Chaos to order: Uncertainty over tariffs demands accurate forecasts in a fluid environment

The imposition of tariffs on imports into the U.S. has been a catalyst for global economic uncertainty. As markets consider reciprocal tariffs, or prepare to follow the UK’s example and negotiate a trade deal, the risk of making wrong decisions looms large for organizations.

Doubts over what lies ahead are already leading to price volatility and complexity within supply chains. Firms are wary of starting projects and committing investment, and as costs rise, they see slower revenue growth and compressed margins. Meanwhile, declining consumer confidence and concerns over the availability of products could slow spending and reduce demand.  

The ripple effect from the introduction of tariffs could be worldwide: JP Morgan Global Research predicts that a 10% universal tariff and 110% tariff on China will reduce global GDP by 1% — equivalent to approximately $1.15 trillion. 

Turbulent times call for greater agility 

As a finance leader, you’ve already seen the impact of this uncertainty. You know your team is expected to deliver strategic insights and analysis to support the business at a time when priorities and conditions are constantly shifting.  

Alongside this latest challenge, you must also continue to deliver on the needs of internal stakeholders including executives and business unit leaders, and external stakeholders such as regulators, auditors, investors, and customers.  

You need to forecast and plan within a context that even the International Monetary Fund (IMF) is finding tricky to manage. Following the announcement of a downgraded forecast for global economic growth in April, its chief economist acknowledged that making predictions had become particularly challenging. He said: "Many possible paths exist, reflecting the unpredictability surrounding future trade policy and the varied impact of tariffs across different countries.” 

Time to upgrade your tools 

Effective forecasting and planning depend on the rapid and reliable analysis of data to generate insights that optimize strategic decisions. This requires real-time access to relevant, integrated data. 

To achieve operational and strategic alignment in times of instability, you need shared visibility of all the moving parts. Availability of timely and integrated business data supports resource allocation, focusing the right team members on the right priorities, at the right time. It is also key to uncovering growth opportunities, like identifying new ways to offer value to price-sensitive consumers. 

However, siloed internal processes, disjointed systems, and lack of data transparency are limiting your ability to gain a true picture of financial performance and outlook. 

To respond to market shifts effectively, you need flexible FP&A tools that:  

• Connect multiple data sources to create single, holistic view of business performance 

• Streamline the planning, budgeting, and forecasting process by breaking down silos 

• Provide real-time access to financial data 

• Drive stronger outcomes by boosting collaboration between corporate teams and business units 

• Increase visibility with more granular data to inform strategic plans and highlight opportunities to reduce costs, mitigate risks, and fuel growth  

See the full picture in real-time 

You need a planning platform with dynamic forecasting capabilities that uses real-time data to update forecasts on a rolling basis, allowing plans to be quickly adjusted in response to changes in market conditions such as shifts in tariffs or supply chain disruptions. With the ability to model numerous scenarios and evaluate the impact of different choices on business outcomes, you can confidently and quickly pivot to minimize risk and take advantage of opportunities. 

Our AI-infused Integrated Financial Planning (IFP) application provides finance teams with a more agile and data-driven approach to forecasting. It increases the speed and accuracy of financial planning and strategic decision-making, helping businesses to build resilience and achieve predictable growth in a fluctuating market. 

A cloud-native, no-code architecture puts the Anaplan platform under the direct control of the finance team, rather than IT. This also lowers the total cost of ownership and provides a high level of flexibility and scalability that allows the tool to evolve with the enterprise. 

The Anaplan IFP application also provides purpose-built best practices with customizable and configurable templates, reports, and planning models, speeding up time to value. Embedded AI analytics deliver forecasting agility with the ability to carry out scenario modelling and “what if” analysis on the fly to safely explore possibilities. 

Anaplan also supports your accounting team by streamlining and automating financial consolidation and reporting to provide the FP&A team with a complete picture of the organization’s financial health. Enhanced compliance, an improved audit process, and increased data integrity and transparency all contribute to a faster, more efficient close and consolidation process. 

Be ready for the new normal 

There is a new baseline need for speed, flexibility, and accuracy in financial planning. The evolution of trade tariffs is set to have an ongoing impact on market and investor confidence – especially with concerns swirling about a possible trade war or a recession. Finance teams must support the wider business by evolving to a modern planning solution that accelerates data-driven, intelligent decision making.