Trade wars can challenge businesses of all sizes, disrupting supply chains, driving up costs and introducing new operational complexities. In times of uncertainty, leaders must think creatively to protect margins, preserve customer trust and uncover new opportunities.
To help companies weather these disruptions, the members of Forbes Finance Council explore some practical strategies for navigating trade wars. From reshaping supply chains and leveraging data to rethinking market approaches and financial planning, these recommended approaches can help minimize the impact on your business and your customers.
1. Pause Major Investments
In today’s volatile trade climate, leaders must think beyond traditional hedging. Two key strategies are to pause major investments until trade policies stabilize and to reshore or nearshore supply chains to reduce tariff risks and boost resilience. These moves build flexibility and position firms to adapt faster in an unpredictable global economy. – Giri Lankipalle, Giri Lankipalle Financial Services
2. Diversify Supply Chains
To mitigate trade war risks, leaders can do three specific things. Firstly, they can diversify supply chains by sourcing from multiple countries to reduce dependency on any single market. Secondly, they can leverage free trade agreements by utilizing preferential tariffs in unaffected regions. Lastly, they can advocate through industry groups by pushing for favorable trade policies through collective lobbying. – Crystal Gilmore, The Spearhead Group Inc.
3. Conduct Scenario Planning
To navigate trade wars, business leaders must embrace scenario planning, maintain strategic flexibility and foster agility. Volatility demands reinvention and bold, unconventional leadership. Staying close to market shifts and preparing for multiple outcomes is key to minimizing impact and seizing emerging opportunities. – Ayo Adepoju, Ecobank Transnational Incorporated
4. Research Suppliers Who Will Minimize Tariff Impacts
Research and work with suppliers who will apply a strategy to minimize or eliminate your tariff impacts. Understand the harmonized tariff codes and use them appropriately within the law. Consult with a trade attorney to ensure you act responsibly by applying the correct codes for your company. – Dave Sackett, Persimmon Technologies Corp.
5. Invest In Data Analytics To Model Tariff Impacts
Business leaders must adopt a dual strategy: diversify supply chains to reduce dependency on high-risk regions, and invest in data analytics to model tariff impacts in real time. Agility, informed negotiation and scenario planning turn uncertainty into strategic advantage—protecting both margins and customer value. – Swati Deepak Kumar (Nema), Citigroup
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6. Maintain A Flexible Mindset
Navigating trade wars takes steady leadership and a flexible mindset. This is true of the business environment in general: Don’t get stuck in old models. Move quickly, stay close to your team and lean on trusted advisors, formal or informal, for clarity. The leaders who adapt well don’t just protect the business—they serve the internal team, clients and external stakeholders through uncertainty. – Patrick Lonergan, Vital Wealth
7. Explore New Markets And Fresh Connections
This is a pivotal moment to look beyond long-standing relationships, explore new markets and build fresh connections. It’s a chance to break from the familiar, unlock new growth and diversify revenue. For entrepreneurs ready to move forward, it’s not just an opportunity—it’s a defining moment in history. – Steven Furtado, Savoir Wealth
8. Leverage New Tax Strategies
Business leaders can navigate trade wars by leveraging tax strategies, like IRC 7702, to create arbitrage from business expenses. By repositioning funds into tax-advantaged vehicles, they build liquidity and tax-free growth, reducing reliance on volatile markets. This shifts the game by preserving capital, shielding profits and enhancing long-term resilience. – Andre Pennington, Pennington Law
9. Focus On Agility And Financial Resilience
Trade wars demand agility, not panic. They also expose weak spots in strategy, not just supply. I focus on financial resilience—building liquidity buffers, renegotiating vendor terms and leveraging real-time data to shift demand patterns. Stay close to your customers—understanding their evolving needs allows you to pivot offerings and pricing strategies without compromising trust or value. – Nike Ajao, OneBarrow Corp.
10. Concentrate On Business Basics
The best way to navigate uncertainty is to focus on business basics. Manage costs as best you can and maximize earning potential—make sure your business checking account offers high-yield checking and always have access to a line of credit for cash crunches. It’s imperative to have a clear handle on your financial standing to succeed. – Eyal Lifshitz, Bluevine
11. Balance Short-Term Tactics With Long-Term Strategy
To navigate trade wars, business leaders should diversify supply chains across regions and balance short-term tactics like stockpiling with long-term strategy realignment. A long-term approach will need to be customized by industry and supplier importance. For example, companies may consider strategic investments in critical suppliers while developing alternatives for others. – Sunayana Gutta, Reddit
12. Focus On Local Markets
Diversifying, adapting and prioritizing customers can transform trade wars into chances to rethink operations and boost customer value. For example, focus on local markets. Diversify supply chains to reduce reliance on one geographic region. Adjust pricing smartly to partially absorb the effects of tariffs. Hedge financial risks with futures contracts or options. Redesign products with fewer imported parts. – Anatoly Iofe, IceBridge Financial Group, LLC
13. Simplify Your Business
Simplify your business and build financial resilience. Delay new financial commitments until the economic situation becomes clearer. Identify and cut unnecessary expenses to save money. These small savings can add up, providing financial breathing room during uncertain times and reducing the need to increase prices for customers. Avoid predicting and concentrate on what you can control. – Brian Lasher, Euclid Harding LLC
14. Establish Solid Relationships With Local Suppliers
Small business owners can successfully navigate trade wars by establishing solid local supplier relationships, maintaining sourcing flexibility and monitoring worldwide trends. By keeping lines of communication open and flexible, they may reduce disruptions and safeguard both their company and their clients by keeping lines of communication open and being flexible. – Jared Weitz, United Capital Source Inc.
15. Be Proactive And Take A Long-Term Perspective
Adopt a proactive and diversified strategy focused on resilience. Key actions include monitoring global developments, diversifying sourcing and manufacturing, and renegotiating supplier contracts. Investing in scenario planning and clear communication with stakeholders maintains trust. Ultimately, agility and a long-term perspective will better equip the business and help it emerge stronger. – Pankaj Vasani, Cube Highways InvIT
The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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