Navigating Tariff Uncertainty: What Finance Teams Are Doing
In 2025, tariffs are back in the news and have been consistently for the first half of the year. This brings new uncertainty for companies working in global supply chains. For businesses that import raw materials or finished goods, tariff changes can have large financial effects. Proposed changes to policy, unclear timing, and ongoing political tensions have left many leaders asking the same questions:
What will change? When? And how do we prepare when the rules remain unclear?
In these moments, the right response is neither alarm nor passivity. Uncertainty—particularly at the policy level—requires proactive leadership. That means building operational flexibility, tightening financial discipline, and using scenario planning to assess and adapt to potential changes before they manifest.
At our fractional CFO and accounting firm, we help clients in many industries prepare for this kind of change. Here's how finance teams can strategically approach tariff uncertainty in 2025—and strengthen their business resilience along the way.
1. Scenario Planning Is No Longer Optional
One of the most important things a business can do right now is prepare for a range of possible outcomes. Even if the details of tariff policy are not clear, finance leaders can create models. They can use different cost and margin scenarios based on reasonable assumptions.
Start by asking a few key questions:
What is the financial impact of a 10% increase in tariffs?
Can our current margins absorb that increase?
Would we need to revisit pricing, sourcing strategies, or vendor terms to stay competitive?
How would this affect our contribution margin by product line or category?
Are we overly reliant on specific geographies or suppliers that may become more expensive under new rules?
Scenario planning is not about predicting the future, but rather responding quickly and thoughtfully, instead of reacting.
The finance team can take the lead by preparing models. These models show how cost increases affect not only the profit and loss statement, but cash flow as well. Finally, they identify ways to reduce that pressure.
2. Identify and Quantify Exposure
In an environment where policy can shift rapidly, visibility is everything. Finance teams should work closely with procurement, operations, and supply chain leaders. They need to identify where the business is most at risk.
This should go deeper than country-level sourcing and include:
Which SKUs are most affected by tariff-sensitive inputs?
What is the dollar value of imports impacted under different tariff tiers?
How concentrated is our supplier base in affected regions?
What lead times and inventory risks exist if we need to pivot sourcing?
This kind of cross-functional collaboration is critical. A finance team may understand the overall cost of goods sold.
However, they need to work with sourcing and supply chain teams. This partnership breaks down the costs so that we can make real decisions. Once we quantify exposure, leadership can prioritize mitigation efforts by weighing financial impact against operational complexity.
3. Update Landed Cost Assumptions Frequently
Many companies still use old cost assumptions. This is especially true for international shipping fees, customs charges, and tariffs. In a changing trade environment, these figures can shift quickly. Relying on historical averages can lead to inaccurate margin forecasting and flawed pricing decisions.
We advise clients to build in mechanisms for regularly updating landed cost data, especially for:
High-volume SKUs
Products sourced from regions impacted by tariff policy
Categories that are already experiencing inflation pressure
This is not just an exercise in cost accuracy—it’s about maintaining financial agility. When the true cost of goods sold is reflected in your models and pricing decisions, you’re in a better position to make timely, informed adjustments.
If your ERP or accounting systems don’t support dynamic cost tracking, consider interim solutions—such as periodic landed cost audits or integrations with sourcing platforms that can feed current rates into your models. The goal is to have visibility into unit-level costs that reflect today’s reality—not last year’s estimates.
4. Tighten Cash Flow Oversight
Periods of policy-driven uncertainty should always trigger closer cash flow management. Increased tariffs can create sudden margin compression or unexpected working capital needs. Finance teams should assess:
Which cash flows are fixed or committed, and which are flexible?
How will increased COGS affect payment cycles, inventory purchases, or debt service?
Do we have adequate reserves or buffers in place if tariffs lead to temporary disruptions or cost spikes?
In some cases, revisiting short-term working capital strategies—such as renegotiating payment terms, delaying non-essential capital expenditures, or adjusting inventory targets—can provide the breathing room needed to respond without cutting into core operations.
Additionally, businesses with international exposure should evaluate foreign exchange risk in parallel. If you’re sourcing in one currency and selling in another, the combined impact of tariffs and currency fluctuations can be significant.
5. Strengthen Communication Across Stakeholders
Uncertainty around tariffs doesn’t just affect finance and operations—it impacts teams across the organization. That’s why clear, early, and consistent communication is critical.
Internally, finance leaders should:
Keep department heads updated on potential cost and margin changes
Share scenario outcomes in planning meetings
Engage sourcing and logistics teams in joint decision-making
Externally, businesses should be proactive in their communication with key vendors and supply chain partners. In some cases, suppliers may be able to provide cost forecasts or share strategies for minimizing tariff exposure. In others, open dialogue can create room for renegotiating terms, timelines, or shared cost burdens.
Being transparent with partners—even when the path forward isn’t certain—can strengthen relationships and reduce the likelihood of misalignment or surprise downstream.
6. Revisit Pricing and Margin Strategy
In some industries, particularly in B2B or CPG, businesses may have the ability to pass through some portion of tariff-related cost increases to customers. However, doing so requires careful planning, thoughtful communication, and a clear understanding of how price sensitivity varies by customer segment or product line.
Finance teams can support pricing strategy by:
Identifying products or customers where margin erosion is most acute
Modelling different price increase scenarios and their impact on volume
Coordinating with marketing and sales to align on messaging and timing
Even small adjustments—such as modifying pack sizes, repositioning bundles, or shifting promotions—can help preserve margins without triggering customer resistance. The key is to act before erosion occurs, not after the damage is visible on the income statement.
7. Build Optionality Into Supply Chains
While not every organization can relocate production or sourcing on short notice, now is the time to assess supply chain flexibility. Having a diversified supplier base—even if not immediately used—can serve as a critical risk management tool.
Finance leaders should partner with operations to:
Evaluate dual-sourcing options in low-risk regions
Assess the cost implications of nearshoring or regionalizing production
Consider the working capital impact of holding more inventory as a hedge
The companies that manage trade policy shifts most effectively are often those that invested in optionality before it became a necessity.
Clarity in Uncertain Times
Tariff uncertainty isn’t new—but in today’s environment, the stakes for financial planning have never been higher. Businesses that wait for certainty may find themselves reacting under pressure. Those that plan for multiple outcomes, stay close to their numbers, and foster cross-functional collaboration will be far better positioned to protect margins and navigate change confidently.
You don’t need perfect information to make sound decisions. What you need is a disciplined financial process, a flexible operating model, and a leadership team willing to plan through ambiguity.
If your business is facing tariff-related uncertainty, our fractional CFO and accounting team is here to help. From scenario modeling and cash flow forecasting to real-time cost tracking and pricing strategy, we provide the tools and insights needed to make proactive, data-driven decisions—so you can lead with clarity in uncertain times.
