Reciprocal Tariffs: Danger for Asia, Opportunity to Re-direct Capital Flows?
This article is written by HedgeGo The imminent move by the US government to harmonise tariffs on more than 2.5 million imported products represents a massive intervention in the current structure of international trade. The aim is to create a level playing field: If Thailand, for example, imposes a 20% tariff on US imports, US tariffs on Thai products will have to reach the same level. A fair principle – at least on paper. But what does this mean in practical terms for the world’s trade and financial markets? Asia: From Privileged Growth Path to Zone of Uncertainty Many Asian countries have enjoyed an unofficial ‘tariff privilege’ for decades. The developed world, led by the US, accepted sometimes much higher tariffs from their trading partners in order to promote their economic development. This was in the spirit of the global division of labour and helped emerging markets to catch up economically. However, this practice is now being questioned. In many cases, the equalisation of tariff rates means a de facto increase in import duties for Asian products in the US – with noticeable consequences: The first signs are already visible. Canadians are cancelling about 20% of their trips to the US, while Americans are continuing to travel to Canada – a small but symbolic trend. China: Keep Calm, Strengthen Domestic Market While Europe and Canada tend to resist the new US trade doctrine, China is surprisingly calm. Instead of entering a spiral of escalation, the People’s Republic is focusing more on its domestic market. Although it suffers from structural weaknesses such as a struggling property sector and a weak labour market for young people, it still has considerable growth potential. China’s geopolitical positioning is also shrewd: as long as US economic pressure does not directly affect China’s core interests, it will exercise restraint. Strategically, it is taking a long-term view, knowing that the political constellations in the US are volatile. Xi Jinping, on the other hand, is here to stay. At the same time, China is becoming more attractive to international investment capital: technology companies such as Alibaba have made massive gains this year, while Western tech stocks have come under pressure. A comparison with the “Magnificent 7” from the US shows this: The growth dynamic is shifting. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.
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Why Growth-Stage Companies Must Prioritize FX Strategy Before Expanding Internationally
This article is a contribution from our content partner, Deaglo Raising capital is a major milestone for any ambitious company. But when international expansion is the next step, financial leaders often overlook one critical risk—foreign exchange (FX) exposure. In the rush to scale operations, enter new markets, or hire global talent, FX risk can quietly erode profit margins, disrupt financial reporting, and even jeopardize funding rounds. Today’s investors are increasingly attuned to this risk—and they expect CFOs and founders to be too. So, why should growth-stage companies develop a robust FX strategy before raising or deploying capital overseas? Here are five compelling reasons. 1. Currency Volatility Can Damage Your Valuation Let’s say your SaaS company secures a $10M contract in euros, but your valuation and financial reporting are in USD. If the euro depreciates by 10% before that revenue hits your books, you’ve effectively lost $1M in enterprise value. That’s not a hypothetical—it’s a common risk in volatile currency markets. Whether you’re preparing for a Series B raise or eyeing an IPO, investors want revenue consistency. A well-structured FX hedging strategy protects earnings and helps you present a stable, reliable financial outlook. 2. Poor FX Management Signals Weak Financial Controls Investors don’t just assess your growth—they assess how you manage it. Companies operating across multiple currencies without a clear FX policy may raise concerns about operational maturity. Institutional investors are now asking: Having a formal FX policy demonstrates financial discipline, risk awareness, and investor readiness—all critical for securing strategic funding. 3. Hidden FX Costs Can Drain Your Expansion Budget Even basic international transactions—like paying overseas vendors or receiving foreign revenue—carry hidden costs. These include wide FX spreads, wire fees, and inefficient execution practices. Many companies unknowingly lose 0.5% to 3% per transaction, which quickly adds up. Sophisticated companies are now: By identifying and minimizing these costs early, you preserve more of your expansion capital. 4. Passive FX Exposure Limits Strategic Flexibility International growth rarely follows a straight path. You might fast-track a LatAm launch or pursue an acquisition in Southeast Asia. These strategic shifts require speed—and pricing certainty. Without FX hedging, exchange rate volatility can delay or derail deals. A proactive FX strategy allows you to move fast and execute with confidence, helping you convince boards, M&A partners, and investors of your plan’s viability. 5. Why an FX Strategy for Growth-Stage Companies Is Now Non-Negotiable Raising capital from global VCs, corporate venture arms, or family offices? Expect FX-related due diligence. We’ve seen GPs delay capital calls or miscalculate IRR due to poor FX risk management at the portfolio company level. Today, LPs are pressuring fund managers to ensure robust FX controls, and that means startups and scaleups must come prepared with clear policies. Establishing FX governance early not only builds trust—it positions you as a globally scalable business. The Bottom Line: FX Strategy is Investor Strategy FX exposure is a silent risk—but it doesn’t have to be. Companies that treat FX like a core financial pillar are better positioned to win investor confidence, protect growth margins, and scale across borders with less friction. At a time when investors demand both vision and operational excellence, your FX strategy could be the difference between a compelling story and a credible one. Join our Treasury Community Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.