Navigating US Tariffs: Trade Policy and the Global Treasury Landscape
Published: March 26, 2025
As President Donald Trump resumes office once more, tariffs have again taken centre stage as a potent tool in international trade. Stock markets have been sent reeling as fears of trade wars take hold. What does all this mean for the corporate treasurer? Josh Kroeker, Chief Product Officer, Mitigram, examines the consequences.
Already, Trump has imposed 25% tariffs on imports from Canada and Mexico, and 20% tariffs on goods from China, as well as threatening a 25% tariff on all European Union imports, set to take effect between now and April. In response, China, Canada and Mexico have all announced retaliatory action to protect their interests.
These policies will have a huge impact, reshaping global trade, forcing corporate treasuries to navigate supply chain disruptions, rising costs, and shifting risk dynamics.
Supply chain disruption
The imposition of tariffs will send shockwaves through supply chains, leading to increased costs, sourcing disruptions, and long-term strategic shifts. However, it is not just the tariffs themselves but the uncertainty surrounding their application that poses a major challenge for businesses. Tariffs have been imposed, revoked, and reintroduced multiple times, making long-term planning incredibly difficult for treasurers and supply chain managers.
The concept behind the tariffs is that faced with higher costs, US importers will look to domestic suppliers, providing a boost to US manufacturing. However, a lesson from history tells us as that this may well not be borne out in reality.
If we take the 2018 Trump-imposed tariff on imported washing machines for example – the measure pushed prices up by 9% above inflation, but triggered only a modest increase in domestic manufacturing. Despite the creation of new jobs as appliance makers set up factories on American soil, consumers collectively paid about $820,000 per job created.
Instead, importers will look to alternative sourcing and manufacturing locations such as Southeast Asia, and other emerging markets to reduce exposure. Even if the US were to introduce a universal 10% import tariff, studies suggest it wouldn’t bring back large-scale manufacturing. Instead, the biggest winners would likely be low-cost emerging markets not impacted by the tariffs.
The 2018 trade war may have reduced US dependency on China, but in reality, it was Mexico, Thailand, and Cambodia that benefitted the most as supply chains shifted.
For exporters in affected markets that have traditionally served the US, they will experience a decrease in demand, forcing them to consider new markets to maintain demand.
New markets, new risks
Diversification will bring its own set of challenges. Treasurers will need to way weigh the political, economic, and logistical risks before committing to new markets.
Moving production to emerging markets can bring geopolitical instability, policy uncertainty, and regulatory challenges. On top of that, weaker transport, logistics, and infrastructure can lead to supply chain inefficiencies, driving up costs and causing frustrating delays.
There are also other risks. Labour costs, skill shortages, and constantly changing regulations all impact profitability. Currency fluctuations only add to the complexity, meaning treasurers need to develop smart hedging strategies to manage exposure.
Meanwhile for exporters, identifying new export markets comes with its own set of risks in the form of unfamiliar partners and processes, that need be managed.
To tackle these challenges, treasurers for both importers and exporters must carry out thorough due diligence, put strong contingency plans in place, and work closely with local partners to reduce risks and keep supply chains running smoothly.
Embrace digital breakthroughs
To respond to these shifting trade dynamics, digital trade finance could be a game-changer. When dealing with new import/export partners, stronger payment types such as LCs become a necessity to manage risk. While some treasurers may not have dealt with an LC for years, today’s digital solutions make them far less cumbersome and paper-intensive than in the past. By using technology solutions, they can be digitally managed in a streamlined manner to reduce discrepancies and other delays.
Automating trade documentation cuts down on paperwork and speeds up transactions, improving working capital efficiency. Digital platforms connect businesses with alternative lenders, making access to capital easier. AI-driven analytics can even spot potential risks, helping treasurers make smarter, proactive decisions.
By integrating digital trade finance with supply chain management, businesses can improve tracking, inventory management, and payment monitoring – all critical for staying competitive.
Seeing Opportunities not Threats
Thomas Jerolitsch, Vice-President, Enterprise Treasury, FIS, offers corporate treasurers words of encouragement in this quick-fire Q&A.
What responses might companies have to tariffs, beyond simply raising prices or absorbing costs?
Companies need digitisation more than ever to help ensure they can access the necessary data and pivot quickly, and with confidence, where needed. When we consider corporate treasuries, tools that enable financial forecasting, and allow for the efficient management of FX and commodity price volatility based on reliable forecasts, are critical.
Many companies may also look at digitisation as an opportunity to reduce cost of operations, and we expect that companies will more than ever look at strategic partners to help solve enterprise challenges.
What steps should companies take to mitigate the immediate risk of disruption?
To address immediate risks, companies should conduct a thorough review of their supply chains and production networks to identify vulnerabilities. Adjustments could include stockpiling materials, engaging local suppliers, or refining logistics to minimise exposure.
Treasuries should enhance real-time monitoring systems, improve cash flow forecasting capabilities, and ensure data integration across corporate systems for better visibility and decision-making. Collaborative contingency planning with suppliers and partners is essential to maintain continuity.
What should treasuries be doing for longer-term protection?
For long-term resilience, treasuries should focus on building robust liquidity frameworks, revisiting hedging policies, and minimising currency risks through diversification strategies. Having a reliable technology infrastructure for treasuries to assess the impact of operational risk and financial market volatility will be most critical.
What holds treasuries back is that many have built a framework of ‘solution islands’, for example for cash management, hedging, and risk management. These solution islands make it difficult to achieve a good and reliable view of corporate data, which is more critical than ever. There is also the aspect of cost.
Many solution islands are often more expensive to maintain and integrate – if that’s even possible – compared with more powerful enterprise-level solutions. We believe we will see a trend where treasuries will look at more strategic vendors, being able to solve all or most parts of the financial value chain, and deeply integrate with ERP and other corporate data.
Improve, streamline, collaborate
With trade dynamics constantly shifting, treasurers are stepping into a more strategic role. They’re now expected to provide deep financial insights, analysing trade policies, supply chain disruptions, and geopolitical risks to help guide business decisions.
Managing risk is also becoming more complex, requiring treasurers to strengthen their frameworks with currency hedging, supply chain diversification, and insurance solutions. And with working capital cycles under more pressure than ever, improving inventory management, streamlining payments, and using trade finance tools will be key to staying competitive.
Digital transformation is another major focus. Treasurers need to champion digital trade finance solutions that enhance efficiency, reduce friction, and provide greater transparency. It will require close collaboration with procurement, logistics, and sales teams to build resilient trade strategies.
Strong banking relationships will also be crucial, ensuring businesses have the liquidity and financing options they need, especially in uncertain economic times. As the trade landscape keeps evolving, financial agility will be the defining factor for success.
Planning for uncertainty is key
As geopolitical uncertainty, tariffs and trade wars once again rock the global trade landscape, businesses are facing growing risk in their trade and supply chains.
In such an environment, concentration on one market can expose a business to sudden shocks, impacting profitability, and even its survival.
The key will be building stronger, more flexible supply chains, diversifying sourcing, and leveraging technology to both manage risks and capitalise on new opportunities. While tariffs pose challenges, they also push companies to rethink how they operate – those that adapt quickly and strategically will have the upper hand.
By embracing innovation and staying proactive, treasurers can help their organisations navigate global trade complexities and secure long-term success. The only real certainty in today’s trade environment is uncertainty, and those who plan for it will be the ones who thrive.