When duty rates increase on imported materials, the immediate effect is higher cash outflows on purchase orders that were committed at lower cost assumptions. Inventory pre-buying to get ahead of anticipated tariff increases ties up working capital that was allocated elsewhere. Supplier renegotiations triggered by sourcing shifts extend payment timelines. Each of these effects hits the cash position before it shows up in financial reporting.
- https://www.intwo.cloud/news-blog/working-capital-stress-test-managing-cash-flow-when-tariffs-keep-changing/
- anvi
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Working capital stress test: Managing cash flow when tariffs keep changing.
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Working capital stress test: Managing cash flow when tariffs keep changing.