The threat and risks from tariffs, counter tariffs, and increased trade restrictions is a live issue for many businesses globally and across sectors. It is hard for any business to escape the impact of tariffs either in the short or long term, whether directly or indirectly.
Finance teams do not have control over tariffs and trade policy, but they can ensure their business is well placed to navigate the ongoing uncertainty. Exactly what actions they can take and when to take them will depend on the business and its exposure to tariffs.
However, all finance professionals can use the following steps to make sure their business is prepared for the risks tariffs and trade changes bring.
1. Understand tariffs’ impact
Before you can plan a response to support your business, it’s key to understand what tariffs mean for the organisation. This includes understanding the impact both operationally and financially, as well as in terms of customers, suppliers, employees, and other stakeholders.
There are multiple tools finance teams can use to understand tariffs — and some can and should be used together:
Horizon scanning: By continuously monitoring global trade policies, economic trends, and geopolitical developments, horizon scanning helps finance teams and business leaders identify emerging risks related to tariffs. This proactive approach allows finance teams to help their organisations anticipate changes and prepare accordingly.
Scenario planning: By using scenario planning, finance teams can help increase preparedness and flexibility in responding to future tariffs and their potential impacts on the company’s financial health. Finance teams should prepare worst-case (maximum impact), best-case (minimum impact), and medium scenarios. When developing the scenarios and likely impacts, make sure you consider your suppliers and customers.
Stress-testing: This process involves simulating various extreme but plausible scenarios to assess the resilience of the company’s financial position and operations. This process can help finance identify vulnerabilities and quantify the impact tariffs may have on company operations, the business model, strategy, and finances.
Stress-testing can also help determine the actions that a company needs to take. How much in cost increases can the company withstand? How willing and/or able will it be to increase prices?
Forecasting: Forecasting allows finance teams to use the data they have now to predict how different tariff scenarios might affect the company’s financial performance. By modelling various tariff rates and their potential impacts on costs, revenues, and profit margins, teams can prepare for a range of outcomes. Forecasting can also improve decision-making around resource allocation and company strategy.
In research for our forthcoming Business Resilience Toolkit, we heard how finance is using these tools in combination to plan and prepare for tariffs. These are tips from those we spoke to:
- Learn from previous crises. Many said that going through previous crises, such as the recent high inflationary environment and the COVID-19 pandemic, has provided experience in dealing with challenges and continuing uncertainty. It is helpful to have crisis responses already in place to use or adapt when new challenges arise.
- Use historical data. Historical data can be used in forecasting and scenario planning. It can provide a historical basis from which to develop scenarios. By analysing this data, teams can gain insights into how certain variables, such as sales, costs, and market conditions, have behaved in the past. This helps in understanding potential future behaviours and making more accurate predictions.
By analysing past data, finance teams can develop statistical models and algorithms that forecast future outcomes with greater precision. This helps in anticipating market trends, customer demand, and financial performance. Before using historical data, however, finance will want to ensure the data remains relevant in the context of the changing circumstances around tariffs. - Use internal and external expertise. Make sure you use expertise both within and outside your business when horizon scanning, scenario planning, and forecasting. You can, for example, speak to operational leaders within your organisation who may deal regularly with customers and/or suppliers and can understand their responses to certain scenarios. We have heard how businesses can use their networks, such as speaking to investment banks, to help build scenarios and gather data for forecasts.
2. Partner with the business
Business partnering can play a significant role in helping organisations deal with tariff risk and uncertainty by fostering collaboration, enhancing strategic decision-making, and ensuring a comprehensive approach to risk management.
To support strategic decision-making, finance teams can provide valuable insights and data-driven analysis by partnering with different business units. This includes evaluating the financial implications of various tariff scenarios, identifying cost-saving opportunities, and exploring alternative sourcing strategies.
Through business partnering, finance teams can support supply chain management by assessing the risks related to tariffs and helping to develop strategies to build more resilient supply chains. This includes diversifying suppliers, renegotiating contracts, and exploring nearshoring options to reduce dependency on high-risk regions.
3. Communicate
Finance professionals need to ensure that all relevant departments are aware of the potential impacts of tariffs and are prepared to take necessary actions. This includes sharing insights from scenario planning and stress-testing to help other departments develop mitigation strategies.
Finance teams also play a role in communicating with external stakeholders, such as investors, suppliers, and customers. Finance needs to provide clear and transparent information about how tariffs might affect the business and what steps are being taken to mitigate these impacts. This helps build trust and confidence among external stakeholders.
Communication with customers and clients who may be impacted by tariffs can support the business by helping ensure customer and client demand is not reduced and that they don’t fall behind with payments. This involves finance either communicating directly or supporting operational teams by providing the data and insights they need to have these conversations.
— Ross Archer is director–Public Policy at the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.
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Navigating Tariffs — Key Resources for Accounting and Finance Professionals
Articles
“How Finance Leaders Are Countering Tariff Volatility”, FM magazine, 4 June 2025
“7 Actions for Finance in Response to Trade Shocks”, FM magazine, 1 May 2025
Blog post
“Five Actions Finance Teams Can Take on Tariffs”, AICPA & CIMA, 11 April 2025