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The United States is rearming its tariff playbook. In 2025, sweeping changes to trade policy are underway, with new tariffs targeting a range of imports, from electric vehicles and semiconductors to strategic materials like steel and aluminium.
The average tariff rate is set to more than double, climbing from around 10% to 23%. While the headlines are fixated on geopolitical strategy, the impact on business is immediate, tangible, and difficult to ignore.
At the heart of this shift lies a pressing concern for finance leaders: cost planning is about to get much harder.
These tariffs are not just a headline risk but an operational one. They push up input costs, distort supplier economics, and create ripple effects across pricing, inventory, and cash flow.
Inflation is likely to creep in through the back door, pressuring consumer spending and widening the gap between price and value. The stakes are rising sharply for those in charge of financial planning and analysis.
The Problem: How New U.S. Tariffs Pressure Cost Planning
The numbers tell part of the story: a sharp jump in tariffs across multiple sectors means that businesses, particularly those with complex global supply chains, will see significant cost increases baked into their forecasts. These pressures are not evenly distributed, but their cumulative effect is systemic.
Already, the inflationary undertow is being felt. As input prices rise, so too does the pressure to adjust pricing models—yet passing costs onto customers is neither straightforward nor risk-free. Consumer sentiment remains fragile, and competition is intense. Price elasticity isn’t what it used to be.
Beyond pricing, supply chains are again in flux. The call for diversification, nearshoring, and inventory buffering is growing louder, but all these options come with trade-offs: lead times, capital requirements, and operational complexity. Forecasting has become a guessing game laced with geopolitical volatility. Budgeting cycles are strained by new layers of uncertainty.
Behind it all is the often-overlooked tax angle, where global tariffs collide with existing tax structures, throwing up new costs, compliance headaches, and margin hits. The old planning models weren’t built for this.
So, What’s Next?
Tariffs may sit outside the ledger, but their ripple effects land squarely on it. And while finance can’t predict policy, it can shape how the business responds: with foresight, flexibility, and financial clarity.
Model for uncertainty, not stability.
Traditional forecasting won’t cut it. This is the moment for layered, scenario-based planning that accounts for multiple tariff paths, currency impacts, and supply chain permutations. Build models that bend without breaking, anchored in current trade intelligence.
Get forensic with cost visibility.
Knowing what something costs to produce, move, and sell is no longer a supply chain issue; it’s a boardroom imperative. Finance should lead in creating a full picture of total landed cost: tariffs, freight, insurance, compliance, and hidden premiums.
That’s what unlocks the trade-offs: price versus margin, speed versus resilience. Guesswork will break budgets, while precision will protect them.
Recast contracts as levers, not liabilities.
Many supplier and customer contracts were written for a different world. Now’s the time to revise them aggressively if needed. Work with legal and procurement to embed tariff-adjustment clauses, rebase pricing terms, and strengthen renegotiation triggers. Finance must treat contracts as living instruments of commercial flexibility.
Own the narrative.
In times of volatility, finance becomes the translator of cost pressure, pricing shifts, and strategic pivots. This is not just about crunching numbers but framing the “why” behind decisions.
Internally, that means guiding leadership with clarity. Externally, it could mean informing customers or investors with transparency. The voice of finance needs to be steady, informed, and persuasive.
What Finance Teams Should Do Now?
For finance leaders, the challenge is building the muscle to respond to it. This means pressure-testing assumptions and preparing for a range of outcomes, not just the most likely one.
Start by proactively developing worst, best, and base-case scenarios, focusing on different market conditions’ cost and revenue implications.
Pair this with ongoing conversations with suppliers, logistics partners, and internal stakeholders to stay ahead of tariff changes, supply chain friction, and policy shifts.
Next, look inward. Many cost-planning processes still rely on static models that can’t flex with new data. It’s time to shift toward technologies that enable real-time forecasting, continuous re-planning, and rapid course correction. Finance teams need tools that not only improve accuracy but also deliver the agility to adapt at speed.
The Value of Adaptive Planning Tools
This is where modern platforms like Workday Adaptive Planning come in. They’re not just digital spreadsheets, they’re engines for resilience.
These tools allow finance teams to build and test multiple scenarios quickly, adjusting variables like tariffs, freight rates, or supply disruptions and instantly seeing the downstream impact.
More importantly, they support collaborative planning. Bringing operations, HR, and procurement into the process so that finance isn’t solved in isolation.
With real-time data integration, teams gain clear visibility into shifting supply chain costs and can respond strategically rather than reactively. What was once guesswork becomes a structured, dynamic capability.
Planning Amid Uncertainty
The reality is this: Cost planning has never been more complex. Global tariffs, supply risks, and shifting regulations make it harder to rely on historical data alone. To stay ahead, finance teams must embrace proactive, scenario-based planning and they need tools built for that purpose.
Join us in “Let’s Talk FP&A” to get insights from our experts on how a platform like Workday Adaptive Planning enables not only rapid re-forecasting but also the cross-functional collaboration and visibility needed to navigate the unknown.
