of great product teams (and a core principle we consistently emphasize) is focusing on meaningful outcomes. In testing, an “outcome” could be measured by how quickly you detect regressions or the user satisfaction score upon release. When cost-cutting initiatives come down the line, being able to articulate software testing’s impact on user and business metrics is far more convincing than simply showing the volume of test scripts you ran.
3. Enable Cross-Functional Partnerships
   Software testing should not exist in a silo. Product managers, developers, designers, and testers must collaborate closely so that quality is baked into the product from the get-go, not tacked on at the end. If developers and product managers understand user pain points and risks from the start, testing efforts become more focused and efficient.
4. Have a Plan B for Rapid Reallocation
   When crises hit—whether tariffs or another economic shock—product leaders who can swiftly reprioritize resources are at a distinct advantage. Instead of panic-induced, across-the-board budget cuts, have data on where testing is most needed and which tests have historically caught the most critical bugs. This insight will help you make targeted reductions if necessary, preserving the core coverage you need.

Final Thoughts

Tariffs on imported goods might feel far removed from the day-to-day work of software testing. But as we’ve seen from the experiences of these four customers, any event that increases financial strain on an organization can lead to belt-tightening. For many companies, software testing is viewed as a cost center, making it a prime candidate for cutbacks.

Yet great product leaders realize that quality is inseparable from user satisfaction. You can’t produce a delightful and high-performing product if it’s riddled with defects. Cutting software testing too aggressively erodes user trust and can set off a downward spiral of bad reviews, poor retention, and lost revenue.

The good news is that modern technologies and strategies—like AI-driven test automation, risk-based testing, and thoughtful dogfooding—offer product teams ways to maintain high quality at lower costs. They align well with agile values, continuous delivery practices, and the broader cultural shift toward empowered, cross-functional product teams.

Finally, while tariffs on software services remain unlikely in the near term, there’s no guarantee that other forms of legislation or taxation couldn’t eventually affect outsourced software testing. The best defense is, as always, proactive adaptation. Build a QA function that’s lean yet effective, adopt tools that amplify your team’s productivity, and stay vigilant about external risks. By doing so, you not only safeguard your product’s quality but also uphold the core principle that great products come from empowered teams taking ownership of the entire user experience—from ideation to robust testing—no matter what external pressures may arise.