In the wake of the "Liberation Day" tariff measures and ongoing global trade tensions, Chief Financial Officers (CFOs) face unprecedented challenges in preserving shareholder value and maintaining financial resilience.
The New Tariff Landscape
The current administration's tariff policies represent a fundamental shift in the United States' trade approach. The imposition of tariffs on imports, designed to reduce U.S. trade deficits and reinforce domestic manufacturing, has brought immediate financial pressures across industries, unleashed volatility in financial markets, disrupted global supply chains, and opens the doors to counter-tariffs.
The levies represent the largest increase in tariffs in the past 100 years and neither U.S. consumers nor foreign suppliers can fully absorb the cost shock. Supply chains cannot retool fast enough, and customs backlogs, pricing instability, and revenue compression are now everyday realities.
Moreover, the number of variables are constantly in flux - with trade policies changing, tariffs and counter-tariffs shifting, and markets in turbulence, it is nearly impossible to plan or forecast efficiently.
The CFO as Strategic Coordinator
This volatile environment requires CFOs to assume the role of strategic coordinator and operational leader. With visibility across the enterprise, the CFO is uniquely positioned to drive cross-functional collaboration, transform potential threats into opportunities, and lead with clarity amid confusion.
Key responsibilities include:
- Enterprise-wide coordination: Aligning supply chain, procurement, legal, tax, manufacturing, and sales functions around a cohesive strategy.
- Investor and lender communications: Clearly articulating tariff impact and mitigation plans.
- Operational leadership: Orchestrating the implementation of mitigation initiatives, not just evaluating them by missing critical nuances in tariff assessment and application. Balancing patience with swift decision making; in this unpredictable environment it is important not to have knee-jerk reactions, but also not be paralyzed by indecision.
- Guiding the CEO: As well as the Board on both short-term impacts and long-term positioning.
Some companies have already established tariff-focused "war rooms" to drive rapid analysis and action, conducting SKU-by-SKU evaluations, scenario modeling, and supplier outreach. Those that respond with agility will be best positioned to preserve margin and market share.
How Big is Your Tariff? Identifying Hidden Costs and Opportunities
Many companies underestimate their true tariff exposure by focusing solely on the headline rates while missing the critical nuances in tariff assessment and application. Understanding the total cost details, while difficult, can be the difference between devastating margin erosion and minimal impact.
Identifying and addressing these technical aspects of tariff management can yield significant savings and help to recover some of the initial tariff impact. In addition, watch for potentially margin-threatening non-tariff ripple effects such as consumer behavior shifts, foreign retaliation, currency volatility, and sudden policy reversals.
Our Framework | Mitigate Tariff Impacts While Building Long-Term Resilience
Ankura has developed a comprehensive framework for CFOs to mitigate tariff impacts while building long-term resilience.
FINANCIAL RESILIENCE AND RISK MITIGATION
Financial Stress Testing
- Conduct comprehensive tariff impact assessments across product lines, supplier geographies, and customer segments
- Develop multiple scenario "heat maps" from baseline to worst-case tariff escalation including both tier 1 and tier 2 sources
- Assess price elasticity and margin compression risks
- Analyze currency and commodity fluctuations and their impact on cross-border transactions
- Model price elasticity to determine impacts of passing additional costs to customers
- Evaluate impact of changes to cash flows and timing to liquidity and ability to maintain obligations such as ABL collateral requirements
- Deploy AI-driven financial intelligence solutions to gain real-time insights
- Collaborate and communicate with the business to understand the true impact of the changes will have the data and analysis to enable agile response
Dynamic Hedging
- Implement hedging frameworks integrating financial instruments to maintain cost stability
- Align hedging with trade flow changes to minimize downside risks
- Develop real-time risk dashboards to monitor key announcements and fluctuations
- Proactively manage counterparty risk across the value chain
Capital Structure and Working Capital Optimization
- Enhance inventory management strategies to optimize the cash conversion cycle
- Reassess cost structures to maintain service levels or adjust pricing
- Conduct a detailed analysis of the company's capital structure to assess tariff impacts
- Introduce a strategic capital budgeting framework prioritizing high-return, risk-adjusted investments
- Monitor and optimize free cash flow generation to fund strategic investments and cushion profit impacts
Transfer Pricing Alignment
- Recalibrate transfer pricing mechanics to align with evolving tariff structures
- Review and modify intercompany pricing models to reflect cost dynamics changes
- Integrate transfer pricing adjustments with broader supply chain realignments
- Manage intellectual property asset allocation to align with functional contributions
- Proactively engage with tax authorities and align with OECD guidelines
SUPPLY CHAIN ADAPTATION
Tariff Engineering
- Implement product-level optimizations by reviewing the overall product portfolio
- Conduct HS code classification audits and implement automation tools for validation
- Leverage operations within free trade zones where applicable
- Effectively manage country of origin to optimize tariff exposure
- Employ strategic surcharge implementation to distribute tariff-related costs
Diversification and Nearshoring/Onshoring Analysis
- Undertake comprehensive financial feasibility studies for production shifts
- Integrate cost-benefit analysis with scenario planning to determine optimal sourcing mix
- Collaborate with supply chain leaders to systematically review supplier contracts
- Evaluate nearshoring and onshoring as viable alternatives
- Conduct structured analysis to weigh cost arbitrage against logistical efficiencies
Inventory and Logistics Optimization
- Renegotiate strategic supplier agreements to obtain adaptive contract terms
- Leverage AI for enhanced demand forecasting and inventory planning
- Conduct multi-scenario planning for different tariff impacts
- Assess long lead time product components sourced from multiple companies being positioned to one company for assembly
- Deploy inventory holding strategies and just-in-time approaches
- Reassess regional distribution centers and transportation
modes
COLLABORATIVE TRADE POLICY ENGAGEMENT
Stakeholder Engagement and Policy Advocacy
- Establish robust communication networks with policymakers and regulatory bodies
- Align with corporate affairs and government relations teams to push for tariff exemptions
- Expand trade advocacy efforts across business units
- Engage key suppliers to assist with tariff minimization initiatives
- Integrate trade policy monitoring into financial planning processes
- Lead transparent financial discussions with partners and educate customers
Contingency Planning
- Develop contingency supplier agreements to ensure uninterrupted production
- Allocate designated financial reserves to absorb tariff-induced fluctuations
- Consider insurance as a trade contingency tool
- Explore alternate dispute resolution mechanisms
- Evaluate on-going inventory and safety stock requirements in light of potential supply chain or tariff related disruption
- Position trade finance as a contingency measure for unexpected rising tariffs
CFO Action Plan: A Comprehensive Checklist
The new tariff reality demands CFOs step into a more dynamic,
cross-functional role. By combining operational agility, financial
rigor, and policy foresight, CFOs can lead their organizations
through today's turbulence and emerge stronger. Building
resilience now will not only reduce the current cost burden but
create lasting strategic advantages in an increasingly
protectionist world.
How Ankura Can Help
Ankura brings an integrated, cross-functional approach to helping companies navigate today's complex tariff environment. Our team combines deep expertise in trade policy, supply chain operations, and financial strategy to deliver comprehensive solutions that address both immediate cost pressures and long-term strategic imperatives. An international presence enables effective delivery both globally - and locally.
Our approach leverages the complementary capabilities of our integrated practice areas: McLarty Associates provides unparalleled trade policy intelligence and advocacy; our Performance Improvement team delivers supply chain and operational expertise; and Ankura Office of the CFO® practice brings financial and strategic insights—all working together as one seamless team focused on your success.
What distinguishes our approach is our emphasis on implementation support. Unlike traditional consulting approaches that emphasize analysis over action, our methodology focuses on delivering tangible, measurable value from day one. We begin with a Rapid Tariff Vulnerability Assessment (RTVA), typically completed within 2-3 weeks, that delivers not just insights but immediate action steps. We then work collaboratively with client teams to develop and implement an actionable roadmap prioritized based on impact, feasibility, and time-to-value.
The tariff situation will continue to evolve, requiring organizations to build capabilities that extend beyond the immediate crisis. Ankura's approach is designed not just to address today's challenges but to position clients for long-term success in a world where trade uncertainty has become the norm rather than the exception.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
