Navigating Tariff Complexity: A Strategic Lens for Business Resilience

In today's complex global trade environment, tariffs significantly impact business operations across multiple functions. To mitigate risks and capitalize on opportunities, companies must adopt a proactive, integrated approach to managing tariff complexities.

• Cash flow and liquidity: Increased costs of imported goods strain liquidity, necessitating tighter financial controls and working capital enhancement strategies.
• Inventory management: Tariffs inflate inventory costs, impacting valuation and carrying costs. Strategies like leveraging Foreign Trade Zones (FTZs) can help reduce these costs.
• Financial reporting: Tariff-related costs must be transparently reflected in financial statements, including adjustments to COGS and inventory valuation.
• Supply chain and manufacturing: Tariffs disrupt supply chains, prompting companies to reassess supplier risk, diversify sourcing, and consider reshoring or nearshoring manufacturing.
• Sourcing and procurement: Procurement strategies must adapt to tariff pressures through contract renegotiation and identification of cost-effective suppliers.
• Sales tax and indirect tax: Tariffs affect indirect tax obligations, requiring careful analysis of VAT and sales tax implications.

To navigate tariff complexities effectively, businesses must be proactive and strategic. KPMG offers a range of tools and services to support clients across different stages of tariff management, from risk containment to strategic transformation. By leveraging our experience and guidance, companies can turn tariff challenges into opportunities for growth and innovation.