President Donald Trump’s announcement that his administration plans to impose tariffs on foreign-imported steel and aluminum threatens to land the United States and its trading partners into a global trade war. That prospect raises serious risks for U.S. companies in several industries that internal audit leaders and risk managers may want to start considering as part of their periodic risk assessments. Already the European Union has related that it is considering taking retaliatory measures against such companies as Levi Strauss & Co., Harley Davidson, and others.
In a trade war, there will be predictable direct and indirect winners and losers. Proactive risk assessments are essential to landing on the right side of the fence, Steven Minsky recently wrote in CFO.com. Enterprise risk programs would have surfaced this risk in January 2017. By identifying areas of potential concern in advance, companies can have contingency plans in place for mitigating risk fallout from a global trade war. Risk management will help navigate your business forward.
