The Trump administration’s tariff-heavy trade policy is putting a strain on working capital. Those measures soak up cash—an unintended impact of the tariffs that poses a threat to businesses’ financial health. As more money is absorbed by product stockpiles or payments to suppliers, and less is received from customers, companies are left with less available capital or cash to cover their operations and any emergency expenses. U.S. companies could free up nearly 40% of that $3.4 trillion if they ran their businesses more efficiently, Mr. Bailey said. Any new tariffs are expected to bring new complexities to operations and prompt the need for more adjustments, raising the odds that working capital will soak up more cash.

Source: Wall Street Journal June 10, 2019 14:37 UTC