EuroFinance

With President Trump back in the Oval Office and tariffs imposed, treasury teams are navigating the uncertainties of US economic policy. The ripple effects are already visible—countries are engaging with Washington in pursuit of bilateral trade agreements, and companies are recalibrating their models to reflect what may become a more fragmented and transactional global trading environment.

A recent EuroFinance survey, drawing responses primarily from organisations based in North America and Europe and spanning industries from manufacturing to technology and energy, suggests that treasurers are not overreacting—but they aren’t standing still either.

Mild impact on broader corporate strategy—for now

When asked about the effect of Trump’s economic policies on overall business strategy, (72.73%) of respondents reported a slight impact, while (27.27%) noted no noticeable impact. No respondents indicated a significant effect or expressed uncertainty.

“For the US, North America, Europe, China, and Southeast Asia, Trump’s economic policies are having a major impact. That impact isn’t fully visible yet because we’re still in the early days—and many businesses have managed to soften the blow through inventory management and fronting a lot of imports,” said Ashutosh Mishra, Head of forex and commodity hedging treasury at JSW Steel.

He added that the effects are also being temporarily contained by the 90-day suspension of reciprocal tariffs, along with Trump’s public warnings to large retailers not to raise prices.

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Tariffs trigger treasury-specific actions

The introduction of tariffs has led to more direct implications for treasury teams. Half of respondents (50%) said they are reviewing their supply chain models. Others are adjusting financial planning: (40%) have revised cash forecasts, and (30%) each are reassessing their financing strategies and FX hedging frameworks.

At the recent Federal Open Market Committee meeting on June 18th, Chair Jerome H. Powell said, “changes to trade, immigration, fiscal, and regulatory policies continue to evolve, and their effects on the economy remain uncertain. The effects of tariffs will depend, among other things, on their ultimate level.”

Mishra added that while “supply chain review” may sound straightforward on paper, making meaningful changes is far from easy—particularly in the short term. “Today’s global supply chains have evolved over the past four decades, shaped by trade agreements, comparative advantage, tax incentives, subsidies, tariffs, and capital flows. These frameworks cannot be restructured in a matter of months, or even a few years.”

He pointed out that many large multinationals are unlikely to write off the substantial investments they’ve made in manufacturing infrastructure, especially in China. “Even if there’s a desire to reshore production to the US, challenges like the shortage of affordable, skilled labour—and limited consumer appetite for doubling or tripling prices—pose significant issues.”

Also read: As trade tensions continue, treasury turns experience into strategy

According to Mishra, current supply chain reviews are primarily tactical. “Companies are routing the imports through low tariff countries, moving a small part of the manufacturing (last few stages-assembly and packaging) to low tariff countries.”

FX strategies remain largely unchanged

The weakening US dollar has not led to sweeping changes. A majority of respondents said no major FX strategy changes are expected. However, just over a quarter plan to increase FX hedging, while some are shifting some transactions to stronger currencies, while others are reassessing their cross-border investments.

Little movement in investment approach despite rising yields

The impact of rising US Treasury yields has been relatively muted. While just over half of respondents said it has affected their investment strategy slightly, others reported no impact.

Mishra added that these developments are likely to push inflation expectations higher in the coming months, leading to an uptick in long-term US bond yields. “Treasury teams may need to take steps to avoid a rise in funding costs. Any dips in long-term yields driven by market movements could be good opportunities to lock in rates using swaps and derivatives,” he noted.

“For cash-surplus companies, the strategy is quite different. They should stay at the short end of the curve to benefit from rising yields. At the same time, it’s important to diversify into assets like gold and Bitcoin, as fiat currencies such as the US dollar and euro risk losing value due to record government borrowings and fiscal deficits,” Mishra explained.

Also read: Strategic responses for effective cash management in a volatile rate environment

Split views on inflation; a cautious consensus on rates

When asked about inflation expectations over the next six months, a third of treasurers said they expected inflation to rise. While others forecast no movement, many are still unsure.

“The effects on inflation could be short-lived—reflecting a one-time shift in the price level. But it’s also possible that the inflationary impact may prove more persistent,” said Chair Powell during the FOMC meeting. “Avoiding that outcome will depend on the size of the tariff effects, how long it takes for them to fully pass through to prices, and, ultimately, on our ability to keep longer-term inflation expectations well anchored.

“Our obligation is to ensure that those expectations remain firmly anchored, and to prevent a one-time increase in prices from turning into an ongoing inflation problem. As we act to fulfill that responsibility, we will continue to balance our dual mandates—maximum employment and price stability. It’s important to remember that without price stability, we cannot deliver the sustained periods of strong labor market conditions that ultimately benefit all Americans,” Chair Powell added.

Views on US interest rates were clearer. A majority expect rates to hold steady, while others anticipate a rate cut. This indicates a general market view that the Fed may begin easing if inflation remains within acceptable limits.

At the recent FOMC meeting, the interest rate was kept unchanged at 4.25%-4.5%. “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance”, Chair Powell said.

Shifting conditions, stable responses

Mishra noted the broader issue of policy unpredictability. “There is a great deal of uncertainty around whether these policies will hold. Corporates require consistent policy environments to plan investments, maintain supply chains, and deliver competitively priced goods to the market,” Mishra said.

While the imposition of tariffs and renewed trade activity under President Trump have added new layers of complexity, the treasury response appears balanced and measured. Rather than reacting with sweeping strategy changes, most teams are focusing on selective adjustments—tightening forecasts, refining hedging activity, and keeping a close watch on regulatory and economic signals as they evolve.