Newsflash: A trade war is upon us.

With a broad array of stiff new tariffs imposed by the Trump administration, plus the on-again, off-again nature of some of them, economic and geopolitical turmoil has reached a fever pitch. Retaliatory actions and incendiary rhetoric from trading partners have been coming fast and furious as the tensions ratchet upward.

Given this uncertainty, countries are reshaping alliances, and companies worldwide are bracing for economic impact. U.S. businesses are warning that the increased tariff-related costs will mean higher prices for consumers. 

Savvy companies have been keeping a careful eye on shifting events and are realigning sourcing and supply chain strategies. On the technology side, investments in solutions employing artificial intelligence (AI) and blockchain are being prioritized to improve visibility and efficiency. And global trade platforms that utilize advanced analytics help ensure compliance under new tariff schedules while informing sourcing, risk management and hedging decisions.  

Understanding the Impact: Assessing the Ripple Effects of Retaliatory Tariffs

Retaliatory tariffs are reshaping global economics, as countermeasures threaten to reduce market access for American goods. 

Industries heavily reliant on international trade, such as agriculture, automotive, and technology, face especially steep challenges, as overseas buyers turn to new markets. Meanwhile, the inflationary impact arising from price increases threatens to dampen consumer spending and slow down economic growth.

Liz Connell, vice president of product management for the OneSource Global Trade suite of products at Thomson Reuters, says companies are assessing the impacts daily. At a recent customer panel, with representatives from SMBs to Fortune 500 firms, Connell said nearly all have a standing morning meeting with the CEO and CFO to assess the previous day’s events.

“It’s a real challenge,” Connell said. “They’re asking, how much is it going to cost me and what are my risk-mitigation options? Do I move my supply chain? Do I take advantage of things like FTAs and FTZs? What other ways can I protect my bottom line?” 

Among the steps Connell recommends is centralizing trade data management. Integrating ERP, broker manifests and HTS code data into a unified platform that provides real-time insights into trade risks. Staying informed about global trade shifts and retaliatory measures helps organizations stay resilient.

“These steps will help companies minimize financial exposure, maintain compliance, and ensure long-term resilience in a rapidly evolving trade landscape,” Connell said.

The key to resilience lies in proactive planning and building resilience through diversification and flexibility. That means diversifying markets and suppliers, as companies pivot quickly to respond to the disruptions.

Market Diversification: Exploring New Trade Partners

With key trading relationships under strain, businesses are exploring alternative markets to offset potential losses. During the pandemic, countries in Southeast Asia emerged as sourcing havens for many industries seeking to de-risk China, a trend that is only accelerating. 

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has strengthened trade ties between Canada, Japan, Australia and several Pacific Rim nations. This provides U.S. businesses with an incentive to forge new partnerships. 

The U.S.-Mexico-Canada Agreement (USMCA), signed during Trump’s first term, reinforced North American trade relations, making nearshoring to Mexico and Canada a viable alternative. But the future of the trade pact, up for renewal in 2026, appears cloudy, based on Trump’s moves against our northern and southern neighbors. Some observers are even wondering if it will survive this year. 

Companies are leveraging other FTAs, such as the EU-Japan Economic Partnership Agreement and the African Continental Free Trade Area (AfCFTA), to diversify sourcing and export markets. By understanding the duty benefits and regulatory frameworks of these agreements, businesses can strategically realign their supply chains to minimize costs and enhance resilience.

This is where global trade data and content management plays a critical role in reducing duty rates, Connell said. “Research tools within global trade platforms look at HTS codes and automatically calculate duties, taxes and fees,” she said. “If I move between this country and that country, I may be eligible for a free trade agreement. Or if I go between these other two countries, now I’m subject to Section 232 and Section 301 tariffs. It’s a way to understand the impact by moving the supply chain around before I buy anything.”

Supplier Diversification: Reducing Dependency on Single Sources

This isn’t just about shifting to new geographic locations; it’s also about creating redundancy and flexibility. Dual-sourcing strategies, where key components are procured from multiple suppliers in different regions, ensure that disruptions in one country don’t halt production. Companies are also collaborating with contract manufacturers and 3PLs to create more adaptive supply chain models.

Operational Flexibility: Adapting to Rapid Changes

Flexibility requires a combination of strategic planning, supply chain restructuring and financial agility to mitigate risks. One key strategy is leveraging FTZs and bonded warehouses, which allow businesses to defer, reduce or even eliminate certain duties on imported goods. These special programs can help companies delay tariff payments until the products enter the domestic market or avoid them entirely if the goods are re-exported.

Companies are also diversifying shipping routes, increasing the use of multimodal transportation, and finding partners that offer alternative freight solutions.

Peter Ideström, global business area manager for freight applications at Thomson Reuters, says companies can partially offset tariff impacts by implementing technology that automates aspects of cross-border shipping. This includes automating the assignment of preferred carrier and service level at the lowest price. “Another part is track-and-trace, gaining real-time visibility,” Ideström says. “When something is delayed, you can take action and reroute the shipment. Or you can change the service level to speed up delivery to ensure customer satisfaction.” Happy customers tend to stay longer, even if prices go up. By prioritizing the customer experience, companies can reduce the chances of losing customers to competitors. Real-time visibility also highlights tariff exemption periods or increased tariff rates that are time-sensitive, where delays can have a big negative impact on the total cost.

Companies in industries that are heavily reliant on just-in-time (JIT) inventory (automotive, food & beverage, CPG, pharma, etc.) are shifting to a hybrid model that prioritizes safety stock and tariff engineering.

From a financial perspective, hedging strategies are critical. Renegotiating supplier contracts to incorporate tariff contingency clauses is one tactic, as is using currency hedging or bulk-purchase agreements, to lock in favorable pricing. Businesses with a strong financial risk management plan will be better positioned to absorb cost fluctuations while reducing the profit impact.

Leveraging Technology: Enhancing Compliance and Efficiency with Advanced Solutions

In any economy, technology helps ensure trade compliance, data management and product content, supply chain efficiency and cost containment. Mix in the current trade environment, and reliance on technology only increases.

We’ll look briefly at three ways technology is being used to address the challenges posed by global trade disruptions and help companies mitigate the considerable risks.

Automated Tariff Management: Streamlining Compliance

This simplifies customs compliance by centralizing and streamlining trade data classification, tracking and reporting. Consolidating information across ERPs, brokers and global trade systems allows companies to quickly identify tariff impacts across the supply chain based on HTS codes, country of origin, FTAs and regulatory laws.

These platforms provide real-time updates on changes in tariffs, sanctions and duty rates, so companies can proactively analyze costs and explore duty optimization strategies like FTAs and FTZs. Automated import and export management ensures accurate customs declarations, reducing manual processing and compliance risks.

For high-volume shippers, automation enables seamless filings, even for high volume de minimis shipments that were previously exempt from tracking and filing requirements. This will become especially important if the de minimis exemption is eliminated by Trump, and millions of imports valued below $800 are suddenly subject to tariffs. 

Smaller businesses can make the most of trade brokers with access to these platforms for compliance support. By ensuring compliance and optimizing duties, automated tariff management helps companies navigate global trade efficiently while protecting the bottom line.

Data Analytics: Gaining Insights for Informed Decisions

In a global trade platform, data analytics provides critical insights that inform real-time decision-making. By analyzing consolidated data, businesses can quickly assess the financial and operational impact of trade and tariff shifts.

Real-time analytics enable proactive risk mitigation, so companies can optimize trade lanes, leverage duty-saving programs, and ensure compliance with evolving regulations. Automated data validation and reporting reduces errors, streamlines customs filings and improves supply chain agility.

Trade Data Integration: Ensuring Seamless Operations

Trade data can reside in lots of places: an ERP, spreadsheets, a global trade management platform, the broker’s manifest, a company’s parts repository. This is why having a single source of truth is a huge benefit for trade compliance.

Trade data integration streamlines logistics by connecting data across ERP, TMS, customs platforms and supplier networks. By consolidating shipment details, compliance records and financial transactions, businesses can reduce errors, improve visibility and enhance decision-making. Integrated data ensures faster customs clearance, optimized inventory management and greater forecast accuracy. 

A well-integrated trade data system enhances collaboration between shippers, carriers and regulators. This ensures compliance and operational efficiency while reducing costs and improving supply chain performance. 

Diversification, Partnerships, Technology are All Key to Weathering the Trade War

As global trade tensions escalate, companies are diversifying suppliers, leveraging trade agreements, optimizing logistics and investing in technology, in order to maintain supply chain efficiency. The key to resilience lies in flexibility: rethinking sourcing, strengthening partnerships and utilizing automation for compliance and cost management. By staying agile and informed, companies can minimize financial exposure and position themselves for long-term success in an unpredictable trade environment.

Resource Link: https://tax.thomsonreuters.com/en/products/onesource-global-classification