Trade, tariff, and interest rate uncertainties are making effective cash management critical, rendering treasury’s role more vital than ever.

Cash management may be the defining treasury priority of 2025, as CFOs reassess their exposure to tariff regimes, interest rate shifts, and geopolitical volatility, placing liquidity firmly at the center of financial strategy.

An uncertain economic outlook that puts GDP growth in doubt across Asia and the Western world, combined with persistently elevated interest rates, has created a complex risk environment, while ongoing supply chain disruptions are prompting changes in cash allocation, liquidity reserves, and hedging practices. In a market where financial conditions can swing week to week, the treasury function itself is enjoying a surge in visibility as its unique insights secure it a seat at the table earlier in the corporate decision-making process.

Cash and liquidity management emerged as the top treasury priority in PwC’s 2025 Global Treasury Survey, which flags the challenges of optimizing banking structures, cash management, and forecasting against a constantly evolving risk landscape. To consolidate flows, improve control, and reduce costs, two-thirds (67%) of treasury teams in organizations with more than $10 billion in annual revenues are investing in in-house banks, 60% in payment factories, and 50% in payments on behalf of (POBO) models.

Strategic Response

Beyond such traditional responses as repatriation and debt reduction, companies are adopting more sophisticated methods of optimizing global liquidity and working capital efficiency. In the current climate, cash preservation is critical, says Manish Kohli, head of Global Payments Solutions at HSBC.

“Treasurers are operating in an environment where the risk to capital and cash is higher than we have typically seen in any scenario outside a widescale war,” he notes, pointing to the opportunity cost of cash in a high interest rate environment. “Treasurers increasingly face questions about whether their cash is working hard enough, driving adoption of structured programs around sophisticated cash pooling.” Clients feel obligated to find financial efficiencies that offset margin compression from tariffs, Kohli adds.

Overall, a cautious approach dominates, says Stacey Pang, of counsel at global law firm Herbert Smith Freehills Kramer.

“There is a general mood of cautiousness and conservatism that’s been significantly influencing debt strategies,” she observes. Corporates are implementing cash management and cash pooling systems to better manage resources across jurisdictions while emphasizing diversification of debt funding sources for cost arbitrage. Pang cites the example of one client tapping a new bond market for foreign currency issuance, swapped into sterling to exploit lower interest rates.

Rising tariffs and ongoing supply chain disruptions are meanwhile prompting changes in cash allocation, liquidity reserves, and hedging practices, particularly in sectors exposed to material and logistics costs.

“It is difficult to plan for the long term based on assumptions and market conditions that are constantly changing,” Pang says, “which perhaps goes some way to explain the conservative approaches we’ve seen.” Treasurers emphasize the role of diversification as key to removing concentration risk and improving their agility as the business faces the prospect of change. “This often means maintaining deeper liquidity reserves to handle unexpected disruptions.”

With typically shorter lead times and smaller inventories, technology and consumer businesses face higher tariff implications than other sectors such as industrial energy and utilities. According to HSBC’s research, 87% of tech, media, and telecom companies are either implementing or planning to implement nearshoring.

Caution And Continuous Monitoring

Amid ongoing tariff turbulence, Marianna Polykrati, group treasurer at Greek seafood giant Avramar, stresses the need for caution and continuous monitoring. The treasury team must collaborate closely with procurement to model import scenarios and adjust forecasts.

“The era of passive cash management is over,” Polykrati says. Although Avramar exports primarily to stable European markets such as France, Italy, and Spain, it also has some exposure to the US.

“Tariffs are currently having a notable impact,” she adds, noting that hedging strategies and buffer levels form an integral part of Avramar’s forecasts, with commodity and foreign exchange hedging insights fully incorporated into working capital planning. Since Avramar sources certain raw materials from the US, tariffs can apply both to exports and imports, increasing complexity.

“Diversifying supply helps mitigate tariffdriven cost increases,” Polykrati says. “We now embed dynamic liquidity planning across all operations and prioritize strong communication with every department. Flexible models cover multiple scenarios, from base cases to conservative and pessimistic outlooks, to reflect today’s reality, where geopolitical issues cause simultaneous downturns globally.” To mitigate risk, her team is looking to hedge approximately 50% of its foreign exchange exposures and apply similar strategies to interest rates by the end of this year.

Given a climate of uncertainty, open internal communication is critical, she stresses. Teams inform each other early of any anticipated changes, enabling timely model updates. API integration with the company’s banks gives Polykrati’s team daily cash balance visibility across all entities. Their proactive, scenario-driven approach favors conservative forecasts, often differing by more than 15% from indirect models at month-end. “Flexibility and ongoing communication are central to our cash management strategy,” she stresses.

Flexibility is a recurring theme across sectors and regions. Faced with fluctuating interest rates and global policy divergence, clients of Lloyds Banking Group are looking to new and innovative methods of optimizing liquidity, says Surath Sengupta, managing director and head of transaction banking products.

“We’re now seeing clients build larger liquidity buffers and increase their focus on geographical cash concentration,” he notes. “Some are reshoring or onshoring supply chains, which has a significant knock-on effect on liquidity. Companies are revisiting their hedging strategies to consider greater flexibility.”

Lloyds is also seeing some hesitance to hedge too far in advance, given potential shifts in currency flows from tariffdriven supply chain changes.

“Our team is supporting clients in using more sophisticated and structured solutions,” Sengupta says, “opening the door to payables and receivables programs that improve working capital efficiency and offer cash flow benefits.” In industries heavily exposed to input and logistics costs, such as manufacturing or automotive, he expects treasurers to layer currency and commodity hedges with supply chain risk insurance.

A New Era

Treasury teams that exhibit strength today often have processes and automation they built during the pandemic to thank, HSBC’s Kohli observes. In tandem, the most resilient industries tend to be those that did the same, embracing the philosophy that a good crisis should never be let go to waste.

Kohli sees the treasurer’s role as evolving from a cash custodian to a strategic enabler of growth, embracing real-time data and predictive analytics.

“It’s really refreshing to also see that treasurers are becoming more interested in new and evolving forms of payments, because they then approach the task with a more profound risk lens,” he says. Treasurers are increasingly taking a global approach, seeking aggregate positions across entire companies rather than regional clusters. The mandate: provide cash visibility worldwide, ensure optimal positioning without excess counterparty or country risk exposure, and build automated tools that both de-risk operations and improve cash availability.

One HSBC client preparing for a major acquisition was forced to rethink its financing strategy when debt costs proved prohibitive. Instead of pursuing traditional borrowing, the treasury team reengineered less conventional but more efficient global cash structures that unlocked sufficient internal funding for the deal.

“These are conversations I would not have expected treasurers to be involved in even four or five years ago,” says Kohli.

These strategic shifts reflect not just operational necessity but a fundamental shift in corporate risk management. As treasurers evolve into strategic architects, the question is how well will their organizations harness this capability.