Yesterday, President Donald Trump outlined his plan to impose tariffs on most of the world. With a few exceptions, just about every country will be impacted by the White House’s decision. Markets reacted as expected, tanking as the anticipation of trade disruptions and price increases roiled the exchanges.
Laurent Descout, CEO and co-founder of Neo, a Fintech in the treasury management and payments sector, commented on Trump’s policy. He said tariffs are creating fresh uncertainty in global markets and businesses with global operations, factoring in the uncertainty of currency volatility.
“To weather these storms, treasurers should look to adopt an FX-first strategy, incorporating hedging into their day-to-day business activities. The result is not just risk management, but better cash flow forecasting and a better handle on out-of-control currency swings,” said Descout. “Beyond hedging, businesses must have seamless access to multiple currencies without the burden of managing multiple accounts. They need solutions which enable companies to send, receive, and hold funds in various currencies efficiently, helping them navigate shifting trade conditions with greater flexibility.”
He added that trade barriers can extend inventory cycles, locking up working capital. He said cross-border payments are necessary to maintain liquidity.
Douglas Grant, Group CEO of Manx Financial Group, shared his perspective on the tariff policy. He said that the tidal wave of global tariffs marks the start of a turbulent period for international trade.
“With the Trump administration’s unpredictability, nothing can be taken for granted. For UK SMEs already grappling with high interest rates and persistent inflation, cashflow preservation must be a top priority,” said Grant. “Labour’s belt-tightening Spring Budget, coupled with a sluggish domestic economy and an investment freeze dragging into its fourth month, underscores the need for smarter financial strategies. Prolonged inflation keeps interest rates elevated, delaying business investment and adding to the strain. To navigate these challenges, SMEs must rethink their financial strategies.
Grant said their in-house data indicates almost 1/3rd of UK SMEs have already scaled back or paused certain operations due to financial constraints and uncertainty.
“As the backbone of the economy, SMEs need a stable, supportive funding environment. Labour’s pro-growth rhetoric has yet to translate into meaningful reforms that improve financing access,” stated Grant.
The big unknown now is how global trading partners will react. Will they concede and illuminate their barriers as Trump pursues “reciprocal” tariffs? Or will a massive trade war ensue?