Tariffs usually mean higher costs and frozen cash. Smart operators are flipping the script.
In the fog of 2025’s tariff chaos, most companies see only margin pressure and rising inventory costs. A select few spot something else: a rare chance to boost working capital and customer loyalty in one move. From duty-drawback acceleration to strategic price locks, these firms aren’t just surviving—they’re using tariff volatility to play offense.
Operators unlock hidden cash
Boards and investors are under pressure. With exit markets sluggish and earnings windows unpredictable, stakeholders stay laser-focused on near-term cash generation, while lenders get stingier.
Tariffs, once seen as a drag, are turning into a tactical tool. Operators lead cost-down reviews, rework sourcing strategies, and accelerate duty audits to free up working capital. KKR notes that 90% of its portfolio is insulated from direct tariff shocks—proof that deliberate supply-chain design pays off. The result: more EBITDA, less dependency on external financing, and faster paths to value realization.
CFOs feel the squeeze of tariff uncertainty
Tariffs drain cash at the border. A surprise 25% duty can wipe out free cash flow on an entire shipment, Taulia warns. CFOs respond by replacing static forecasts with dynamic 13-to-52-week cash models.
Many go further—pulling cash back from the government. U.S. Customs data shows duty-drawback claims surging 40% YoY as companies re-audit classifications and speed refunds.
IEEPA tariffs still in force as legal battle continues
A recent Federal Circuit ruling has kept all IEEPA-related tariffs in effect, with oral arguments in the expedited appeal now scheduled for July 31, 2025.
For operators navigating this volatile trade landscape, success hinges on tight cross-functional coordination—across supply chain, finance, operations, and merchandising. Without a unified view of inventory flows, pricing structures, and vendor terms, potential gains remain locked in isolated systems and overlooked opportunities.
Retailers weaponize tariff talk to reinforce price trust
Consumer sentiment remains fragile. Inflation fatigue has retailers walking a pricing tightrope—and tariffs threaten to snap the rope. Target CEO Brian Cornell emphasizes that price hikes are considered a “very last resort” for the company. Instead, Target focuses on diversified sourcing strategies and robust vendor negotiations to manage costs and maintain affordability for consumers.
Home Depot is focusing on assortment rationalization over broad increases, while T-Mobile and Verizon lock in base prices for up to five years—trading inflation fears for lower churn.
Three cash-flow plays in action
Bottom Line
Tariffs are both a risk and a resource. Operators who unlock the cash trapped in duties, re-engineer vendor terms, and sell price certainty to customers aren’t just mitigating pain—they’re out-executing rivals.
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