The fact that we’re talking about tariffs should come as no surprise. No matter which news channel you’re tuning into, which social accounts you follow, or which conversations you’re catching snippets of around the office, tariffs and trade wars are the overwhelming topic of discussion around the world right now.
“I talk to business leaders from small businesses, medium businesses, and global businesses.” says Federal Reserve Bank of New York President John C. Williams, “Uncertainty, and especially uncertainty around tariffs and trade policy, is the No. 1 topic.”
The headlines have been relentless, with tariff rates that are changing literally day by day, talk of so-called ‘non-monetary tariffs’ through regulatory means, and renewed scrutiny on global supply chains. For CFOs and treasurers, it’s not the politics that matter, it’s the impact on their organization.
The good news is that everyone in your industry is facing this same challenge. So, if you can find a way to manage the volatility better than your peers, you’ll give your company the opportunity to open up a competitive advantage.
To create this advantage you don’t need the ability to predict the future, but to be able to prepare for multiple futures at once.
Trade Uncertainty Isn’t New, But the Scale Is
Tariff pressure has ebbed and flowed over the past decade, but 2025 brings a uniquely potent mix of risk factors. China remains central to the supply chains of thousands of US businesses, and even the hint of additional tariffs triggers real decisions on procurement, logistics, and pricing strategy.
What’s changed is the frequency and velocity of these shifts. The threat of sweeping new tariffs on short notice means finance leaders don’t have the luxury of slow analysis. If you’re building your response when the news drops, you’re already too late.
But some companies will be ready. The ones who build resilience not by trying to guess what will happen, but by creating the infrastructure to move quickly when it does. Having even a rough concept of what a new supply relationship might look like can give you a head start over competitors.
What Happens When You Can’t Forecast for Different Scenarios
We all know the saying, “cash is king,” and while having a reliable cash buffer is essential to any business operation, you can’t protect against any and all uncertainty by just increasing your cash reserves. At a certain point, the opportunity cost becomes simply too high.
But without accurate, agile forecasting tools, businesses risk being caught short on working capital, unable to fund quick pivots in production, distribution, or pricing. We saw it in 2008, when once-profitable businesses with sluggish cash reporting processes couldn’t react fast enough to the liquidity crisis.
In contrast, companies which entered the financial crisis with clean balance sheets and disciplined cash management (such as Apple) kept investing, innovating, and growing. The same story played out during the Covid crash, where companies with visibility and flexibility (like Amazon) not only weathered the storm but emerged with greater market share.
Today’s tariff volatility demands that same level of preparedness. You may not be able to control the external environment, but you can control your internal response.
Turn Tariff Guesswork Into Strategy With Scenario Planning
The key to controlling your internal response to tariffs? Scenario planning. It’s as close to a crystal ball as you’re ever going to get, and building multiple forecast models for different trade environments allows finance teams to:
- Model the impact of 10%, 25%, or 245% (!) tariff increases across supplier contracts and cost of goods sold
- Assess margin compression risks and determine how much pricing flexibility exists
- Understand liquidity needs if inventory has to be rebalanced, re-routed, or re-sourced
- Quantify risks to customer demand if input costs drive price increases
The idea isn’t to predict which of these outcomes will happen. It’s to be ready whichever one does.
The most effective teams build templates for tariff impact forecasting, then tweak and deploy as the policy picture evolves. When CFOs walk into boardrooms or investor meetings, they’re not reacting, they’re already executing.
Recommended: Scenario Planning in Finance: A Key to Business Resilience
Outcomes, Then Action
Forecasting doesn’t just stop at seeing the impact of tariff changes to your bottom line. The key with this scenario planning approach is that it allows business leaders to create plans based on multiple potential outcomes.
For example, consider an industrial manufacturer based in the US which imports many parts from China for their machinery. Forecasting various tariff rates for specific segments will provide them with a detailed look at how their profits will be impacted from the new tariffs.
From there, leaders can begin to assess their options. Importing from Latin America instead of China might increase COGS, but is that more than offset by a lower tariff rate? What about if products were finished in a European facility and then shipped directly to customers from there?
The end result is that you can have the fundamental strategy mapped out before a change has even come into effect. That’s a head start that could create real enterprise value.
Forecasting Through the Tariff-Driven Chaos
However, forecasting with that level of detail and agility requires moving beyond static spreadsheets and slow reporting cycles.
Effective forecasting in this environment depends on three core capabilities:
1. Real-time Cash Visibility
The starting point in any accurate forecasting is an accurate, up-to-date baseline view of your cash position. You need to know what liquidity you have, where it is, and how quickly it can be deployed. Waiting for month-end closes or manually logging into bank portals isn’t sustainable when you need to model contingency plans in hours, not weeks.
It’s simply not possible to do that if you’re pulling cash and transaction data manually from individual banking portals.
2. Multi-Entity Forecasting
Tariffs don’t hit all operations equally. The ability to segment forecasts by region, entity, or product line helps finance leaders assess which areas of the business are most vulnerable, and where they have room to maneuver.
This can also help in understanding how and where you might be able to shift cash, operations and logistics to minimize the impact of tariffs.
3. Integrated Reporting & Scenario Modeling
Forecasting can’t exist in a silo. Integrated workflows that link your forecast to actuals, tagging structures, and transaction-level data allow teams to iterate quickly, course-correct, and communicate clearly with stakeholders.
By linking reporting to forecasting, you can quickly and easily adjust your forecasts when new data comes in, and update scenarios on the fly.
Where the Real Advantage Lies
Let’s not pretend that smart forecasting eliminates risk. It doesn’t. But it does turn risk into something you can quantify, plan for, and manage.
And that’s the real opportunity here.
For all the talk of uncertainty, what the market truly rewards is confidence. Shareholders want to know that your team isn’t frozen by volatility.
They want to see plans in place, metrics being tracked, and trade-offs being understood. And while you can’t change the level of confidence being shown in the broader economy or financial system, with the right systems and processes, you can be confident in your organization’s ability to thrive through the volatility.
Trovata Helps Build Business Resilience Through Cash Consciousness
Trovata has been built to simplify complexity and provide clarity amidst confusion. Pretty apt for what we’re all experiencing right now.
When your job is to model multiple futures, you need real-time data, fast reporting, and flexible forecasting. Trovata consolidates banking data from across your organization into a single, structured source of truth. It gives you the ability to tag transactions, segment forecasts, and test scenarios across multiple entities or business lines, all in real time.
CFOs and treasury teams use Trovata not just to survive volatility, but to build confidence in the midst of it for their boards, for investors, and for themselves.
Want to see Trovata forecasting in action? Join this upcoming webinar or book a 1:1 demo!
