How tariffs are reshaping budgets — and what CFOs can do about it

For finance leaders, having to adjust budgets to market oscillations is nothing new. However, with tariffs shifting and impacting the costs of imports and exports overnight, CFOs are heading into the 2026 budgeting cycle with more uncertainty than ever before.

They once felt like just a political or trade issue, but today, tariffs have become a problem for finance teams. They distort budgets, delay investment decisions, and complicate expense tracking across regions. Their effects are felt all around the globe, with CFOs reporting direct impacts on forecasting and profitability.

In an environment where stability is no longer guaranteed, how can finance leaders stay in control of their budgets?

As tariffs reshape how businesses operate, the CFO’s job is moving from precision planning to stabilising operations through agility and clarity.

Tariffs are taxes applied to imported goods at the point of exit from their country of origin. These taxes are paid to the government by the companies importing the products, who, to cover this extra cost, may charge some or all of it to their customers. At first glance, tariffs might seem like a pricing increase issue, but the effects run much deeper.

Businesses that are unable to afford tariffs may look for alternative domestic suppliers, or, if they’re unable to, purchase fewer foreign goods. In return, as Hermann Simon of Boston-based consultancy firm Simon-Kucher explains in a recent opinion piece, “manufacturers may reduce their selling price to stay competitive overall, but this is eroded throughout the value chain, resulting in higher end prices which then have a negative impact on demand and loss of sales volumes.”

Tariffs’ effects are felt all around the globe, with CFOs reporting direct impacts on forecasting and profitability.

So, while prices may be adjusted, consumers will still see costs going up, leading to less profit for businesses. This shows how tariffs impact the economy of the country imposing them, as well as that of any country they do business with, creating challenges for companies all over the world.

For CFOs, tariffs introduce significant uncertainty and complexity into financial planning. They must account for rising costs, shifting supply chains, and unpredictable pricing strategies from global partners, which makes budgeting, forecasting, and maintaining profit margins more difficult. This creates disruptions in day-to-day operations that CFOs must handle, all while trying to maintain stability and business growth.

In April 2025, the U.S.’s announcement of higher tariffs on imported goods from virtually all of its trading partners set off a global discussion that still hasn’t been settled. For some countries, the U.S. government has established a 10% baseline tariff rate, but for others, that rate is even higher, and it can further vary depending on the product.

Additionally, some of the tariffs proposed in the original announcement are still in discussion, while others are due to go into effect in November 2025. Even so, U.S. tariffs are expected to keep changing in response to other countries’ counterpolicies and as new executive orders are issued.

These new trade policies fuel market uncertainty and have ripple effects worldwide, such as volatile currency fluctuations and declining import-export activity between affected countries. At the same time, supply chain localisation and stricter ESG regulation are forcing companies to adopt new legal and operational standards across the board, raising compliance requirements and further increasing costs.

Tariffs impact the economy of the country imposing them, as well as that of any they do business with, creating challenges for companies all over the world.

The political reasons behind these shifts differ by region. But the financial impacts of tariffs on businesses are the same no matter where they are: unpredictable costs, tighter margins, and increased scrutiny of businesses’ budget agility.

This new reality is also affecting the role of finance leaders everywhere. Instead of being asked for certainty in their forecasting — something near unattainable in the current scenario — they’re being asked to quickly adapt to market changes and to stay as in control of their operations as possible.

Forecasting under tariff pressure has become less about precision and more about adaptability. Sudden shifts like the overnight imposition of import duties can instantly change supplier pricing. Similarly, volatile currency swings can distort cost baselines even when supplier prices remain stable.

For example, at an exchange rate of 1 EUR = 1.10 USD, a €100,000 order from a German supplier would cost a U.S. company $110,000. However, if a week later the currency rate has changed to strengthen the Euro, the same order would cost more even without the supplier increasing its prices.

This creates growing operational strain on Financial Planning and Analysis (FP&A) teams, who are spending less time on strategic planning and more time running models and revising inputs. Protiviti’s 2025 Global Finance Trends Survey Report shows that financial planning and analysis is precisely the area that requires the most attention due to the impact of tariffs, with 64% of CFOs saying that tariffs have made forecasting less reliable and 59% reporting a hit to profitability.

Tariffs and trade volatility aren’t just affecting supply chains. They’re creating uncertain scenarios that drive CFOs to adopt continuous forecasting practices to keep up with the market’s rapid changes. Finance leaders are now tasked with building more flexible forecasting models and scenario-driven budgets that allow them to adapt faster. This shift values agility as the truest form of accuracy, especially as shifting trade policies are expected to keep impacting planning and costs, while also introducing less visible expenses that can strain budgets.

Tariffs often draw attention for their direct impact on the cost of material goods. However, their hidden costs can be just as financially significant for businesses, even though they rarely show up on traditional budget lines.

Addressing all the challenges brought on by ever-changing trade policies involves cross-collaboration between multiple departments. Legal and compliance teams need to interpret and respond to new trade regulations. Procurement teams spend more time re-sourcing suppliers in new regions. Logistics and insurance costs rise as supply chains shift. Even travel budgets increase due to the need to visit new markets or to meet with suppliers to renegotiate contracts. The result is a web of fragmented expenses that makes financial visibility a growing challenge. Without a unified, real-time view of operational spending, these tariff-related blind spots can go unnoticed.

This is where automation and real-time expense visibility become essential. Protiviti’s Report shows that 72% of finance organisations are already employing AI for process automation, financial forecasting, and risk assessment and management. Additionally, expense management software such as Rydoo’s gives finance teams the insights they need to consolidate spending data across departments, categories, and geographies, giving finance professionals the clarity they need to identify cost overruns early on and respond before issues escalate.

With uncertainty now being the norm, having the right tools in place is key for CFOs to regain control over costs, have full financial visibility of their businesses, and build the foundation for more resilient budgets.

As international trade policies shift, so does the role of the CFO. Beyond managing their own teams and guiding them through uncertain scenarios, finance leaders must now supervise the cross-functional collaboration needed to maintain visibility over internal and external data and to adjust to any changes that may resurface.

As stated in Protiviti’s Report, a vast majority of CFOs are using automation tools for spend overview, forecasting, and risk management, areas in which they have achieved measurable cost optimisation over the year. These automated processes help CFOs stay agile and reassure stakeholders. They also allow them to build more resilient budgets, as they help avoid unexpected or last-minute surprises.

Budgeting can no longer be static. It needs to adapt and evolve with every shift in policy or market. Agility has become key in responding to shifting trade policies, regulatory changes, and currency volatility. It should also seep into budget planning, especially as tariffs will continue to impact financial operations.

While planning for the upcoming year, CFOs can build stronger budgets by implementing scenario modelling based on best-, base- and worst-case tariff-related scenarios, which allow for quick strategy pivots. Similarly, rather than updating models annually, finance teams should adopt a quarterly model revision that considers tariff impact on supplier pricing, currency rates and other relevant market data.

When it comes to incorporating supplier visibility into budget planning, centralising vendor and tariff exposure data allows finance leaders to assess risk levels in supplier contracts and plan alternatives when needed. It also helps ensure alignment across teams. As tariffs may lead to overnight changes in the market, centralised data and regular data reviews guarantee that finance, procurement, legal, and operations teams are in sync and adjusting to shifts based on the same data.

Finally, tariff-related expenses require even more detailed and timely expense monitoring. They often have costs that can go unnoticed, so it’s vital to identify and categorise them to prevent blind spots in budget planning. AI-powered tools allow finance teams to do just that and plan budgets more effectively.

Global trade shows no signs of stabilising anytime soon. Tariffs, counter-tariffs, and supply chain reconfigurations have become a constant, rather than one-off changes. And while finance leaders can’t control any of these variables, they can still control how their businesses respond to them.

The most resilient finance teams and leaders are those who shift from reactive forecasting to proactive scenario planning, from annual to quarterly model updates, and from fixed to flexible budget planning. Centralising expense data and enabling real-time decision-making gives finance teams the insights and clarity they need not just to adapt to overnight changes, but to do so with confidence — no matter how fast the world changes.