The recent U.S. election may mark a turning point for the supply chain industry. The economic landscape with proposed tariff shifts and rapidly changing policies is poised for fundamental change. For supply chain professionals—planners, purchasing experts, and operations leaders alike—this is more than just another round of policy adjustments. It’s a call to action to build greater adaptability into supply networks, ensuring resilience in times of rapid change.
Today’s environment is characterized by geopolitical conflicts, rapidly evolving economic policies, and natural disasters. Supply chain leaders are at the crossroads of market trends, workforce shifts, and operational demands. Looming policy changes are on the horizon that are likely to affect global trade, having a supply chain that can stay flexible is essential.
Short-Term Relief Leads to Long-Term Delays
Tariffs remain one of the most immediate and far-reaching areas of policy likely to see significant change. Traditionally, tariffs are imposed as short-term taxes on imported goods and services, intended to drive up U.S.-based production. However, the economic trade-offs are substantial, as historically tariffs lead to persistently higher prices for end customers.
For example, after the 2018 tariff rounds, U.S. firms that purchased imports experienced losses amounting to $51 billion. Current fiscal projections from S&P suggest that a universal tariff ranging from 10% to 20% on all goods entering the U.S., could add up to 1.8 percentage points to U.S. inflation. A recent study from Georgia State University warned that while tariffs might offer temporary protection to certain industries, the long-term effects on the global flow of products are often overlooked. Supply chain professionals need to brace for a period of increased volatility. Several key trends are emerging:
What to Expect in a Shifting Tariff Environment
Rising Operational Costs
A 20% tariff, for instance, could lead to higher costs for imported raw materials and finished goods. Companies that rely on imports from countries targeted by tariffs may be forced to explore alternative sourcing strategies, increase domestic production, or pass costs on to consumers. This means supply chain leaders will need to adjust budgets, optimize procurement strategies, and communicate potential cost impacts throughout the supply network.
Shifting Supplier and Sourcing Complexity
High tariffs—especially those targeting specific countries like China—are prompting businesses to pivot away from traditional sources. Vetting new suppliers, reestablishing production standards, and adjusting logistics operations take time and resources. Moreover, reliance on an untested supply network can introduce risks such as quality concerns, delays, and increased logistical expenses. Post-2018, electronics manufacturers shifted production to Mexico, to avoid hefty tariffs on China. With the announcement of a 25% Mexican tariff, less than a decade later manufacturers now find themselves in the same situation.
Trade Retaliation
Countries facing U.S. tariffs (as we have seen with Canada and Mexico) are likely to retaliate by imposing their own measures. This tit-for-tat dynamic not only disrupts export activities but also adds volatility to global markets. Industries heavily dependent on international demand may find themselves grappling with rapid shifts in inventory and supply chain disruptions.
Continued Inflation
According to the Federal Reserve policymakers remain focused on inflation trends and broader economic conditions rather than external pressures. Recent US trade policies could complicate the case for interest rate cuts. Officials see inflation gradually moving toward the central bank’s target, but ongoing economic uncertainties may factor into future decisions on interest rates.
A Call to Action for Supply Chain Leaders
For supply chain professionals, it is the time to take decisive action when it comes to managing the chaos and uncertainty present in today’s environment. The current economic environment is not just another regulatory hurdle—but a critical moment for global supply chain management. Recent US policy and the continuing era of uncertainty it heralds are forcing companies to reexamine long-standing supply chain practices.
The Old Playbook Is No Longer Enough
Traditional methods simply can’t keep up with the rate of change and the volume of external variables affecting your supply lines. APS (Advanced Planning & Scheduling) solutions were designed for a world where stability was the norm, but in the face of constant volatility and complexity relying on historical data, manual spreadsheets, and reactive planning—are obsolete.
A Period of Transition and Opportunity
Now is the time to invest in digital tools to mitigate the impact of uncertainty so your supply chain can emerge stronger, more agile, and better prepared for what comes next. GAINS with its composable, decision-centric planning platform, seamlessly integrates with your existing systems enabling supply chain leaders to make strategic, tactical, and operational decisions in real time.
The Way Forward
Collaboration with technology partners will be essential in crafting a resilient supply chain that can weather economic storms and capitalize on new opportunities. The stakes are high, but so are the rewards for those who are prepared. Now is the time to turn uncertainty into opportunity, embrace change, refine strategy, and lead your organization confidently into a future where agility and resilience are the hallmarks of success.
Combat Uncertainty with Data-Driven Decision Making
GAINS is committed to helping supply chain professionals navigate turbulent times with a supply network that not only survives but thrives amid change. Replace outdated, static tools with a dynamic, data-driven framework that empowers organizations to anticipate and adapt to disruptions.
- Proactive Vulnerability Identification: GAINS leverages advanced analytics and real-time data to pinpoint weak links in your supply network allowing companies to address potential issues before they escalate into full-blown disruptions.
- Rapid Adaptability: With GAINS, you can swiftly adapt to new policies, tariff shifts, and sourcing challenges. The platform continuously monitors external factors and updates its recommendations, ensuring that your supply chain remains agile and responsive.
- Efficient Disruption Recovery: Unexpected events can derail even the best-laid plans. GAINS is designed to help businesses recover from disruptions quickly without compromising operational efficiency.
- Agile Contingency Planning: In today’s unpredictable market, having a flexible contingency plan is essential. GAINS empowers supply chain professionals to create agile, data-driven plans that can pivot swiftly in response to market fluctuations.
Supply Chain Solutions Built for an Uncertain Future
Built on a composable platform, GAINS integrates seamlessly with existing ERP systems, allowing companies to diversify sourcing, onboard alternative vendors quickly, and optimize inventory and demand planning without a full-scale overhaul. GAINS antifragile design means that each supply chain disruption further refines its decision-making, continually strengthening your network over time. Overall, GAINS not only supports proactive and resilient supply chain strategies but also fosters cross-functional collaboration by providing a single, transparent source of truth—ensuring businesses remain agile, efficient, and competitive even during periods of significant uncertainty.
GAINS: The Future of Decision-Driven Supply Chains
At GAINS, we believe supply chain planning shouldn’t be a fixed process—it should be an adaptive, intelligent ecosystem. We’re revolutionizing supply chain planning with decision-centric composability—a breakthrough approach that integrates strategy, policy, and execution in real-time. While competitors focus on firefighting, GAINS ensures you never need to.
Contact us to learn more on how GAINS can help build your supply network for the future.
