Treasurers Remain Calm Amid Trade Tensions, Rate Hikes

Corporate treasurers say they remain fairly unconcerned about global trade tensions and incoming interest rate hikes, and have not changed their payments practices as a result of these issues, according to a new survey from Dun & Bradstreet.

D&B published its report on Tuesday (Nov. 13) after surveying finance professionals who attended the Association for Financial Professionals’ 2018 Treasury & Finance Conference held last week, according to a press release. Sixty-five percent of the 158 professionals surveyed said they are not seeing any impact in their relationship with Chinese suppliers as a result of trade tensions with the U.S.

Only 5 percent of the remaining professionals who are seeing challenges from trade tensions said they have changed their payment practices as a result.

On a broader scale, just 13 percent of professionals said international trade agreements and tariffs are having the greatest impact on their operations. One-third of survey respondents said the 2018 tax reforms have had the greatest impact, making the issue the most influential on finance operations.

Federal interest rate hikes were cited as the second most influential (chosen by 22 percent of survey respondents), yet more than one-third said interest rate increases will not impact their cash management practices. Holding more cash on balance sheets and decreasing credit utilization are the two most common strategies for the finance executives who said they do expect to adjust their cash management strategies in response to continued interest rate increases.

While the survey suggests that treasurers and finance professionals may remain confident despite geopolitical and economic changes, Dun & Bradstreet Global Head of Trade Credit Eric Dowdell said that these professionals may want to prepare.

“If inflation continues to rise as anticipated, businesses not considering the impact on cash reserves and credit availability could face a chain reaction impacting their ability to pay bills on time, and ultimately this would impact their credit rating and access to further capital,” he said in a statement.