Dive Brief:

• According to a recent BDO survey, nearly half of CFOs plan to enhance their focus on safeguarding company supply chains this year, particularly in light of the Trump administration’s potential implementation of additional tariffs on a wide array of imports.
• Eskander Yavar, national advisory managing principal at BDO, noted that even without the looming tariff threats, supply chain planning remains a significant concern for companies as they look ahead to 2025.
• The survey revealed that 49% of CFOs are looking to integrate a financial perspective into their supply chain strategies this year, adapting to the impacts of ongoing geopolitical tensions, extreme weather events, and labor shortages, among other challenges.

Dive Insight:

President Donald Trump recently indicated his intention to impose 25% tariffs on imports of cars, drugs, and semiconductors as early as April 5. However, he has not specified which countries will be affected by these tariffs.

During a news conference, Trump stated, “It’ll be 25% and higher, and it’ll go very substantially higher over the course of a year. But we want to give them time to come in because, as you know, when they come into the United States and they have their plant or factory here, there is no tariff.”

On February 13, Trump signed an executive order that imposes reciprocal tariffs on all current and prospective trade partners. Additionally, he has enacted a 10% tariff on imports from China and plans to implement a 25% duty on goods from Canada and Mexico.

Yavar noted that CFOs are likely more apprehensive about cost pressures stemming from the new tariffs than they were when BDO conducted its survey in November. Nevertheless, he emphasized that “CFOs remain optimistic about growth overall.”

In fact, 72% of CFOs anticipate an improvement in revenue this year compared to 2024, with 52% expecting higher profitability, according to Yavar’s insights from the survey.

The current earnings season has supported this optimism, with companies within the Standard & Poor’s 500 index reporting results that surpass expectations. According to FactSet, S&P 500 companies have experienced a 16.9% increase in fourth-quarter earnings for 2024, with 77% of companies having reported thus far.

FactSet Senior Earnings Analyst John Butters noted, “If 16.9% is the actual growth rate for the quarter, it will mark the highest year-over-year earnings growth rate reported by the index since Q4 2021.”

Additionally, the BDO survey found that 18% of CFOs expect profitability this year to grow between 10% and 25%, while 34% anticipate gains between 1% and 9%. Interestingly, 38% of the financial executives surveyed expect no change in profitability.