Tariffs didn't just change prices. They changed the map. Here's how to rewire your treasury before the new routes crush your margins.
LONDON / TORONTO — Everyone is talking about tariffs. The 18% on India. The 30–35% on China. The framework deals, the exemptions, the retaliatory measures.
Almost nobody is talking about what actually matters to the person signing the payment orders: the currencies have changed.
When a UK manufacturer moves production from Shenzhen to Ho Chi Minh City, they don't just change a supplier. They swap CNY for VND — a currency with restricted convertibility, thinner liquidity pools, and settlement infrastructure that most Western banks haven't bothered to build. When a US retailer nearshores to Monterrey, their treasury team inherits MXN volatility that their hedging desk has never had to manage at scale.
This is the story nobody is writing. The tariff headlines are about percentages. The real cost is in the currency corridors that companies are now being forced to use — corridors their banks are spectacularly unprepared for.
The New Map: Where the Money Is Actually Moving
The numbers tell a clear story. According to UNCTAD's January 2026 Global Trade Update, nearly two-thirds of global trade now takes place within reconfigured value chains. Firms are diversifying suppliers and relocating production closer to key markets — not because they want to, but because tariff arithmetic has made the old routes uneconomic.
The winners are well-documented: Vietnam, India, Mexico, Malaysia, and increasingly, parts of North Africa and the Middle East. A Deloitte study projected that 40% of US companies would relocate at least part of their supply chains to North America by 2026. Apple has committed to shifting 15–20% of its production to India and Vietnam. GE Appliances invested $150 million in domestic US suppliers.
But here is what the supply chain analysts consistently miss: every rerouted shipment creates a rerouted payment. And rerouted payments flowing through unfamiliar currency corridors are where margins go to die.
The Currency Corridors That Didn't Exist 18 Months Ago
Consider the maths. A mid-market UK importer who previously sourced 70% from China and 30% from India now sources 40% from Vietnam, 30% from India, and 30% from a mix of Malaysia and Mexico.
Their old treasury setup: one GBP/CNY relationship and one GBP/INR line. Straightforward.
Their new reality: GBP/VND (restricted currency, typically requiring USD intermediation), GBP/MYR (liquid but thin outside Asian hours), GBP/MXN (volatile, with spreads that widen dramatically during LatAm political events), and a still-growing GBP/INR book.
Most corporate banks will route every single one of these through the US dollar. GBP → USD → VND. GBP → USD → MYR. GBP → USD → MXN. Each conversion adds 0.3–0.8% in hidden costs. On a £5 million monthly payment run across four corridors, that's £180,000–£480,000 per year in unnecessary double-conversion tax.
That's not a rounding error. That's a headcount.
Why Legacy Banks Can't Keep Up
The structural problem is simple: most corporate banks built their FX infrastructure for a world where 80% of trade flowed through three currency pairs — EUR/USD, GBP/USD, and USD/CNY. That world is over.
KPMG's 2026 Global Trade Outlook is blunt: tariffs have become "a structural cost driver for 2026 and beyond — not a temporary disruption." The Rhodium Group's analysis of US tariff policy confirms that firms face "mixed messages on US trade goals and high uncertainty about long-term tariff levels." In plain English: the rerouting is permanent, but the destination keeps shifting.
This creates a nightmare for legacy banking infrastructure. Building deep liquidity in VND or MYR or COP requires correspondent banking relationships, regulatory approvals, and settlement capabilities that take years to establish. Your bank's FX desk can quote you a rate on Vietnamese Dong. Whether they can settle it efficiently, at scale, and on time — that's an entirely different question.
J.P. Morgan's 2026 Asia Outlook calls Vietnam a "connector economy" — a diplomatic way of saying it's absorbing massive trade flows without the financial infrastructure to match. ING's Asia FX Outlook notes that even the Indian Rupee, a far more established currency, "failed to capitalise on its widening rate differential versus the USD" in 2025 due to persistent uncertainty.
The Settlement Speed Trap
Speed compounds the problem. The MUFG 2026 Asia FX Outlook identifies a critical dynamic: as trade corridors shift towards Southeast Asia, firms are discovering that settlement conventions in these markets don't match the velocity their supply chains demand.
Most VND payments settle T+2 at best. MYR is typically T+1 but can stretch during local holidays. MXN settlement can be same-day domestically but T+1–T+2 for cross-border.
For companies running just-in-time supply chains — which is precisely the companies most aggressively reshoring and nearshoring — the gap between when goods arrive and when payment clears creates working capital drag that erodes the tariff savings they were chasing in the first place.
We have seen companies save 15–25% on landed costs by switching suppliers from China to Vietnam, only to give back 3–5% in FX inefficiency, settlement delays, and hedging costs on an unfamiliar currency. Nobody models that in the procurement business case. But it shows up in the P&L.
The Hedging Vacuum
Here is perhaps the most underappreciated risk: most companies entering new corridors have no hedging strategy for their new currency exposures.
When you import from China, your bank offers you a standard forward contract on USD/CNY. It's liquid, pricing is tight, tenor options are flexible. Now try to get a 6-month forward on GBP/VND. Your bank will either decline, quote you a spread wide enough to park a lorry in, or route it as a Non-Deliverable Forward with settlement risk that your treasury policy doesn't even contemplate.
The Ashmore Group's 2026 Emerging Markets Outlook notes that the US weighted average tariff rose from roughly 2% to nearly 15% — and this "major policy shift led to a re-evaluation of US exceptionalism." The downstream effect: a weaker dollar environment that should theoretically benefit emerging market currencies, but with corridor-specific volatility that punishes companies without active hedging.
UBS's 2026 Year Ahead favours "high-yielding currencies" and expects "risk appetite to broaden in FX markets." That's investor language for: the currencies your supply chain now depends on are going to move more, not less.
The Unicorn Currencies Playbook: 5 Moves Before Q2
- Audit your actual corridor exposure. Most CFOs know their top-line supplier geography. Few know which currencies they're actually settling in, at what conversion rate, and through how many intermediaries. Map every payment from the last 90 days by currency pair, spread paid, and settlement time.
- Kill the double-conversion routes. Direct GBP/INR, GBP/MXN, and USD/VND rails exist through specialist providers. If your bank is routing through USD on every corridor, you're subsidising their laziness with your margin.
- Build corridor-specific hedging. A single "we hedge 50% of FX exposure" policy doesn't work when you have five currency pairs with different volatility profiles. VND requires NDF strategies. MXN requires event-driven hedging around political cycles. INR requires close attention to RBI intervention patterns.
- Match settlement speed to supply chain speed. If your goods arrive in 72 hours but your payment takes 5 days to clear, you're not running a just-in-time supply chain — you're running a just-in-time supply chain with a last-century payments infrastructure.
- Stress-test for the next reroute. The tariff landscape is still shifting. The US-China truce expires. India's framework deal needs Congressional scrutiny. Vietnam faces transshipment tariff risk. Build optionality into your payment infrastructure so the next reroute doesn't require another six months of treasury firefighting.
The Bottom Line
The tariff wave of 2025–2026 has permanently redrawn the global trade map. But for every supply chain leader celebrating their new Vietnam or Mexico or India sourcing strategy, there's a treasury team quietly drowning in unfamiliar currencies, wider spreads, slower settlements, and hedging gaps they don't know how to close.
The companies that win in this new environment won't be the ones with the best procurement strategy. They'll be the ones with a payments infrastructure that can actually keep up with it.
Unicorn Currencies clients: Contact your account manager for a complimentary corridor analysis across your current payment flows.
Not a client yet? Book a 15-minute treasury review — we'll map your exposure and show you exactly where you're leaking margin.
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About the Trade Wire
- What is the Unicorn Currencies Trade Wire?
- The Trade Wire is a daily intelligence briefing from Unicorn Currencies that covers macroeconomic shifts, trade policy changes, supply chain disruptions, and currency movements that directly affect UK importers and exporters. Each signal includes actionable treasury guidance.
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