INTHEBLACK September/October 2025 - Magazine - Page 26
“Accountants need to be able to advise
clients on increasingly divergent regulations,
while also anticipating the impact of
geopolitical tensions on tax policy and
outcomes like transfer pricing.”
F E AT U R E
JENNY WONG, CPA AUSTRALIA
Yen Nee Lee, senior country risk analyst at BMI,
the research arm of Fitch Group, estimates that close
to 60 per cent of Singapore’s exports to the US are
currently exempt from the tariffs. She adds that
the indirect impact will be felt through the export
of intermediate goods to countries like China,
such as products required for the assembly
of smartphones.
“These kinds of products are currently exempt from
tariffs, but if that changes, we will see a lower demand
for intermediate goods,” she says. “The other big risk
for Singapore is a slowdown in the global economy.
Nearly 21 per cent of Singapore’s GDP is tied to final
demand in the US and China, so if there’s a slowdown
in both of these major economies we could see
demand for goods and services from Singapore
fall — and that’s quite a big hit for the economy.
“Hong Kong is quite similar in that it’s an open
economy that is very much plugged into the global
supply chain,” adds Lee. “So, the risk for Hong Kong
is a sharp reduction in global trade.”
RISK AND DISRUPTION
CFOs are keeping a closer eye on pricing and growth,
with trade tensions presenting a test to cash-flow
resilience, working capital agility and forecast accuracy.
Vaughan Archer, senior director, analyst in Gartner’s
finance practice, says his team is currently working
with CFOs on a range of risk-mitigation strategies.
“Among some industries there has been a potential
frontloading of demand as consumers have anticipated
tariffs and the potential for higher ticket prices down
the track,” he says. “So, there’s a big risk that demand
may look robust, but that could fall off very quickly.”
Higher prices are not only disruptive for consumers.
Archer says CFOs are also considering the costs of
charging higher prices and coaching their sales teams to
clearly communicate the value proposition to customers.
26 INTHEBLACK Sep/Oct 2025 SPECIAL EDITION
“Our research shows that 41 per cent of [global]
CFOs expect to absorb 49 per cent of the tariff
increase within their own cost base,” says Archer.
“So, the risk for most organisations when it comes
to thinking about their US customer is less about a
10 per cent tariff as it relates to their product, but the
entire impact on the US consumer. There are knock-on
effects in terms of higher price sensitivity, as they’re
potentially paying 10 per cent more on products from
one region and potentially much higher tariffs from
other parts of the world.”
Supply chain disruptions, such as delays in
supplier shipments, acquiring essential materials
and the delivery of necessary supplies, present
another challenge.
“I’m having conversations with CFOs and CEOs
about these kinds of direct impacts every day,” says
Luke Branson, partner, global trade advisory at EY
Australia. “And when I say direct impacts, I mean
things like, ‘What are the tariff rates? How do they
impact my business? Who pays? Is it my customer?
Is it my business? Do we share the cost?’
“While all these considerations are significant, the
concern among CFOs is now moving to the indirect
impact such as the effect on growth, consumption,
inflation and consumer markets,” adds Branson.
“But this also comes with a productivity impact on
the C-suite. There’s ‘brain drain’ from this issue,
because it has taken attention away from other
core strategy and business execution activities
in a pretty substantial way.”
HOW CFOS ARE RESPONDING
Some CFOs in markets like Australia are familiar
with the impact of higher tariffs. In 2020, for example,
China placed higher tariffs on some Australian
products like wine and barley. The last remaining
tariff was lifted in 2024.
