Tariffs turn supply chain finance from niche tool to core capability

If 2025 is remembered as the “Year of the Tariff,” it will be less because tariffs themselves were new and more because of how abruptly they forced companies to confront long-standing assumptions about cost, risk, and liquidity across their supply chains.

“Supply chain disruptions are not new,” says Kiley Kunkler, executive director of global receivables and trade finance at Wells Fargo. “The majority of companies we talk to were somewhat blindsided by tariffs but already had these playbooks in mind on how to deal with disruptions.”

What surprised many, she adds, was the speed and scale at which tariffs moved from a planning scenario to an operational reality. That reality has put supply chain finance, long viewed as a tactical tool, squarely into the strategic spotlight.

Tariffs accelerate structural change

Tariffs have not arrived in isolation. They are colliding with years of post-pandemic supply chain redesign, from reshoring and nearshoring initiatives to efforts to shorten lead times and reduce exposure to geopolitical risk.

“Companies are having to remain agile, and this past year we saw companies implementing real tactical solutions—onshoring, reshoring, and retooling where suppliers and manufacturers are based or moving manufacturing closer to where they are actually selling,” Kunkler tells Supply Chain Management Review.

Those changes come at a cost, though. Shifting production locations, qualifying new suppliers, holding additional inventory, and reconfiguring logistics networks all consume working capital. In many cases, the financial strain shows up first not at the buying organization, but deeper in the supplier base.

“Anytime you are creating change in the supply chain, there is a liquidity constraint somewhere,” Kunkler says. “There is a cost to doing all of this.”

Supply chain finance moves from optional to essential

Against that backdrop, Wells Fargo has seen a marked increase in demand for supply chain finance programs, particularly from companies that had never previously considered them.

“In 2025 we saw an increase in requests for supply chain financing programs because companies are becoming more aware of who their suppliers are, how they can support those suppliers, and how they might share in potential tariff increases,” Kunkler explains. “Who is going to eat what [cost]; that’s a real conversation now.”

At its core, supply chain finance allows buyers to extend payment terms while enabling suppliers to access cash earlier, often at a lower cost than traditional borrowing. But the motivation today is less about squeezing working capital and more about preserving resilience.

“We are seeing supply chain finance come to the rescue,” Kunkler says. “Companies are now forced to start thinking broader, and going back to agility, I think you need liquidity to be agile.”

Margin pressure changes the conversation

Tariffs have also shifted how buyers and suppliers talk about margin. Rather than unilateral demands for price concessions or longer terms, negotiations increasingly center on shared burden and shared risk.

“There is talk about margin,” Kunkler says. “How are we going to split the cost of tariffs, and how is that going to impact my margin? Those are negotiations with suppliers.”

That dynamic has influenced how companies deploy financing tools. Traditional supply chain finance programs often focused on extending payment terms, from 60 days to 90 days, for example. Today, some buyers are taking a different approach.

“We are seeing customers become interested in more of an early payer discount model where they use their own capital to make payments early to get a discount,” Kunkler notes. In an environment where interest rates remain elevated, even as they ease, those discounts can meaningfully offset tariff-related cost increases.

Relationships, not risk

One concern sometimes raised about supply chain finance is whether it shifts risk onto suppliers. Kunkler argues the opposite is true when programs are structured correctly.

“I see this as being nothing but positive,” she says. “When we onboard a supplier, we don’t look at their risk profile, we look at the buyer. The program is meant to be a win-win for everyone involved.”

That distinction matters, particularly for smaller or more vulnerable suppliers that may be less able to absorb tariff shocks or extended payment cycles. By anchoring financing to the buyer’s creditworthiness, supply chain finance can stabilize relationships that might otherwise fray under cost pressure.

Education starts with visibility

For companies still evaluating whether supply chain finance makes sense, Kunkler emphasizes that the first step is not selecting a financial product, it’s understanding the supply chain itself.

“What it really comes down to is digging into the supply chain, and that’s where a bank will help,” she says. That process includes analyzing the supplier base, running checks, and having what she calls “tactical conversations” with procurement teams.

“We put a dollar amount around it and assess whether that is enough to implement the program,” Kunkler explains. “And you can’t get those numbers without analyzing whether the supplier base is a good candidate.”

Critically, supply chain finance works best as part of a broader strategy, not a one-off fix. “It’s really a broad-based program run in conjunction with a broader terms initiative,” she says.

Looking ahead to 2026

Despite the uncertainty surrounding global trade policy, Kunkler expects interest in supply chain finance to remain strong.

“I expect we are going to see a lot of interest still. I don’t see this ending,” she says. “Access to liquidity is going to be a factor for the foreseeable future.”

As tariffs, geopolitical risk, and structural supply chain shifts converge, financing is no longer just a treasury function, it’s becoming a core enabler of agility. For companies navigating 2026 planning cycles, resilience requires liquidity, and liquidity increasingly requires collaboration across the supply chain.

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