Facing the Tariff Storm
Earlier this month, President Donald Trump unveiled a, much anticipated and yet still shocking, sweeping new tariff policy, introducing a 10% baseline tariff on imports and escalating "reciprocal" tariffs—ranging from 20% to 50%—on countries with significant trade surpluses with the U.S., including China, India, South Korea, and several EU nations. Branded “Liberation Day tariffs,” the policy aims to rebalance trade but has instead thrust supply chains into another era of volatility.
In the years following the first Trump administration, many companies sought to insulate themselves from the risk of future China-focused tariffs by shifting production to countries like Vietnam, Thailand, and Malaysia. This strategic near-China diversification was widely viewed as a buffer against direct economic tension between the U.S. and China. However, the new reciprocal tariffs of 2025 have upended that logic. These countries, despite offering alternative sourcing pathways, have now been swept into the tariff framework—demonstrating that proximity or political neutrality doesn’t guarantee exemption. The takeaway is clear: geographic relocation alone isn’t a shield, and resilience must be built through multi-tiered, multi-regional supply strategies.
Reciprocal tariffs work by penalizing countries that sell more to the U.S. than they buy. On paper, the mechanism may appear logical. In practice, it introduces layers of ambiguity—which goods are included, how surpluses are calculated, and when exceptions will be applied. This policy shift is the epitome of VUCA—volatile, uncertain, complex, and ambiguous—something I’ve written about before. It’s a timely and jarring reminder that geopolitical risk is no longer theoretical; it's operational.
So, what happens now?
For those of us in Supply Chain, this changes the terrain. Tariffs are no longer the occasional policy disruption—they are now a persistent operational variable - this manifests at every level: contract pricing, supplier strategy, transportation modeling, and customer pricing. What was once a stable cost model can now shift overnight. Even when exemptions exist—such as under USMCA (I nearly typed NAFTA, oh how long ago that feels!)—they are riddled with clauses, deadlines, and policy interpretation that introduce friction. In a climate where every container, invoice, and cross-border shipment is a potential exception, consistency becomes an aspiration rather than a baseline.
Trying to come up with mitigating strategies amidst the whiplash is a challenge, but there are a few recommended actions. First, diversify sourcing. The days of single-region dependency are over, whether it’s nearshoring, friendshoring, or reshoring, the supply base needs more geographic range. This is easier said than done - indeed see the second paragraph and many companies that thought Vietnam was an option are now facing an additional 46% in reciprocal tariffs alone.
Second, anchor predictability where possible - secure long-term pricing agreements and holding critical inventory upstream. While not a model for everyone, it shows the value of locking in control where you can. Of course, the challenge comes when everyone does that - a great example would be the sudden constraint on FTZ’s and bonded warehouses. In this case it’s not so much anchoring predictability but gambling on another huge u-turn in direction (I’m thinking February for MX & CA, and then March…) and weathering the storm.
Third, integrate tariff considerations into landed cost models. If your procurement teams are negotiating without visibility into duty exposure, you're likely underestimating your true cost—and setting pricing structures up to fail.
Fnally, communicate. Internally and externally. Tariff clauses, service level expectations, and partnership flexibility should all be part of the conversation. Tariffs are now a customer experience issue, not just a sourcing one. This is a great segue into one of the biggest messages I always promote - Communicate, Collaborate and Commit! Tariffs can no longer sit with legal or procurement alone. They require cross-functional alignment, especially in:
Procurement & Sourcing – tracking origin-based exposure and contract flexibility
Finance & Compliance – modeling cost scenarios and managing HTS reclassification
Planning & Logistics – rerouting flows and buffering risk
Sales & Account Management – translating cost changes into client communication
This is not the time for silos, it is a time for governance, agility, and shared accountability.
Regardless of where one stands politically, supply chain doesn’t get to wait for clarity - a lesson I’ve never stopped being reminded of. While trade leaders and lawmakers debate, the impact is already happening—at the ports where customs officials scramble to update systems, at the borders where documentation gets rechecked, and throughout the supply base as pricing models wobble. Manufacturers, distributors, and consumers will all feel this wave. And it is our job to keep things moving while providing the inputs for business decisions.
No, really, what happens now?
Let’s be honest—anyone who claims to have a concrete answer right now is wrong. There is no fixed formula. Tariffs can be introduced by tweet, renegotiated by press conference, or rescinded without warning. The only constant is uncertainty and that’s why, as supply chain professionals, we don’t chase certainty—we build for resilience. We ride the wave, create optionality and we prepare our teams for change, not just stability.
Amid all this, supply chain’s role has shifted. No longer just a cost lever or fulfillment engine, it’s become a shield—absorbing shocks, preserving service, and enabling business continuity. The organizations that thrive through this tariff turbulence won’t be the ones with the cheapest suppliers or the leanest warehouses. They’ll be the ones who saw volatility coming and built adaptive infrastructure—systems, people, and partnerships prepared for ambiguity.
It disgust me to say this as I thought it had died in 2020, but this is the new normal. Not one to fear—but one to lead through.
Let’s hope the paperwork is correct…
