As global trade dynamics shift, businesses must rethink long-standing supply chain strategies and explore new financial tools to stay agile. Supply chain finance is emerging as a strategic lever, helping preserve liquidity, and strengthen relationships across the value chain.</em></p> 2025 may well be remembered as the “Year of the tariff.” No matter how final trade negotiations resolve, tariffs are upending long-settled buyer-supplier relationships and prompting the global supply chain to come together in ways not seen since the COVID-19 pandemic.</p> The silver lining? As import/export costs rise and new supply chain relationships form, there’s an ideal opportunity to discuss financing tools and contract terms that can be beneficial for all parties. Offering a supply chain finance programme may alleviate stress and help optimise liquidity for buyers and sellers alike.</p> A resilient supply chain applies learnings from the pandemic</strong></p> U.S.-based manufacturers and their global suppliers are still assessing the impact of new tariffs. Fortunately, the global supply chain remains remarkably healthy. Most companies developed strong playbooks during the pandemic which can now serve as the foundation for new strategies. Post-pandemic, there’s also more awareness and intentionality around sourcing. Companies have used the ensuing years to learn, reduce vulnerabilities, and create a much more resilient supply chain.</p> While country-by-country trade negotiations continue, more companies are taking a proactive approach and thoughtfully calibrating inventory levels. As a result, many end consumers have yet to feel the full impact of higher costs. However, holding raw materials and finished goods for longer periods can quickly erode working capital. Shipping and storage expenses add up; cash flow remains tied up in inventory.</p> Final tariffs may further stress liquidity and margins for buyers and suppliers alike. One potential way for buyers to offset these rising costs is to stretch out payment terms. But, with continued uncertainty, suppliers may be hesitant to extend Days Sales Outstanding (DSO). In stressful economic cycles, suppliers also need to bolster their cash reserves. Yet with elevated interest rates, offering early-pay discounts to key customers can be cost-prohibitive. As supply chain partners renegotiate contracts to address the impact of tariffs, invoice and payment timing will be key points for suppliers and buyers alike.</p> Aim to reduce risk, improve liquidity with supply chain finance</strong></p> Supply chain finance may hold the answer for both sides. These well-established programmes can improve agility and help keep balance sheets healthy. In supply chain finance, a credit-worthy buyer contracts with a bank or other intermediary. The bank quickly settles supplier invoices on the buyer’s behalf—usually in as little as 10 days. This provides quick-turn cash for suppliers. Buyers then reimburse the bank at a later date, enabling them to benefit from extended payment terms, without adding stress to supplier relationships. Suppliers also benefit from access to cash at a potentially lower financing cost that’s based on the buyer’s credit profile and their cost of capital.</p> Efficient technology streamlines invoicing and provides near real-time visibility for everyone involved. Pricing and fees vary by each financial institution on supply chain finance programmes, which is why it’s important to do your research and find the right fit for your company.</p> Look for global reach and high-touch, personal service</strong></p> Supply chain finance is an important long-term strategy to help mitigate risk and create more positive supplier relationships. With tariffs prompting so many to review and renegotiate contracts, it’s an ideal opportunity to add supply chain finance to vendor agreements.</p> </div> The opinions expressed in this blog reflect the personal views of the author and not their organisation, Sibos or Swift.</em></p> ©2025 Wells Fargo Bank, N.A. All rights reserved. Member FDIC Commercial Banking products and services are provided by Wells Fargo Bank, N.A. and its subsidiaries and affiliates. Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company, is not liable or responsible for obligations of its affiliates. Deposits held in non-U.S. branches are not FDIC insured. Products and services require credit approval.</em></p>