Embrace FP&A technology to forecast and adapt to U.S. tariff changes
The recent imposition of new U.S. tariffs will significantly impact finance teams in the coming year, disrupting planning cycles, increasing supply chain uncertainty, and creating significant pricing and forecasting challenges.
In this blog, we explore why the latest U.S. tariffs are a pressing concern, their impact on financial forecasting, and how FP&A (Financial Planning & Analysis) software like Unit4’s can provide businesses with the necessary tools to manage and mitigate these challenges – namely, accurate forecasting and dashboarding.
For the Office of the CFO, the implications are far-reaching, requiring them to forecast the effects of changing tariffs on organizational finances and develop agile strategies to cope. Keep reading to learn how these tariffs will affect you, and how you can adapt with Unit4 FP&A.
How U.S. tariffs changed?
- In early February 2025, President Donald Trump announced a 25% tariff on all steel and aluminum imports, effective March 12, 2025, removing previous exemptions.
- Imports of steel from Turkey remained subject to a 50% tariff.
- A 10% tariff was applied to all goods from China and Hong Kong, effective February 4, 2025.
- Additionally, tariffs of 25% were applied to imports from Mexico and Canada.
- Energy resources (oil, natural gas, and electricity) from Canada were subject to a 10% tariff.
- On April 2, 2025, President Donald Trump announced a universal "baseline" 10% tariff on trade imports into the U.S. Some countries now face tariffs as high as 49%.
- These ‘reciprocal’ tariffs include a 10% tariff on UK imports, 20% on EU goods, and 34% on China, marking a seismic moment for global economic trade.
- Speculation remains around the response to this, with potential tariffs being imposed on American service providers by the EU as one option.
In early March, a pause was placed on some tariffs from Mexico and some from Canada – marking the second delay in this ongoing process, with the clock ticking on these and higher charges from April 2. With negotiations and responses now set to begin, this highlights the need for organizations to quickly pivot and respond to ongoing uncertainty.
Organizations that rely on imports — such as technology firms, automotive manufacturers, and retail companies — are particularly vulnerable to these disruptions, with a wider indirect impact on global financial markets, underscoring the need for smart forecasting and impact analysis tools.
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Implications of U.S. Tariffs on the Office of the CFO
- Increased Costs and Margin Pressure - The tariffs will likely elevate the cost of imported goods, affecting raw materials and finished products. Finance teams must reassess cost structures and explore strategies to mitigate margin compression, such as renegotiating supplier contracts or adjusting pricing models.
- Supply Chain Disruptions - Tariffs may prompt organizations to alter their supply chains activity, seeking alternative suppliers to minimize tariff exposure. This necessitates financial analysis of potential scenarios, including greater collaboration with procurement teams, which may be strained by legacy systems and data siloes.
- Cash Flow Management Challenges - The increased costs and potential delays associated with tariffs can strain cash flows. Finance teams should implement robust cash flow forecasting and consider financing options to maintain liquidity during this period of adjustment.
- Complex Regulatory Compliance - Navigating the new tariff landscape requires a thorough understanding of updated trade regulations. Finance departments must ensure accurate tariff classifications and maintain compliance to avoid penalties, potentially necessitating collaboration with legal and trade compliance experts.
- Strategic Financial Planning - The uncertainty surrounding trade policies underscores the need for dynamic financial planning. Utilizing scenario modeling and predictive analytics can aid in anticipating various outcomes and formulating responsive strategies.
In summary, the implementation of new U.S. tariffs presents multifaceted challenges for finance teams, affecting cost management, supply chain configuration, cash flow, regulatory compliance, and strategic planning. Proactive measures and cross-functional collaboration will be essential in navigating this complex economic environment.
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Considerations for Importers, Exporters, and CFOs
- For Importers - Importers face the challenge of maintaining profitability despite rising costs. FP&A solutions provide insights into accurate pricing strategies, enabling you to adjust prices for specific markets without alienating your customer base. Predictive analytics can also help identify cost-saving procurement opportunities.
- For Exporters - Tariff fluctuations may necessitate shifting focus to new markets. FP&A software enables exporters to evaluate the viability of target regions and simulate outcomes for pricing and logistics, offering a strategic advantage.
- For CFOs - FP&A software ensures data-driven decision-making by using a single source of truth and eliminating spreadsheets. This clarity ensures resilience against tariff volatility, making CFOs well-equipped for strategic risk management.
How FP&A software can help you forecast the effects of U.S. tariff changes
Recent surveys show that 80% of finance leaders recognize the importance of digital transformation for effective financial planning. With FP&A tools rated as essential for navigating uncertainty, the adoption rate continues to grow rapidly among forward-thinking organizations.
FP&A software has become an indispensable tool for companies navigating the complexities of tariffs. Cloud FP&A software will enable more agile financial planning, providing decision-makers with accurate, actionable insights to navigate these coming changes to U.S. tariffs.
Financial Planning and Analysis (FP&A) software enables organizations to simulate a variety of trade outcomes, such as potential increases or reductions in tariffs. By running these scenarios, organizations can better understand the financial implications of policy changes and take proactive measures to prepare for different outcomes.
FP&A software also offers detailed cost breakdowns, allowing businesses to analyze their cost structures. With this insight, you can identify opportunities to optimize procurement and budgeting processes to mitigate the impact of tariffs on your bottom line.
FP&A platforms promote cross-department collaboration by providing integrated data that streamline communication and ensure alignment across teams. This makes it easy to disseminate dashboards and reports concerning the effects of these U.S. tariffs to all corners of the organization.
How can Unit4 help you forecast the effects of coming U.S. tariffs?
Unit4’s Cloud FP&A software ensures organizations have access to accurate data, providing 24/7 visibility of the effect of trade policies and tariffs. By working with the most current information, decision-makers can respond quickly and confidently to new developments, reducing the risk of being caught off guard by sudden changes.
Choose Unit4 FP&A and gain planning capabilities such as:
- Bottom-up and top-down planning.
- Integrating operational budgets (e.g., HR, cost center, investment planning, intercompany relationships, allocations).
- Financial scenario planning based on sales, costs, financial data, and KPIs.
- Modern methods such as rolling forecasts, value-driver-based planning, and frontloading.
- AI forecasting and automatic data-entry checks.
- Risk management and the potential upside or downside to your organization.
With the right technology supporting you, your organization can manage revenues and expenses accurately, with the ability to forecast. Unit4’s Cloud-based FP&A solution integrates with other business functions to give you a single source of data truth - to learn more, talk to sales today.
