CFOs adjust quickly to manage volatility

The best finance leaders know that their careers are defined not by the challenges they face, but by how they overcome those challenges.

Grant Thornton’s CFO survey for the second quarter of 2025 shows that while tariff-inspired economic turmoil drove finance leaders’ pessimism to new heights, the 260+ respondents moved quickly to deploy a variety of different strategies to protect their businesses.

Supply chain adjustments were the most common response, but solutions varied by industry. For example, asset managers and construction and real estate respondents were more likely to be implementing technology to reduce costs — and conducting proactive, high-frequency scenario planning.

The situation demanded agile thinking and creative solutions. Our survey was in the field from April 30 through May 9 — shortly before the White House’s announcement of a trade deal with China that would reduce tariffs for 90 days between the two countries after tariffs escalated dramatically over several weeks. The U.S. International Trade Court’s blocking of the April 2 “Liberation Day” tariffs on numerous trading partners threw tariffs into further doubt.

While financial markets have rebounded since their early-April swoon, the court ruling left some tariffs in place — including those on imported autos, auto parts, steel and aluminum. A threatened 50% tariff on the European Union also contributed to the uncertainty surrounding tariffs and the negotiations and litigation creating challenges for business leaders across all industries.

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Grant Thornton CFO Advisory Services National Managing Principal Paul Melville said that while finance leaders welcome a respite from tariffs, the continuing uncertainty leaves CFOs in a precarious position with their business strategy.

“CFOs are relieved that, for example, tariffs on imports from China aren’t 145%, but they certainly can’t put their feet up and relax, as entering an era of unreliability, fast actions may differentiate winners from losers,” Melville said. “Whether it’s a 90-day tariff reprieve or court rulings and appeals, the unpredictability of the economic environment doesn’t help finance leaders with long-term planning.

But the most important takeaway from this survey isn’t the economic troubles, but rather how CFOs are steering their businesses through the volatility.

The interesting thing about how finance leaders have handled tariffs and the current economic environment is the variety of strategies they employed to respond.

There’s no single strategy that a majority of respondents have pursued — the top answer was adjusting supply chains to reduce tariffs’ impact, which 46% said they were undertaking. But many finance leaders have made multiple adjustments:

• 42% are conducting high-frequency proactive scenario planning
• 39% are implementing technology to reduce costs
• 35% raised prices

An asset management firm CFO said they were taking a multi-pronged approach to recession-proof their business.

“I'm diversifying revenue streams, cutting unnecessary expenses, and investing in digital transformation to boost efficiency and agility,” the CFO said. “I'm also prioritizing customer retention, building strong relationships and developing flexible pricing strategies to stay competitive. By being proactive and adaptable, I'm confident my business will weather any economic storm.”

That kind of determination was consistent throughout the survey responses. In addition to a predictable focus on cost cutting, another theme was strong attention to serving customers — and pursuing them. The portion of finance leaders who are increasing sales and marketing expenses jumped 13 percentage points over the previous quarter. In addition, customer acquisition and retention ranked among the top three areas of focus for 51% of finance leaders, up from 38% in Q1.

As Congress works to develop new tax legislation, finance leaders are split fairly evenly in their assessment of the potential effects on their companies — even though the legislation is designed to be business-friendly. While 42% expect the changes to be beneficial, 33% said tax changes would be harm their businesses’ financial position.

The survey was in the field during the early stages of tax bill discussions. Grant Thornton Washington National Tax Office Leader and International Tax Solutions National Managing Principal David Sites said CFOs might be more optimistic about the legislation if polled today. But he added that some businesses might suffer negative consequences from possible limits on state and local tax business deductions for pass-throughs, as well as the potential elimination of clean energy credits.

Business leaders and legislators also are concerned about the effects of the ballooning U.S. debt on the economy.

“Our interest expense has grown to be one of the highest government expenditures,” Sites said. “Anybody who has run a household budget knows that if the interest on your debt is one of your largest expenditures, your financial picture is not very healthy.”

As the legislation is developed in the coming months, Sites recommends that business leaders evaluate the timing of any expenditures that will be affected by changes in rates or tax treatments. Issues to consider include:

• Interest expense limitations
• Research and development costs
• Bonus depreciation
• Clean energy projects
• Foreign-derived intangible income
• Section 899 unfair tax practices provisions
• Base erosion anti-abuse tax rules

International tax issues should receive special scrutiny.

“There may be some onerous tax consequences for foreign companies investing in the United States,” Sites said.

Grant Thornton National Tax Solutions Leader Dana Lance noted that companies will have to carefully weigh the competing effects of potential scenarios as they determine a path forward. “Until we have certainty on the treatment of key items such as the research and capital expenditures, companies will need to weigh their investment decisions carefully,” Lance said.

She added, “The competing pressures of a desire to create incentives for investment in U.S. business operations with the need to raise revenues will certainly be a key element of the ongoing legislative debate — especially if the government's tariff revenue is uncertain.”

Profit expectations might provide the most illuminating look at finance leaders’ expectations for the coming months. The 61% of respondents who expect their net profits to increase over the next 12 months ties a 13-quarter low.

But that means that more than three in five finance leaders still expect profits to rise, despite their pessimism about the U.S. economy and their lack of confidence in meeting supply chain, cost control and growth goals. 

As they adjust their supply chains, engage in rigorous scenario planning, and implement transformative technology, CFOs are finding ways to deliver revenue and profits. They won’t be deterred by difficult economic conditions, and they’re determined to lead the way to growth.

About our survey

Grant Thornton surveyed more than 260 finance leaders from organizations with more than $100 million in revenue from April 30 through May 9. Industry representation was diverse, led by retail (16%), technology/telecommunications (16%), banking (14%), manufacturing (14%) and healthcare (10%).