Tariff Turmoil Puts Supplier Risk, Supply Chain Management Under Microscope

As global, and domestic, trade undergoes seismic shifts driven by Donald Trump’s new tariffs, chief financial officers (CFOs) are being tasked with far more than managing financial performance. They must take a proactive, strategic approach to risk management to ensure long-term resilience and competitiveness.

Despite having navigated significant disruptions in recent years, including the COVID-19 pandemic, CFOs are faced now with a new challenge and must navigate a landscape filled with economic volatility, geopolitical tensions, and increased fraud risks that threaten to undermine corporate stability.

While Trump’s administration agreed to delay tariffs on Mexico and Canada, the 10% levies on China went live Tuesday (Feb. 4), with China striking back in turn with taxes on certain American goods as well as a new antitrust probe into Google. The Chinese tariffs will go into effect Feb. 10.

With these new tariffs poised to impact international trade, companies are reassessing supply chain strategies to minimize disruptions and optimize costs.

“Many companies are reshoring manufacturing, expanding U.S. manufacturing capabilities, and searching for reshoring and friendshoring opportunities with countries less likely to experience tariffs. At a minimum, proactive companies are moving a portion of their supply chains to address these risks,” Lisa Anderson, founder and president of LMA Consulting Group, told PYMNTS in an interview.

Fraud Risks Escalate Amid Supply Chain Shifts

The market reaction to the burgeoning trade wars between America, China, Mexico and Canada has been relatively benign — with certain observers holding that Trump’s bluster is more negotiating tactic than bite.

Still, many businesses are shifting from a “just-in-time” to a “just-in-case” model, emphasizing supplier diversification to hedge against geopolitical risks and economic uncertainty. This shift, however, requires real-time, data-driven risk intelligence to ensure its effectiveness.

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