Navigating risk in turbulent times

Finance chiefs are increasingly tasked with balancing risks and benefits tied to layoffs as they make difficult cost-cutting decisions in response to rising expenses from myriad pressures — including tariffs and digital spending. 

U.S. layoffs this year through July rose to 806,383 — a 75% increase year-over-year, marking the highest January-to-July tally since 2020, when pandemic shutdowns pushed up pink slips beyond 1.8 million, Newsweek reported, citing statistics from Challenger, Gray & Christmas and impacts from government downsizing, corporate restructuring and the growing effects of artificial intelligence.

“Facing lower economic growth forecasts, an elevated cost of capital and policy uncertainty, CFOs are turning to cost optimization programs to defend margins,” Gartner, a consulting firm, said in a recent report.

“However, CFOs face a difficult trade-off. They must ensure the margin-preserving cost optimization programs don’t inadvertently cut too deep into the human capacity and capabilities required to drive growth during the next cycle,” Gartner said. 

While layoffs are on the rise, they aren’t always productive, according to the report, written by Vaughan Archer, a senior director and analyst in Gartner’s finance practice. Common mistakes include avoiding conflict by spreading cost-savings goals evenly across functions, determining who will be laid off by adhering to inflexible rules like first-in-first-out, or failing to anticipate costs resulting from layoffs, such as the need for contractor hiring or overtime pay to complete essential with less staff. Such unanticipated problems result in “unsustainable cost creep.”

Vaughan’s report outlines some practical steps finance chiefs can take to help their firms make smarter decisions on workforce cost challenges and, if needed, layoffs: 

1. Help your firm exhaust non-personnel cost-cutting options. Payroll typically accounts for a big chunk of functional and operational spending: for example, it accounts for 74.6% of the average finance function budget, according to the report. But CFOs should give their firms a range of other cost-savings measures that don’t affect headcount or require restructuring charges before moving on to layoffs, Gartner said.
2. Forget across-the-board staff reductions. CFOs must keep in mind the strategic importance of functions or teams to the broader corporate strategy when making headcount cuts. “Not all personnel expenses are created equal, and by treating them as such, CFOs risk penalizing the more efficient parts of the organization and eroding important sources of value,” Gartner said. 
3. Give budget-holders tools and data to make layoff decisions. Some managers use backward-looking measures when developing a list of potential employees to be cut. Instead, employees should be segmented "according to how they align with the future business strategy and their direct impact on revenue or performance.” Also, CFOs need to give management information that will enable them to quantify salary and non-salary cost reductions associated with a layoff, as well as the upfront costs that include severance, prorated bonuses, and other expenses associated with certain cuts, Gartner said.  
4. Stick with cost-cutting: And set up tracking systems to ensure the company does. CFOs must guard against gains in cost reduction initiatives being eroded via new expenses such as overtime and aggressive rehiring. “Tasking FP&A, for example, with maintaining a rolling list of departments and roles where cuts have been implemented in the last two years will help monitor cost reemergence,” Gartner said. 
5.  Communicate to retain critical talent. CFOs must work with senior human resources leadership to clearly communicate the financial rationale of the layoffs and cost-cuts. “Communications must address two critical phases: preparing management for employee layoffs and ensuring retained employees — especially top performers — remain consistently engaged, focused and motivated post-layoff,” Gartner said.

The financial fallout of ransomware attacks is climbing even as the number of cyber insurance claims falls, cyber risk management firm Resilience said in a report released Tuesday.

During the first half of the year, the average cost of an individual ransomware attack rose by 17%, according to the research, which was based on an analysis of Resilience’s internal insurance claims. Ransomware attacks accounted for 76% of incurred losses in H1, compared with 46% in the same period last year.

“Financial incentives are driving cyber criminals to be more clever and creative, and companies are facing larger losses than ever before,” Resilience CEO Vishaal Hariprasad said in a press release. “Cyber crime comes in waves. Attackers exploit a tactic until defenders catch up, then pivot to new weaknesses.”

Ongoing efforts to combat ransomware have yielded limited gains, according to the Resilience study, which aligns with other recent reports.

The average ransom demand made to retail organizations reached $2 million this year, a two-fold increase compared with 2024, according to an August report by cybersecurity company Sophos. Yet, in a positive sign, the average cost of recovering from a ransomware attack, excluding any ransom payment, has dropped by 40% during the past year to $1.65 million, the lowest point in three years, Sophos found.

“These trends suggest that, while threat actors are demanding more, retail organizations are becoming more resilient by improving recovery processes and potentially holding firmer in ransom negotiations,” according to a blog post on the Sophos research.

The Resilience report highlighted silver linings as well. In the first half of 2025, the volume of incurred claims across Resilience's portfolio dropped by more than half (53%). Also, the Resilience portfolio has seen significantly low payment rates at just 22% in 2024, the cyber risk management firm said.

Still, ransomware attacks remain costly and disruptive, Resilience said. Among Resilience clients, the average insurance loss from a ransomware attack in H1 2025 exceeded $1.18 million, compared with $1.01 million in the same period last year, according to the analysis. 

Cyber criminals are using increasingly sophisticated extortion tactics, including artificial intelligence-powered social engineering and “double extortion” — demanding a ransom payment for both data decryption and to prevent its public release, the report said. The evolving ransomware playbook also has included theft of cyber insurance policies to better benchmark and set higher ransom demands, it said.

“These new strategies are fueling a threat landscape where fewer attacks can still cause immense financial damage,” Resilience said in its release.

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By Sovos

Earlier this year, the CFO of a mid-sized manufacturing firm received an audit notice from the state of Illinois. Nothing unusual - their sales tax systems were clean, fully automated and had passed audits before.  

But this audit focused instead on something they hadn’t prioritized: use tax. 

It started with a few untaxed purchases from out-of-state vendors. Then came P-Card transactions, untaxed software subscriptions and some drop shipments from a newly acquired business unit. Within weeks, the state auditor had flagged over $800,000 in missed use tax accruals, plus interest and penalties. 

“It blindsided us,” the CFO later admitted. “We thought our sales tax systems had us covered. No one told us that use tax was where the real risk lives.” 

Use tax: the quiet killer in tax compliance

For companies doing business across the U.S., sales tax gets the attention. It’s front-facing, calculated at the point of sale and often plugged into an ERP or ecommerce engine. Use tax is different – a backstage liability that applies when tax isn’t charged by the vendor, and your organization must self-assess and remit it. 

Use tax often hides in the shadows of automation: 

• AP invoices from unregistered vendors
• Import transactions
• P-Card purchases outside tax workflows
• SaaS, services and indirect spend

It’s rarely visible, rarely audited internally and, increasingly, the first place auditors will look for revenue.

Why states are targeting use tax

State revenue agencies have shifted their strategies. Instead of combing through well-governed sales tax systems, they’re diving deep into AP data, testing vendor logic,and looking for gaps in accrual processes. 

And they’re finding them. 

“We see error rates above 10% in most manual use tax reviews,” one former state auditor told us. “Especially in companies with multiple ERPs or recent acquisitions. That’s where the money is.” 

Unlike sales tax, which is passed through to customers, use tax hits your bottom line directly. Every missed accrual is a liability. Every overpayment is lost cash. Yet few companies have systems in place to monitor or optimize it.

What makes use tax so complex?  

The larger and more complex your organization, the more likely use tax is slipping through the cracks. Common drivers of exposure include:

• A recent acquisition might double your vendor count and break existing rules. 
• A reliance on spreadsheets might let errors accumulate for years. 
• A high-volume P-Card program might be saving procurement time and quietly generating massive tax exposure. 

One Fortune 100 manufacturer discovered over $4 million in missed use tax just by analyzing P-Card data — even though they had robust sales tax systems. Sound familiar?

What makes a “good” tax compliance strategy? 

It’s not enough to simply add use tax rules to an existing sales tax engine. That’s like patching a tire with duct tape – it may hold in calm water, but will fail under audit pressure.

What leading finance and tax teams are now doing is reframing use tax as a data problem, not just a compliance one. 

They’re asking: 

• Where is our use tax logic stored? 
• Who owns validation across vendors and invoice types? 
• Can we simulate audit outcomes before they happen? 
• Can we review millions of transactions without weeks of manual work? 

They’re shifting from reactive clean-up to proactive control. 

A smarter, modern option: Sovos OptiTax™ 

That’s where Sovos OptiTax ™ comes in. It’s a new kind of use tax platform – purpose-built, analytics-driven and ERP-agnostic by design. 

Instead of relying on brittle integrations or consultant-led clean-ups, OptiTax lets companies: 

• Upload AP data from any system
• Run automated validations, accruals and corrections
• Apply tax logic by GL code, vendor, cost center, or geography
• Visualize exposure, run reverse audits and prepare audit-ready logs
• All without replacing your ERP or tax engine

It’s fast, scalable and, for many Sovos customers, a revelation. 

A financial services company recently used OptiTax to review two years of AP transactions. The result? $1.8 million in overpaid tax recovered, and $750,000 in under-accruals fixed before an audit could begin. 

What’s at stake? 

In an era where finance leaders are being asked to do more with less and where audit risk is becoming more data-driven, use tax can no longer be a back-office afterthought. 

It’s time to treat it like the liability it is, and the opportunity it could be. 

Ready to flip the script on use tax? 

Sovos OptiTax helps companies see what auditors see, before they do. If you’re ready to understand your exposure and take control,  let’s talk. 

Market volatility and rapid technological change are putting pressure on CFOs’ planning efforts as they navigate fresh uncertainties — from tariffs affecting supply chains to AI rollouts and growing competition for talent. 

At an American City Business Journals virtual roundtable last week, the CFO of workforce technology provider Magnit and the vice president of finance and strategy at kitchen products company Made in Cookware suggested ongoing scenario planning is essential.

“As I think about challenges today —  beyond AI and technology — we've got this uncertainty in the markets with tariffs and seeing customer pullbacks,” said Rudy Gonzalez, CFO of Folsom, California-based Magnit. “As a CFO, you have to be a utility player.”

CFOs should plan for optimization and recovery, including how to manage debt if interest rates rise. They should also anticipate customer churn, he added.

Jimmy Du, vice president of finance and strategy at Austin-based Made in Cookware, said the company has been running scenario plans for some time. Systemic events in recent years — including the COVID-19 pandemic and bank failures — can affect cash and revenue projections, and companies need to pivot, he argued. Now, the company is assessing the fallout from trade tariffs.

“Tariffs, to some degree, are outside of our control, but we're asking our manufacturers to share the cost,” he said. The company is scrutinizing expenses, including headcount, processes and warehouse operations — while working to retain inventory and meet growth targets. It’s also looking for ways to offset tariffs while keeping operational expenditures tight.

Amid lingering inflation and high financing costs, return on investment “has to be held to a higher standard” than just a few years ago, Gonzalez said.

Holding on to cash to invest in growth

Magnit, after paying down debt, built a cash “war chest” that allowed it to invest in automation and agentic tools to offset wage inflation, Gonzalez said. 

Made in Cookware said it hasn’t made major changes to its allocation strategy in response to economic pressures, but as an inventory-heavy business, maintaining the flow of payments to suppliers is a priority, Du said. The company has frozen hiring and accelerated cost–cutting measures. 

Cost savings, including from the back office, will be redeployed to marketing, which the company sees as a critical growth driver. 

“Marketing spend is probably the last thing I would touch, as long as it's spent efficiently and at the right metrics — all of the savings that we make are then redeployed to drive growth,” said Du. 

Managing AI adoption

Both companies are cautiously optimistic about the role of artificial intelligence in streamlining tasks across finance and the broader workforce. Made in Cookware is testing the use of AI to automate tasks, including invoice tagging. 

While using AI to drive efficiency is appealing, companies should weigh the benefits of an enterprise platform against a patchwork of point solutions, which can be less attractive “because it's hard to get the ROI when you're duplicating costs and have to build integrations,” Gonzalez said.

Companies also need to consider how much human oversight AI-generated output requires, particularly around data privacy, he added.

Panelists also discussed how CFOs can attract top talent to their firms, with remote work and quicker career development paths acting as possible inducements for up-and-coming professionals.

Remote work “opens the door to talent that's not right by a physical office, and that used to be a limiting factor for companies,” Gonzalez said. Remote work also opens up opportunities to bring in talented candidates who are based outside the U.S., he added.

Five years after the pandemic normalized remote work, companies are still wrestling with the pros and cons of requiring employees to return to offices. For CFOs, a strategic approach to office space and RTO goes hand in hand with prudent budgeting. 

That’s because, for many companies, office real estate remains the second-largest expense, following payroll, whether “it’s being used or it’s not,” Andrew Farah, CEO of workplace analytics company Density said. It’s up to a company’s leaders to make the tough decision to either use it or lose it — in order to avoid shelling out for empty space.

“The main question is, should you try to get your employees back into an office, or should you let your physical space go?” Farah said in an interview. For CFOs, who tend to consider real estate in terms of numbers, answering the RTO question can come down to the simple question of utilization: “if you have a real estate portfolio that's not being used, get rid of the buildings or require people to come back,” Farah said.

Utilization refers to how often and effectively employees are making use of a space: a good meeting room utilization rate, for example, is between 40% to 60%, according to a 2024 post by workplace software firm Envoy.

The San Francisco, California-based company provides workplace analytics software and sensors aimed at enabling companies to gain insight into how their real estate is being utilized, according to its website. Farah has served as Density’s CEO since May 2014, and previously served as a managing partner for software development agency Rounded, according to his LinkedIn profile.

The ‘de facto’ remote pitfall

The office space question has continued to loom large in the minds of CFOs and other C-suite leaders, as many high-profile companies — as well as the federal government under President Donald Trump — have begun to issue return to office mandates.

Many of the RTO policies that have been enacted this year have triggered pushback from both company employees and even executives, some of whom themselves prefer hybrid or remote work, CFO Dive previously reported.

That could be partially due to wishy-washy guidance from top-line leadership: many C-suite leaders are unwilling to be strict about RTO policies “for fear of attrition or the inability to recruit, Farah said, “so what they do is they just choose not to have a policy,” he said. “Or they say we're hybrid, which actually means many things. Hybrid is a terrible term. It's imprecise, it's vague,” and Farah said it’s often left to managers to execute.

In such cases, “hybrid” companies often turn into “de facto” remote companies, he said — with the business still footing the cost of real estate.

Fixing the ‘movie theater’ problem

As well as unclear guidance, many executives can often have a murky idea regarding exactly how the office spaces they do have are really being used by their employees — a question distinct from occupancy. For CFOs as the stewards of finance, figuring out if the space is being put to effective use is a critical factor in determining an RTO policy, especially in the midst of rising cost pressures.

Businesses that are implementing RTO policies have also found themselves facing both logistical and financial challenges, such as pricey office refurbishments to entice employees that can strain an already tight budget or a shortage of necessary supplies such as desks and WiFi access, March reports by Raconteur and NPR found.

Underutilized buildings tend to have what Farah calls the “movie theater problem,” where, entering into an empty theater, patrons “naturally spread out,” he said. “They don’t sit next to each other.” A similar pattern emerges in underutilized offices, where, lacking critical mass, employees will fill the space they’re in, but “for a CFO, it's just dollars being spent on space that's not being used,” Farah said.

As such, many “CFOs are turning to their heads of real estate and expecting hard data on utilization,” Farah said. Finding out key numbers — such as exactly how much the business is spending per head — can help finance chiefs make targeted decisions regarding if “you're going to grow some places [or] you're going to consolidate [in] others,” he said.

Historically, chief revenue officers mainly focused on driving sales and revenue growth. Today, CROs are front and center when it comes to such areas as financial planning, investor relations, pricing strategies and forecasting, according to Irina Wolpert, a leader with the executive search firm Egon Zehnder. 

As businesses have become more complex and market dynamics have shifted over the last three to five years, the responsibilities of the CRO have expanded to “just encompass a much broader set of strategic and operational functions,” Wolpert said. 

That leaves CROs nudging up against CFOs’ typical remits, an evolution that comes both with potential points of tension as well as greater opportunities to create success for their businesses.

“Both roles are incredibly critical and in fact have to coexist and partner in order for the company to have a long-term, sustainable growth agenda,” Wolpert, who serves as leader, financial services, tech & fintech practice groups at Egon Zehnder, told CFO Dive in an interview.

Weighing risk versus growth  

One of the newer entrants to the C-suite, the CRO position began to gain ground as companies — especially startups in the technology and software spaces — increasingly focused on high growth, according to a 2015 article by VentureBeat.

The position, which could also be occupied by a “chief experience officer,” or “chief growth officer,” is “tasked with creating a single revenue engine — from lead generation in digital marketing to closing the sale,” a 2023 write-up by McKinsey said. “The CRO’s role goes beyond sales and marketing to the entire market landscape, customer journey, and strategic expansion plans.”

As such, one of the main areas of tension between a CRO and CFO tends to be that “balance of risk versus growth,” Wolpert said. CFOs tend to have a more conservative approach, focused on risk management and financial stability, while CROs “are typically incentivized to take much more calculated risks to achieve more aggressive revenue targets,” she said. 

“Typically, where we see the tension is, number one in the area of resource allocation,” Wolpert said. “If you think about the traditional role of the CRO, typically they tend to push for more resources to drive sales and revenue growth. The CFOs, rightfully so, are typically much more focused on budget constraints.”

Prior to joining the Zürich, Switzerland-based leadership advisory firm, Wolpert served as global head of sales enablement and go-to-market strategy for e-commerce company Amazon, according to her LinkedIn profile.

A former professional ballet dancer turned business executive, Wolpert also served a 15-year span at American Express in various roles including as head of sales enablement and marketing and VP, global sales enablement.

While the two positions can tussle over growth versus stability, both the CRO and the CFO are morphing into more strategic leaders within the C-suite.

“Given how both roles have evolved, these two critical roles can actually build a much stronger partnership than they ever could in the past,” Wolpert said. In order for businesses to achieve their goals, that collaboration is critical, she said.

“When I think about strategic planning at the end of the day, you need both functions to focus on revenue growth and they have to be completely in alignment on their financial goals,” Wolpert said. “And I think you need a very strong CFO and a very strong CRO to really come together and think about a business strategy that ultimately drives growth and profitability.”

Broadening the path to the CEO seat  

A strong relationship between CFOs and CROs — both of which typically report to the CEO — can also help top executives to more smoothly execute on their business strategies, balancing “financial frugality” with a customer-centric approach to growth and revenue, Wolpert said. As such, both CFOs and CROs are becoming more “viable contenders” for the role of the CEO, she said.

In her view, the CRO is in a slightly better position to assume the top executive seat, as those executives have a “comprehensive” view of the businesses’ entire revenue ecosystem and so, they naturally develop “a very deep understanding of how various parts of the organization ultimately work together to achieve [a] common objective,” she said.

Finance chiefs are also emerging as more popular candidates for the CEO chair, however — and for those companies which are examining their CFOs for such a role, it’s important to invest in honing the operational leadership and other key skills of their finance chiefs outside of finance, Wolpert said.

Some companies approach this by crafting “an intentional path for the CFO to step into a chief operating officer role or a divisional CEO role” within the same company, she said, enabling them to develop their operational skills.

“I also think… the most successful CFOs who ultimately become CEOs, not only do they bring the kind of operating chops and experience running other parts of the organization, but they have really cultivated tremendous relationships with the board, with their peer set,” Wolpert said.

Today’s CFOs are facing a growing crop of challenges, from persistent inflation to questions over how to best utilize emerging technologies such as AI.  

While there’s always been pressure associated with the top financial seat, the expanding scope of the role’s responsibilities, plus increased volatility in the business environment, is only compounding those pressures — leading to increased risk of burnout, as well as rising CFO turnover, said Jay Peir, head of strategy and interim CFO for Pigment, a business planning software provider.   

“I think the expanded importance and role of the CFO [to] a strategic partnership coupled with increasing pressure and change driven by volatility are both factors,” Peir said in an interview regarding CFO turnover.

Rising pace of change  

CFO turnover reached a six-year high this year, a trend occurring as the supply of finance talent continues to shrink as more and more experienced financial professionals retire, a recent survey by Russell Reynolds found.

While some of the turnover within the role is due to finance chiefs departing for board positions or to the CEO seat, CFOs are also faced with an expanded to-do list that could contribute to burnout. Today’s finance chiefs play an integral role in developing their companies’ strategies — including responding to shifting market developments, the top external risk on finance chiefs’ minds, according to Pigment’s 2025 Office of the CFO survey.

The evolution of the CFO role has also dovetailed with the accelerating pace of change in the global business environment, Peir said.

Companies had to pivot quickly during the COVID-19 pandemic, and since that point, “we've seen high inflation, supply chain disruption and geopolitical events…and then even this year, it seems as though every week or every day there's news where companies need to make decisions and need to pivot quicker than ever before,” he said. 

Peir has served in his current role at the Paris, France-based company since December 2023, according to his LinkedIn profile. Prior to Pigment, Peir served as EVP, corporate development and strategy for Tableau Software, and logged an eight-year tenure at SunPower Corporation in roles including VP of corporate development and CFO.

Another factor increasing the pressure on finance chiefs is the dual mandate of both improving efficiency and lowering costs. While finance is often asked to identify efficiencies, available technologies have not “evolved at quite the same pace to support the extended scope and needs” of the finance team, Peir said.

Trust, but verify

Bringing in new technology could help CFOs to better tackle their growing list of responsibilities, both enabling more efficiency as well as helping to attract and retain top talent. In the face of an ongoing accountant shortage, employee recruitment and retention within the finance function remains top of mind for finance chiefs. 

According to Pigment’s survey, managers identified “inadequate technologies and tools” as one of the main reasons for attrition inside of their finance teams, with “work-life balance” and compensation emerging as other key factors. Those at the director level or above, meanwhile, pointed to compensation, business performance, and a lack of training or professional development as reasons behind departing finance employees.

One way CFOs could approach the issue of inadequate technology is by paring down the number of tools they use.The finance function, like other areas of businesses, typically taps multiple platforms for their daily operations — one such platform for budgeting or forecasting, another for financial planning and analytics and so on. However, that means “decision making is spread between those [platforms] where there's, many times, a lack of a single source of truth,” Peir said.  

As well as removing redundant or outdated technologies, CFOs could also utilize emerging tools like AI. Though finance chiefs are still interested in AI’s potential applications — with its potential usages for generating insights and automating manual tasks top of mind — the technology still remains on the list of top risks for CFOs, according to Pigment’s survey.

There’s an element of “trust, but verify” when looking at the technology for finance chiefs, Peir said, especially when it comes to ensuring good data governance and security.

“I think it's hard for finance to just receive an answer versus…having the underlying dynamics of the [forecasting] models or the rationale for the answer,” he said.

The impact of new tariffs imposed by President Donald Trump this week will be “widespread,” affecting many products and industries, according to KPMG’s Andrew Siciliano.

Following Trump’s announcement Wednesday of his sweeping new levies on imported goods, on top of his previous tariff actions, Siciliano offered CFO Dive his view on the best ways to minimize the harm. Options include the “first-sale-for-export” tool, he said.

First sale is an approach that allows importers to declare, for U.S. customs purposes, the transaction value of imported goods based on the initial sale from the manufacturer to an intermediary, rather than the final sale price to the importer. The tool has been a duty-savings mainstay for years, but its popularity “has exploded given the dynamic trade landscape,” according to a KPMG report.

Siciliano, U.S. national practice leader in KPMG’s trade and customs practice, shared his views on the newly reshaped tariff outlook in written responses to emailed questions from CFO Dive’s Maura Webber Sadovi. The exchange has been edited for clarity and brevity.

CFO Dive: What are the major changes today from any tariffs/expectations already set?

Andrew Siciliano: On April 2, President Trump announced a wide-ranging list of “reciprocal tariffs” aimed at addressing trade imbalances and promoting U.S. manufacturing. These measures included a baseline 10% tariff on imports from all countries effective April 5. In addition, for certain nations maintaining significant trade surpluses with the U.S., the rates will be higher such as China (34%), the European Union (20%), and Japan (24%) and will be effective April 9. In addition, once the Secretary of Commerce’s notification that adequate systems are in place to collect tariff revenue, President Trump announced he would end duty-free de minimis treatment for China goods on May 2. Lastly, on April 3, a 25% tariff on imported automobiles will be imposed.

CFO Dive: Which industries/products are most affected?  

Andrew Siciliano: Since the tariffs are widespread across many countries, they will impact many products and industries. However, one industry that will be impacted significantly is the textile and apparel industry. Many retailers moved out of China in 2018 once the China 301 tariffs were implemented and moved to counties such as Vietnam (46%), Thailand (36%), India (26%) and Malaysia (24%), which now have high reciprocal tariffs.

CFO Dive: What is the compound/cumulative tariff rate some companies need to calculate and how? 

Andrew Siciliano: To first determine the applicable tariff you need to determine the U.S. Harmonized Tariff Code for the product, the Country of Origin and the Value. Once you have those items you can determine the standard duty rate and then assess whether any additional punitive tariffs apply. The additional punitive tariffs can be country based (such as the reciprocal tariffs), or industry product based (automobiles, steel and aluminum). Each tariff rate will be applied individually against the imported goods’ value. This is known as tariff stacking, which is the cumulative application of multiple tariffs on a single product.

CFO Dive: What mitigation steps have worked to date in the Trump administration era, what hasn't?

Andrew Siciliano: Several duty minimization programs such as valuation unbundling, first sale for export and the use of foreign trade zones, can be used to minimize or defer tariffs. Duty Drawback is another popular tariff recovery program but is not permissible for some of the IEPPA tariffs. (It is unknown whether it is allowed for the reciprocal tariffs). What doesn’t work is bifurcating the price and making two separate payments to a seller — one for the goods and one for intellectual property. That will almost always be dutiable, especially if paid to the seller of the goods.

CFO Dive: Is lobbying/negotiating through trade groups something CFOs need to ask their boards to get involved with?

Andrew Siciliano: Yes, CFOs responsible for the financial health and strategic financial planning on behalf of a company should consult with the board when considering actions that could have a significant impact to the company’s operations, costs and competitive position. It’s important to remember that while we don’t know how short or long-term the tariffs will be, speaking up may be beneficial to certain industries.

CFO Dive: How can CFOs keep a lid on costs companies may be facing from legal and consultant fees as they wade through all the changes? 

Andrew Siciliano: Not taking the ‘wait and see’ approach but starting early. This may mean engaging a third-party provider to help you integrate tariff mitigation planning and technology — that helps with modeling and scenario planning — into your trade strategy early on. This will help position companies in the long run, to not be unprepared or caught off guard for different outcomes, and/or in a position where they’re scrambling to catch up at the last minute.

Editor’s note: CFO Dive’s Alexei Alexis contributed to this report.