Steering Through the Storm: Liquidity, Tariffs, and Strategic Preparedness in a Shifting Global Economy

How Business Leaders Can Navigate Trade Uncertainty by Unlocking Capital and Building Operational Agility

As global trade dynamics enter a transformative era, uncertainty is rippling across boardrooms, supply chains, and strategic forecasts. Once-stable assumptions about growth, investment, and international cooperation are now clouded by a volatile mix of inflationary pressures, tariff disruptions, and ambiguous policy timelines. The result? A seismic shift in business sentiment across the United States.

In late 2024, the corporate landscape painted a picture of optimism. Surveys indicated that 68% of CFOs expressed confidence in U.S. economic growth for the first half of 2025. Two-thirds felt assured in meeting their own companies’ growth projections, and nearly half cited the upcoming election as a motivator to boost business investments. Fast-forward just four months, and the mood has drastically changed. By early 2025, 82% of CEOs and CFOs at large companies reported heightened stress, with 60% now forecasting stagnant or declining revenues.

This swift reversal signals more than just uncertainty—it underscores the urgency for operational resilience and strategic foresight. While most business leaders anticipate the eventual formation of stable trade policies, the journey to get there is uncertain, asymmetric, and unevenly distributed. In the interim, they must prepare for inflation, hesitant consumer behavior, and further disruptions to supply chains.

Federal Reserve Chairman Jerome Powell recently echoed these concerns, cautioning that despite current strengths, the U.S. economy could still deteriorate. In response, agility and liquidity have become business imperatives. As outlined by EY, leadership teams must reinforce balance sheets, secure access to capital, and engage in comprehensive scenario planning—essential tools in navigating uncharted waters.

Liquidity: The Silent Strain Behind Corporate Stress

One of the most pressing concerns is liquidity. Companies face the dual challenge of waning demand and unpredictable supply shocks, made worse by tightening credit conditions. Banks and financial institutions, wary of economic volatility, are increasingly risk-averse, which means CFOs may find themselves grappling with restricted lending environments.

Yet, within this financial bottleneck lies a critical, often-overlooked solution: the latent capital tied up in insurance collateral.

Many large corporations utilize high-deductible (loss-sensitive) insurance policies for various coverages—workers’ compensation, general liability, commercial auto, and professional liability. These programs require collateral, often in the form of letters of credit (LCs), which are issued by banks and count against a company’s credit facility. This drains usable capital, locking away billions in potential investment and operational funding. It’s a hidden constraint that can significantly hamper agility.

Until recently, this collateral trap had no clear remedy.

A New Financial Innovation: Insurance Collateral Funding

Enter the 1970 Group’s Insurance Collateral Funding—a transformative financing tool designed to unburden corporate balance sheets. This solution transfers the collateral requirement off a company’s balance sheet, restoring full access to its credit line.

Through partnerships with banks, the 1970 Group arranges for replacement letters of credit to be issued on the company’s behalf. These are not tied to the business’s own credit facilities, unlocking previously constrained capital and enabling a more responsive approach to market conditions.

What makes this solution particularly compelling is its off-balance sheet structure. It does not alter leverage ratios, making it a cost-effective and minimally invasive alternative to issuing new debt or tapping public markets. Insurance Collateral Funding is adaptable, scalable, and independent of insurance policy renewal cycles—giving businesses full control over their timing and needs. Whether replacing LCs, surety bonds, or escrowed cash, the program provides financial flexibility when it’s needed most.

Capital Reclaimed, Strategy Reimagined

In an economic environment marked by stress and unpredictability, freeing up dormant capital can make the difference between stagnation and strategic acceleration. The ability to reallocate locked funds toward innovation, expansion, or simply navigating turbulent times grants companies a unique competitive edge.

For business leaders navigating the global trade reset, a deep and timely reassessment of liquidity is not optional—it’s essential. Recognizing the collateral constraints embedded in insurance programs and leveraging solutions like Insurance Collateral Funding offers an immediate opportunity to recover agility and resilience.

As trade uncertainty continues to reshape global business, companies that can fluidly manage their capital and pivot with confidence will lead the next chapter of growth—not just survive it.