Tariffs, trade and transformation: What every CFO needs to know
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Transfer pricing and tax strategy under pressure
Many multinationals are navigating complex intercompany transactions that span tariff-affected jurisdictions. Changes in import duties often require updates to transfer pricing policies, customs valuations and related-party agreements to ensure tax compliance and avoid double taxation.
For CFOs, this is a critical area where tax, legal and finance need to be aligned. Conducting proactive diagnostics of transfer pricing frameworks, especially in industries where margins are thin and transaction volumes are high, is paramount to ensuring strategies are sound and operational.
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Risk management and compliance in a volatile trade environment
Tariffs rarely arrive in isolation—they’re part of a broader macroeconomic and political landscape. CFOs must ensure their organizations prepare for continued volatility by enhancing hedging strategies, embedding tariff assumptions into budgeting and developing contingency plans for sudden changes in trade policy.
Leading finance organizations are now embedding tariff risk directly into their enterprise risk management (ERM) frameworks and using real-time analytics to monitor exposure.
With increased scrutiny from customs and tax authorities, companies must bolster compliance and internal controls related to trade flows, product classification and valuation. Finance teams need to collaborate more closely with legal and logistics functions to ensure accurate customs reporting and explore options such as Foreign Trade Zones, bonded warehouses or duty drawback programs.
Tariff-driven process changes may also trigger updates to Sarbanes-Oxley (SOX)-compliant controls—especially for inventory, procurement and revenue recognition.
“Rising tariffs can affect an organization’s risk profile in various ways,” says Anne Slattery, RSM US partner and national energy consulting leader. “Typically, companies prioritize addressing the processes most immediately impacted. Key areas for analysis and adjustment include contracting, sourcing strategy, pricing models and inventory management.
“As these processes are revamped, it is crucial to understand and accommodate the related internal controls,” she continues. “Considerations include proper approval of suppliers, analysis of how pricing changes will affect the forecast, implications related to changes in contract terms, especially around revenue recognition, and more. As organizations respond to policy changes, maintaining a focus on risk management is essential to navigate increased costs and operational challenges.”
For finance leaders navigating this landscape, one truth stands out: Tariffs are not just a cost issue—but a catalyst for transformation. And the ripple effects touch every part of the finance operating model.
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