As global trade volatility continues, from tariffs and FX swings to shifting trade corridors, businesses face pressure to rethink how they manage supply chains, working capital and risk. In this environment, banks play a critical role in supporting businesses with the tools to preserve liquidity, gain cash flow visibility and adapt to a fragmented trade landscape. Sriram Muthukrishnan, group head of product management at DBS, outlines how strategic trade and treasury solutions can help corporates remain resilient and forward-looking amid disruption.
A new tariff paradigm: Realigning trade and finance
In early 2025, the United States introduced additional tariffs across a range of imports, raising its weighted-average tariff rate to the highest level in over 100 years. These moves, along with temporary 90-day pauses in enforcement for some partners, have drawn varied reactions – from reciprocal tariffs announced by other governments to fast-tracked negotiations. Meanwhile, several corporate announcements have signalled reassessments in sourcing, manufacturing and supply chain relationships worldwide.
Treasury teams are already dealing with the downstream effects. Businesses are fast-tracking inventory purchases to pre-empt tariff exposure, straining working capital with premature cash outflows. Payment terms with suppliers are adapting, often requiring advance payments due to pricing uncertainty. Currency volatility, amplified by trade policy announcements, continues to challenge financial planning.
Beyond cost implications, the real impact lies in how these dynamics are accelerating structural shifts – particularly in global trade corridors and financing strategies.
From concentration to diversification: The corridor effect
Trade routes are being redefined as businesses respond to shifting geopolitical and economic dynamics. Intra-Asia trade continues to rise against this background, driven by proximity advantages, policy coordination, and regional free trade agreements such as the Regional Comprehensive Economic Partnership, which now spans nearly a third of global GDP. Companies are rethinking supplier networks, shifting production and procurement toward ASEAN economies to mitigate overexposure to any single geography, while others are also exploring new markets to expand their buyer base.
The Middle East-Asia corridor is also strengthening. According to Gulf International Forum, Gulf economies are strategically rebalancing their trade ties toward Asia in response to growing geopolitical complexity.
India’s East Coast Economic Corridor, backed by the Asian Development Bank, is enhancing port-led connectivity with Southeast Asia – integrating Indian suppliers more deeply into regional value chains.
As these corridors take shape, so do new risks: jurisdictional complexity, currency mismatches and evolving buyer-supplier dynamics. Renminbi settlement, for instance, is rising across intra-Asia transactions, helping firms reduce reliance on higher-cost US dollar financing and diversify regional terms.
Navigating uncertainties – emerging stronger
In this volatile environment, businesses are increasingly turning to their banks to manage risk, preserve liquidity and navigate changes to their supply chains and operating models.
Trade finance plays a critical role in helping businesses mitigate risk as they adjust to shifting supply chains. Demand for letters of credit is expected to rise as businesses enter new markets and establish relationships with new buyers and suppliers – leveraging the bank’s credit standing to provide payment assurance.
Agility and execution speed are becoming key differentiators in today’s shifting trade landscape. DBS supports this through its regional footprint and broad client ecosystem.
One example is the MOU DBS has signed with Japan Finance Corporation (JFC) to support Japanese SMEs expanding into Asia. The partnership enables access to key markets like China, India and Singapore through a single banking partner, combining DBS’s regional financing capabilities with JFC’s credit guarantees – helping businesses diversify and grow across the region.
We are also seeing a continued shift away from just-in-time (JIT) models toward more resilient just-in-case (JIC) approaches. Buffer inventory and diversified sourcing have become an operational necessity in response to global shipping delays, geopolitical tensions and now tariff uncertainty.
But JIC is capital-intensive. Larger stockpiles tie up cash and stretch working capital positions. To support this transition, DBS offers structured inventory and off-balance sheet procurement solutions. These allow clients to build inventory while preserving liquidity flexibility – extending cash flows without straining supplier relationships.
Creating business resilience
In today’s complex trade environment, businesses require greater certainty across their supply chains – to anticipate, adapt and recover from disruption while maintaining continuity and competitiveness. To support this, DBS works closely with anchor clients to enable faster access to funding for suppliers, improving cash flow at more favourable rates.
One example is the Supplier Payment Services initiative in Hong Kong with Goldwind International Holdings Limited. The programme provides tailored financing support through a selective funding model, helping suppliers optimise cash conversion cycles and strengthen financial resilience. This initiative reflects DBS’s commitment to advancing supply chain resilience and sustainability in capital-intensive sectors such as renewable energy.
As companies diversify away from concentrated markets to reduce geopolitical risk, we also see increased currency diversification and heightened demand for FX hedging – particularly as volatility spikes in response to trade developments. To help clients preserve margin certainty and maintain supplier confidence – especially in high-friction corridors – DBS offers a suite of integrated FX, trade and cash management capabilities, including trade-FX bundling and currency hedging.
Beyond individual transactions, treasurers are increasingly pre-positioning FX liquidity in critical currencies to improve conversion timing and reduce execution slippage. Through digitised FX booking and payment integration, companies also minimise the latency between rate lock and settlement – preserving value and ensuring more predictable outcomes.
Visibility, control and continuity through robust liquidity and payment infrastructure
As businesses adapt to shifting trade corridors, extended inventory cycles and uncertain buyer timelines, liquidity visibility and payment resilience have become critical. It’s no longer enough to fund trade – treasury teams need the infrastructure to anticipate, control and act with precision.
DBS supports this with real-time visibility tools built to enable agile responses to changing trade realities. Our Liquidity Management dashboard provides a consolidated view of balances, transaction trends, trade and loan utilisation – across DBS and non-DBS accounts. This enables centralised decision-making across entities, currencies and markets.
Clients also benefit from modular, self-service capabilities that support agile liquidity structuring. These include automated consolidation, account rationalisation and pooling solutions to help optimise the benefits from internal funds management and reduce reliance on short-term credit.
As liquidity strategies mature, more corporates are adopting in-house bank models to centralise intercompany flows, reward better-performing units and enable regional treasury centre structures. These set-ups improve yield, reduce administrative costs and offer flexibility in navigating capital and responding to varying regulatory requirements.
DBS’s payment infrastructure complements this with built-in continuity. Its multi-rail, multi-market connectivity, including instant payment systems, supports smooth settlement across corridors. Features such as real-time route optimisation, account pre-validation and transaction tracking help reduce rejection rates, mitigate operational risks and ensure reliable payment execution, even in complex cross-border environments.
Moving forward with precision
As global trade becomes more fragmented and unpredictable, businesses face renewed pressure to adapt – not just operationally, but financially. That means rethinking how trade is funded, how liquidity is mobilised and how risk is absorbed.
Resilience today isn’t about waiting out the disruption. It’s about responding early and with precision – through the right mix of trade, treasury and liquidity infrastructure that enables action across uncertainty.
