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On April 15, 2025, experts from AlixPartners’ Sourcing and Procurement, Supply Chain, and Growth teams gathered for a webinar: Navigating the Tariff Uncertainty in the Short, Medium, and Long-Term.

Industry experts shared critical strategies for businesses to navigate the challenges of tariffs, trade disruption, and economic uncertainty. 

Key Takeaways:

1. Establish a Tariff War Room

  • Set up a dedicated team to map tariff exposure and visualize operational and financial impacts. This "war room" should be equipped to make real-time decisions based on dynamic models that quantify tariff exposure by part, supplier, and country.

2. Implement Strategic Responses

  • Duty Engineering: Understand and optimize tariff rules to minimize costs. This includes knowing the first sale rule and leveraging value-added services in low-tariff zones.
  • Supplier and Volume Balancing: Identify and engage with suppliers likely to face challenges and build strategic inventory where necessary.

3. Optimize Working Capital

  • Cash Management: Calculate immediate cash impacts and take steps to avoid running out of cash. This may include demand letters to suppliers and customers.
  • Foreign Trade Zones (FTZs): Defer tariffs by using FTZs, bonded warehouses, or third-party distribution centers.

4. Adjust Pricing Strategies

  • Category Dynamics: Understand how tariffs affect entire categories and adjust pricing accordingly. Communicate clearly with trading partners about price changes.
  • Elasticity and Pricing Power: Assess the expected elasticity for your products and your pricing power in the market. Make informed decisions based on competitor analysis.

5. Prepare for Long-Term Transformations

  • Strategic Sourcing: Use the total landed cost model to make decisions about strategic sourcing and manufacturing footprint optimization.
  • Manufacturing Footprint: Consider relocating production to regions with favorable tariff conditions.

6. Stay Agile and Informed

  • Real-Time Updates: Continuously monitor tariff rates and regulations. Update your models and strategies as new information becomes available.
  • Cross-Functional Coordination: Ensure leadership and cross-functional teams are involved in decision-making processes.

By taking these proactive steps, businesses can better navigate the complexities of tariffs, trade disruption, and economic uncertainty.

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