On Tariffs and Turbulence: 3 FX Lessons for Cross-Border Businesses
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Written by Senni Ang
This week saw breakthrough talks between the US and China — a diplomatic move that immediately sent ripples through global markets. As someone who’s worked in FX for over 30 years, this level of volatility, while significant, is no stranger.
However, it served as a sharp reminder of a few simple lessons I’ve learned over time: Markets move on headlines, not just policies. Uncertainty is often more damaging than action. And in FX, the businesses that thrive are the ones that plan ahead.
In this article, I’ll break down three lessons every cross-border business should take to heart, especially in times of trade tension and tariff turbulence.
Lesson 1: Markets React to Message, Not Measure
FX markets are highly sensitive to policy announcements and political rhetoric, often responding before any actual policy implementation. In fact, the threat or delay of a tariff could have a bigger FX impact than the actual implementation.
Looking at April, the U.S. announced sweeping tariffs on imports from multiple countries. The mere announcement led to significant volatility in currency markets with sharp swings in emerging market currencies — not because anything changed materially, but because sentiment shifted on a dime. The IDR, MYR, and THB all saw gains against the USD within days.
Takeaway: Markets price in expectations. If you're a CFO or treasurer waiting for actual tariffs to kick in before reacting, you're likely already too late.
Lesson 2: Volatility is the Real Cost, Even Without New Tariffs
Even if tariffs are paused or cancelled, the policy flip-flopping injects significant uncertainty into the market, increasing FX volatility.
Take the 90-day tariff pause in May 2025; while positioned as a stabilising move, it actually prolonged uncertainty. The USD/IDR rate, for example, swung from 16,400 to 17,100 within a few weeks — not because tariffs changed, but because nobody was sure what would happen next.
Takeaway: Uncertainty fuels FX swings; no news doesn’t mean good news. Even when tariffs are paused or delayed, volatility persists — and that can materially impact your payment costs or revenue forecasts.
Lesson 3: Defense is the Best Offense
In a world where FX markets react faster than trade policy can settle, defense is your best play. Rather than chasing better rates or trying to outguess the market, smart businesses are prioritising predictability — using FX hedging to protect margins, not just maximise gains.
Consider this: an Indonesian importer with a USD 1 million invoice due in April 2025 could have secured a forward rate of 16,298 IDR/USD in early March. But if left unhedged, they would have had to settle at 17,100 IDR/USD just weeks later — a difference of almost 5%. That’s real money lost to currency swings, not tariffs.
Takeaway: In uncertain markets, protection trumps prediction. Forward-thinking businesses don’t try to beat the market — they secure what matters: stable costs, predictable margins, and peace of mind.
Don’t Let Circumstance Impact Your Business
Tariffs may be on or off — but FX volatility doesn’t wait for certainty. In today’s environment, where headlines move markets and delays create just as much risk as decisions, the cost of inaction can be steep.
Waiting for the perfect moment or “official” policy to act may mean you’re already behind. But businesses that take control of their currency exposure — even in uncertain times — stand to protect more than just profit. They preserve stability.
That’s where tools like 4XPro come in. Designed for businesses navigating international payments, 4XPro lets you lock in forward rates across 60+ currency pairs, giving you the power to hedge against volatility and plan with confidence — no matter what the headlines say.
Because in FX, defense isn’t passive — it’s how you stay ahead. Don’t let circumstance run your business. Manage risk before it hits.
Interested to learn how we can support you with FX clarity and certainty?
