05 Jun Supply Chain Leaders: 6 Tips to Manage Trade, Tariff Uncertainty
Supply chain managers today are learning to handle heightened levels of trade, tariff, and economic uncertainty, whether they like it or not. Fluctuating tariffs have been particularly challenging. Recently, Suzanne Clark, the CEO of the U.S. Chamber of Commerce, aptly commented, “It just gets cloudy because of the tariff uncertainty, like driving through the fog. You have to pull over until you know where you’re going.”1
Of course, even when you feel stuck, you may not have the freedom to wait until the fog clears. Plus, it’s possible trade and tariff precariousness may be the norm for several years to come. Remarkably, the current administration in Washington announced new or revised tariff policies more than 50 times in just the first 12 weeks the president was in office.2
Further, the taxing reality of fickle tariff rates is compounded for US supply chain managers since the nation’s three largest trading partners, Mexico, Canada, and China, have seen the most tariff changes.
As this blog post is being published, the US judicial and executive branches are scuffling over presidential authority to establish tariff rates via the International Emergency Economic Powers Act (IEEPA). Surely, some clarity regarding the IEEPA will soon emerge. However, as FreightWaves CEO Craig Fuller explains, even without the IEEPA, the president still has “two legal, constitutional tools — Section 122 of the Trade Act of 1974 and Section 338 of the Tariff Act of 1930 — to push his trade agenda forward without Congress.”3
Unfortunately, the recent, present, and any future tariff, trade, and geopolitical tensions between the US and many countries can damage the long-term partnerships you have worked so hard to forge with supply chain partners. Alas, these strained relationships can result in slowing down supply chains and increasing your costs.4
Because this is such a difficult environment to be a supply chain leader, our blog post provides you with 6 tips on managing amid the uncertainty. You will discover relevant and actionable insights as you learn what other companies are doing to successfully navigate today’s challenges.
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SUPPLY CHAIN MANAGEMENT TIP #2: KNOW WHAT OTHERS ARE DOING
According to a recent Fortune 500 survey, 61% of CEOs are already expanding and diversifying their supply chain to mitigate risks. 10% plan to redesign their supply chain to localize operations within their headquartered country. Less than 20% of these business leaders expect there to be no cost impact to their supply chain due to tariffs and economic uncertainties.5
Below, we will highlight the strategies many of these companies are currently implementing in these uncertain times. Our hope is you will glean insights from these examples which you can apply to your own supply chains.
Automotive giant Honda is one company exploring how to boost US production for multiple models to mitigate tariff costs. Further, Honda is pumping the brakes on a huge $11B EV supply chain and production investment in Canada. The company will revisit those Canadian plans in two years.6
Nissan is also navigating their course carefully, hoping to reduce by 30% what may be a $3B tariff bill. Wisely, the automaker will prioritize sales of vehicles already assembled in the US. Further, the company is working with a host of supply chain partners in an effort to reduce costs.7
Technology and electronics companies may find it more challenging to boost US production. Reportedly, Apple plans to import more goods from India (iPhones) and Vietnam (iPads). Apple’s plan is to route more Chinese-produced goods to the rest of the world.8 Not surprisingly, the current administration would prefer US production, which is impractical in the near term. So, it will be interesting and perhaps instructive to see how Apple’s leadership navigates these rough waters.
Of note, companies such as Apple and Nvidia are talking up big plans for US production. Earlier this year Apple announced plans for up to $500B in US investments during the next four years, including a huge AI server production facility in Texas.9
Not to be outdone, Nvidia also announced investments of up to $500B to build AI infrastructure and chip-production capabilities to the US in the next four years. The company will partner with manufacturers including TSMC, Foxconn, and Wistron in these investments.
Dell has yet to announce any plans to significantly alter production. The company has reduced or eliminated many product discounts, per sources, which in effect is raising prices on consumer and business laptops and desktops.10
Consumer-packaged-goods giant, Procter & Gamble is maintaining a wait-and-see approach before initiating new supply chain changes. According to the company’s CFO, Andre Schulten, “Supply chain changes require certainty. We don’t want to make short-term sourcing changes or short-term formulation changes unless we know what the environment is we’re dealing with.”
However, one reason the company can sit tight for now is because P&G has invested more than $10B in the past decade to move production closer to consumers. By regionalizing their supply chains over time, the company is far ahead of those who waited until now to do so.11
SUPPLY CHAIN MANAGEMENT TIP #3: BE AGILE
Deloitte collaborated with Fortune to conduct the aforementioned survey of Fortune 500 CEOs. Per Deloitte U.S. CEO Jason Girzadas, “with uncertainty high, being agile and adaptable is a more important skill in leaders than the ability to predict what’s next. Among the top priorities cited by leaders in our survey: supply-chain mobilization, increased investment in AI and a continued focus on managing costs.”12
One example of agility can be seen by the retailer, Target, who is implementing a multi-lever approach to supply chain management in the face of current trade and economic uncertainties. Chief Commercial Officer Rick Gomez explained on a recent earnings call the company is negotiating with vendors to mitigate tariff impacts, reevaluating the retailer’s merchandise mix, changing the country that produces some items, and adjusting the timing of orders.13
Another way in which to be nimble, especially for small-to-medium sized businesses (SMBs), is to monitor updates from the U.S. Chamber of Commerce on their Small Business Tariff Update page.
Because most SMBs could not afford to front-load inventory before tariffs kicked in, and they lack the leverage needed to renegotiate supplier contracts, many are forced to raise prices, suspend operations, or even consider closing down operations.
That’s why the chamber is lobbying for automatic tariff exclusions for small businesses, for essential goods that cannot be produced in the US, and for firms facing economic hardship.14
What else can business leaders do? Well, some importers are using inbound and bonded warehousing options. This service uses a storage facility where shippers can store imported products without immediately paying import taxes and duties. A strategy such as this makes sense for those who believe tariffs on their goods will decline, or for those who simply need to spread out import costs over time.
Finally, several truckload carriers have reported their customers are taking their time before finalizing freight contracts this year. By being cautious, shippers are hoping to determine how tariffs and economic uncertainty will impact their business before making specific obligations.15
SUPPLY CHAIN MANAGEMENT TIP #4: KNOW YOUR COSTS
Knowing your costs is a tip that seems so obvious, you may wonder why we mention it at all. However, as previously mentioned, the current administration has substantially changed tariffs on goods from China, Canada, and Mexico – remarkably, at least a half-dozen times each. Further, the president has reversed himself at least three times on automotive, steel, aluminum, agriculture, and energy tariffs.
Other sectors are left waiting to see how their production lines might be upended. The president has announced, but not yet implemented, tariffs on semiconductors, pharmaceuticals and a range of other critical imports.
The sheer amount of activity is unprecedented and overwhelming, which is why knowing your costs has become a challenge for many supply chain managers.16
A recent article from The New York Times laid out the challenges of knowing your costs. In May, the president reduced reciprocal tariffs on goods made in China from 125% to 10% for 90 days.
However, at that time those reduced tariffs were not nearly as low as many assumed. That’s because the revised tariffs were still layered on top of existing ones. For example, T-shirts and other garments and textile goods from China are subject to a 32% base tariff rate, plus a 7.5% tariff for alleged unfair trade practices (section 301), plus a 20% fentanyl tariff, plus the temporarily reduced 10% reciprocal tariff rate. That adds up to a 69.5% total tariff rate.17 Ouch! Discovering your real-world costs can be a painful experience.
Even after temporarily reducing tariffs with China, the president has unilaterally raised the overall average US tariff rate worldwide from 2.5 percent to 18 percent since taking office. This is the highest level since the Smoot-Hawley tariff rates in the 1930’s. Many economists believe those tariffs deepened and extended the Great Depression.
Yet, the president maintains today’s higher tariffs will be paid for by other countries, will provide an incentive for companies to bring operations onshore, and will help pay for domestic tax cuts.18
SUPPLY CHAIN MANAGEMENT TIP #5: COZY UP TO YOUR CUSTOMS BROKER
Because the supply chain landscape is rapidly evolving due to tariffs and geopolitical concerns. A strong relationship with a customs broker is essential when navigating this fluid environment, according to Radhika Mulastanam, the Director of International Services at AFS.
Mulastanam says, “The relationship is a two-way street, and shippers can do their part by providing as much data as they can – the more the broker knows, the more swiftly and effectively they can act on your behalf.”19
According to a recent piece published by Forbes, the primary job for customs brokers is to help importers identify the proper ten-digit codes for their products out of almost 20,000 choices. Some goods require multiple codes, so compliance can be tricky.
Further, Chapter 99 of the Harmonized Tariff Schedule lists more than 3,400 temporary levies. This “chapter” is nearly 700 pages long and has already been updated about a dozen times in the first half of 2025.
One broker described her current role as a customs broker, an economist, and a therapist, given this year’s trade turmoil.20
SUPPLY CHAIN MANAGEMENT TIP #6: EXPLORE OPPORTUNTIES TO RESHORE & NEARSHORE
If reshoring or nearshoring are included in your supply chain strategic vision, you are not alone. In fact, a recent survey by KPMG of 250 senior U.S. executives found that 69% of U.S.-serving supply chains are expected to be based in the Americas within the next few years.
Of course, moving supply chains closer to home will reduce dependencies on distant markets and can help mitigate geopolitical risks. But they also introduce new challenges like greater competition for suppliers and higher operational costs. 21
Nearshoring and reshoring while also maintaining regional supply chains in other parts of the world also enhances resilience. Diversifying sourcing from multiple regions spreads risk across global supply chains and limits exposure to tariff shocks. As stated in a recent article published by Inbound Logistics, “Resilience is not optional—it’s a core capability for managing today’s supply chain risk in an unstable global landscape.”22
Clorox provides a clear example of a company that has been implementing supply chain resilience practices. Even so, the company is potentially facing up to $100M in tariff costs. So, Clorox is considering sourcing and product formulation changes and is working on mitigation strategies. In a similar manner as P&G, Clorox is already manufacturing many products near where they are sold, per company CFO Luc Bellet.23
To get the most bang for their buck, some companies are positioning their domestic investment plans to fit the president’s “America First” economic platform. Multiple pharmaceutical, high-tech, and automotive companies have grabbed headlines by announcing new investments or by repackaging previous announcements as continuing commitments.24
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Footnotes:
1. Diane Brady, “‘Like driving through the fog’: CEOs discuss how to handle the 90-day pause in the tariff war”. May 14, 2025, as published by Fortune.
2, 16, 18. Jeff Stein, Natalie Allison and David J. Lynch, “White House eased China tariffs after warnings of harm to ‘Trump’s people’“. May 14, 2025, as published by The Washington Post.
3. Craig Fuller, “The courts are unlikely to end the trade war“. May 29, 2025, as published by FreightWaves.
4, 22. Knowledge Center Staff, “Supply Chain Disruptions: How They Happen, Industries Affected, and How to Manage”. April, 2025, as published by Inbound Logistics.
5. Lance Lambert, “The CEOs of Fortune 500 companies are already beginning to plan for the worst“. May 15, 2025, as published by Fortune.
6. Eric Walz, “Honda postpones $11B EV production investment in Canada“. May 9, 2025, as published by Supply Chain Dive.
7. Larry Avila, “Nissan maneuvers to soften $3B hit from tariffs“. May 14, 2025, as published by Supply Chain Dive.
8, 10. Grace Sharkey, “20 company reactions — good and bad — to Trump’s tariff war“. April 30, 2025, as published by FreightWaves.
9. Natalie Sherman, “Apple commits to $500bn US investment“. February 25, 2025, as published by BBC News.
11. Antone Gonsalves, “Tariffs stall P&G supply chain strategy“. May 6, 2025, as published by Supply Chain Dive.
12. Diane Brady, “Fortune’s Spring 2025 CEO Survey shows increasing pessimism”. May 16, 2025, as published by Fortune.
13. Melissa Repko, “Target cuts sales outlook as retailer blames tariff uncertainty and backlash to DEI rollback“. May 21, 2025, as published by CNBC.
14. Nicole Fallon, “Small Business Tariff Update: What to Know Now“. May 2025, as published by the U.S. Chamber of Commerce.
15. Alejandra Carranza, “ArcBest sees 5 ways shippers are reacting to tariffs“. May 14, 2025, as published by Supply Chain Dive.
17. Lazaro Gamio and Ana Swanson, “185% Tariffs: How the Trade War Hit One Shipment of T-Shirts“. May 13, 2025, as published by The New York Times.
19. Radhika Mulastanam, AFS Logistics, “Making Sense of Tariff Uncertainty“. May 8, 2025, as published by Supply & Demand Chain Executive.
20. Adam Levine, “Trump’s Tariffs Turned a Sleepy Industry Into the Front Lines of the Trade War“. May 8, 2025, as published by Barron’s.
21. Gordon Donovan, SAP, “How Supply Chains Can Maintain Resilience in the Era of Nearshoring and Reshoring“. May 5, 2025, as published by Supply & Demand Chain Executive.
23. Antone Gonsalves, “Clorox mulls sourcing changes to offset $100M tariff hit”. May 15, 2025, as published by Supply Chain Dive.
24. Daniel Gilbert, Gerrit De Vynck and Evan Halper, “Companies courting Trump tout old plans as America First investments“. May 4, 2025, as published by The Washington Post.
SSI blog post entitled – Supply Chain Leaders: 6 Tips to Manage Trade, Tariff Uncertainty.