Many companies still treat tariff-related risks as isolated, operational issues rather than integrating them into their broader enterprise risk management (ERM) framework.
This article is part of a series examining the key challenges and best practices that today’s CFOs face as they navigate tariff uncertainty in 2025. Download the full guide, “The CFO’s Guide to Tariff Uncertainty in 2025”, here.
For CFOs looking to build resilience into their organizations, this is a missed opportunity. Tariff uncertainty isn’t just a trade or logistics issue. It’s a strategic risk that has impacts across the broader enterprise, impacting cost structures, pricing strategy, customer relationships, compliance obligations, and even capital allocation decisions.
ERM is designed to help companies identify, assess, manage, and monitor the full spectrum of risks that could affect business performance. But, too often, the framework lags behind the pace of real-world events. Tariff risk is often underappreciated in formal risk registers. It tends to get lumped in within procurement or supply chain departments, with minimal strategic oversight. But, as we are now seeing, the consequences of inaction, or late reaction, can be severe. Given this landscape, treating tariff uncertainty as a minor operational inconvenience is no longer tenable.
Here are three key areas where CFOs can drive meaningful ERM updates:
- Risk Identification Must Include Trade Dependencies
Most organizations have a decent handle on supplier concentration or geographic exposure, but fewer have a holistic view of their tariff exposure. What percentage of our COGS is exposed to tariff-affected imports? Do we rely on any suppliers located in regions with rising trade tensions? What are the tariff classifications of our key inputs, and are there alternative codes available? The goal is to map trade exposure across the enterprise and identify vulnerabilities that might not be obvious on the surface.
- Scenario Planning Should Include Tariff Shock Events
Scenario planning is an essential part of ERM, but it often focuses on economic downturns, cyber breaches, or natural disasters. It’s time to add trade shocks to the mix. Run stress tests for sudden 25% tariffs on core inputs. Consider the impact of losing access to key suppliers due to retaliatory tariffs or sanctions. What would you do if a primary distribution market suddenly imposed duties on your products? These scenarios might not be high-probability, but they are high-impact—and they are happening more frequently.
- Governance Structures Must Involve Cross-Functional Teams
Tariff risk is inherently cross-functional. It touches finance, legal, procurement, operations, and strategy. ERM governance must reflect this complexity. Consider creating a standing trade risk task force, or incorporating trade experts into your ERM committee. CFOs should ensure that financial modeling, legal compliance, and supply chain adjustments are aligned and reviewed collectively, not in isolation.
Incorporating tariff uncertainty into ERM isn’t just about risk avoidance. It’s a chance to create strategic agility. Companies that understand their exposure and build responsive systems will not only avoid downside losses but also capitalize on upside opportunities.
As CFOs take on a more strategic role in guiding enterprise resilience, tariff risk should be part of the regular risk dialogue with boards, audit committees, and operating teams. Now is the time to make sure that your ERM framework reflects that reality.
If you’d like to learn how Schneider Downs’ CFO Services team can assist in navigating tariff-related uncertainties, please contact us.
Other related articles in our series:
- 5 Things CFOs Should Be Doing Now
- Why CFOs Must Build Scenario Plans and Be Ready to Pivot
- Why CFOs Should Lead the Charge on Supply Chain Risk Assessments
- Why CFOs Need Agile Pricing Models
- The CFOs Role in Agile Forecasting and Margin Protection
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