Trade Tariff Management

📦 Navigating Ongoing Tariffs: Strategies for Resilient Supply Chains The impact of ongoing Section 301 tariffs—particularly those targeting U.S.-China trade—continues to challenge global supply chains, especially in high-complexity industries like MedTech and Pharma. For procurement and operations leaders, the question isn’t if tariffs will affect your cost structure, but how prepared your organization is to respond. Forward-looking companies are adopting a multi-layered approach to mitigate tariff risk: ✅ Geographic diversification – Shifting production and sourcing from China to Vietnam, India, Mexico, or Eastern Europe to reduce tariff exposure. ✅ Tariff engineering – Reclassifying product components or altering designs to fit under lower-duty classifications. ✅ Contract restructuring – Negotiating supplier terms to share or offset tariff-related cost increases. ✅ Nearshoring & FTZs – Leveraging free trade zones, bonded warehouses, and regional production models to defer or avoid duties. ✅ Scenario planning – Embedding tariff impact into total cost models and proactively simulating “what-if” supply scenarios. In today’s climate, tariff mitigation is not a one-time event—it’s a strategic discipline. It demands cross-functional collaboration between sourcing, legal, tax, and logistics teams, paired with agile decision-making and up-to-date market intelligence. 🎯 Whether you're reshaping your supplier footprint or designing a more resilient operating model, it's clear that proactive tariff strategy is a critical lever for cost optimization and risk mitigation. 🔍 Want to learn more? Here are some helpful resources: - USTR Section 301 Updates - PwC Trade Insights - Bloomberg Tariff Tracker Let’s connect—what mitigation strategies are working for your organization?

Contracts are powerful instruments that can help firms navigate the growing uncertainty of global tariffs. In an international trading environment marked by frequent policy shifts, tariff changes can disrupt supply chains, inflate costs, and erode profit margins. Well-crafted contracts allow companies to anticipate these risks and allocate responsibilities in ways that protect operational stability and business continuity: 1). One of the most effective strategies involves specifying the payment of duties and taxes through the USE of internationally recognized INCOTERMS. By clearly defining whether tariffs fall under the responsibility of the seller or the buyer, companies can avoid ambiguity and legal disputes. For example, terms such as Delivered Duty Paid (DDP) place the burden on the seller, while Ex Works (EXW) shifts it to the buyer. This clarity is essential in cross-border trade relationships, where unexpected tariff increases can trigger tension and financial losses. 2). Firms can also EMBED PRICE ADJUSTMENT CLAUSES that allow for contractual prices to shift in response to tariff-related cost increases. These clauses ensure that neither party is disproportionately affected by external economic shocks. If new tariffs raise production or import costs, the agreed price can be renegotiated, preserving the economic intent of the contract. In addition, “change in law” provisions can provide further flexibility. Such clauses allow for contract modifications—or even termination—if new regulations, including tariffs, substantially alter the conditions under which the contract was signed. These mechanisms protect both parties and encourage continued cooperation even amid trade volatility. 3). Another useful feature is the inclusion of hardship or FORCE MAJEURE CLAUSES. While traditional force majeure clauses often cover natural disasters or wars, they may not account for the economic hardship caused by sudden tariffs. Tailoring these clauses to include significant cost increases due to tariffs enables firms to seek relief or renegotiation when fulfilling the contract becomes excessively burdensome. In some cases, this might also lead to the contract’s termination if performance becomes economically unviable. 4). Regular CONTRACT REVIEW is also critical. In a world where tariffs can change with the stroke of a pen, businesses must routinely assess their contractual exposure and ensure terms remain aligned with current trade realities. This includes updating dispute resolution procedures to facilitate quicker, more efficient outcomes if disagreements arise. Firms should also leverage technology, such as contract lifecycle management tools, to monitor obligations, assess tariff impact, and simulate risk scenarios. These systems support informed decision-making and ensure that necessary changes are implemented in a timely manner.

𝗧𝗮𝗿𝗶𝗳𝗳𝘀 𝗮𝗿𝗲 𝗯𝗮𝗰𝗸. 𝗕𝗶𝗼𝘁𝗲𝗰𝗵 𝗶𝘀𝗻’𝘁 𝗿𝗲𝗮𝗱𝘆. The first real trade shock since COVID is hitting, and CDMOs and biotechs are still using playbooks built for stability, not volatility. Tariffs and trade controls are exploding across major economies. Supply chains once optimized for cost are now liabilities. You’re flying blind f your team doesn’t have a geopolitical nerve center. Here’s what I’m seeing from the frontlines: 🧭 𝗚𝗹𝗼𝗯𝗮𝗹 𝘀𝗼𝘂𝗿𝗰𝗶𝗻𝗴 𝗶𝘀 𝗳𝗿𝗮𝗴𝗺𝗲𝗻𝘁𝗶𝗻𝗴: What used to be a question of price is now a question of access and exposure. APIs, consumables, and critical reagents are crossing multiple borders and one policy shift can disrupt an entire production run. 📦 𝗖𝗗𝗠𝗢𝘀 𝗮𝗿𝗲 𝗯𝗲𝗶𝗻𝗴 𝗮𝘀𝗸𝗲𝗱 𝘁𝗼 𝗱𝗼 𝘁𝗵𝗲 𝗶𝗺𝗽𝗼𝘀𝘀𝗶𝗯𝗹𝗲: Absorb upstream tariff costs, accelerate timelines, and maintain pricing. Spoiler: You can’t do all three without strategic trade modeling. 📉 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗮𝗿𝗲 𝘄𝗮𝘁𝗰𝗵𝗶𝗻𝗴: If your biotech isn’t proactively assessing tariff exposure across your suppliers, your CDMO partners, and your revenue markets, you’re not protecting your burn rate, let alone your valuation. So what do the smart operators do? They build trade resilience across three timeframes: 𝗡𝗼𝘄: Fix customs delays, optimize bonded warehousing, and rethink safety stock. 𝗧𝗵𝗶𝘀 𝘆𝗲𝗮𝗿: Engage regulators, clean up HTS code classification, and model cross-border cost impacts. 𝗡𝗲𝘅𝘁 𝗻𝗼𝗿𝗺𝗮𝗹: Rethink your global manufacturing footprint. That low-cost producer may cost you more in volatility than they save you in dollars. This isn’t just a logistics problem...it’s a C-suite, investor, and board-level problem. If your strategy doesn’t account for trade disruption, you don’t have a strategy, you have a spreadsheet that’s about to get blown up.

Tariffs and Tech: Why IT Can’t Ignore Global Trade Policy Tariffs used to be the concern of policy analysts and manufacturing teams. Not anymore. Today, they’re directly hitting IT departments—driving up hardware costs, destabilizing global supply chains, and even influencing the cost of cloud services. Tariffs on semiconductors, servers, and critical IT components are raising procurement costs by up to 45% in some cases. And the ripple effect is real: cloud providers are absorbing increased infrastructure costs—for now—but pass-through pricing is inevitable. The result? Strategic IT planning now requires a new layer of geopolitical and economic awareness. We’re entering a new cycle where IT leaders must think like economists, risk managers, and procurement experts. Tariffs aren’t a footnote—they’re a frontline issue. It’s time we adapt: * Diversify sourcing and vendors * Build supply chain visibility and resilience * Reassess infrastructure and cloud strategy * Plan for tariff scenarios in budget forecasts * Advocate for continued investment in cybersecurity—even when budgets tighten The most resilient IT organizations will treat tariffs not just as a threat—but as a forcing function for smarter, more agile operations. Trade volatility may not be within our control, but how we respond absolutely is. #ITStrategy #Tariffs #CIO #DigitalLeadership #CIOonline

Tariffs Are Reshaping Global Trade, So Now Is The Time to Act As I have been telling clients nonstop for the last several weeks, now is the time for senior management and boards of directors to shift from reactive crisis mode to strategic reinvention. With sweeping new tariffs and threats of retaliation, the risks to cost structures and competitiveness are too significant to ignore. My advice to boards and executive leadership: 1. Quantify exposure. Assess financial impact across product lines, suppliers, and markets. 2. Reimagine your network. “China+1” isn’t enough. Adopt a “Region for Region” model and explore nearshoring thresholds. 3. Leverage regulatory levers. Use Foreign Trade Zones, duty drawback programs, and tariff engineering. 4. Build resilience. Implement cross-functional pricing strategy, scenario planning, and AI-powered modeling. 5. Act at board level. Make supply chain transformation a governance priority—not just a crisis response. This is more than risk mitigation—it’s a chance to build competitive advantage. Treat tariffs as the catalyst to reinvent your supply chain for long-term resilience. #SupplyChainResilience #TariffStrategy #GlobalTrade #ExecutiveLeadership #BoardGovernance #TradePolicy #RiskManagement #DigitalSupplyChain #Nearshoring #CrisisToOpportunity

Tariffs, Trade Wars, and the Future of Procurement The latest U.S. tariffs on China, Mexico, and Canada pose a major risk to industries like automotive, durable goods, and pharmaceuticals. Since NAFTA in 1994, trade has flowed with minimal tariffs, but now, with 40% of U.S. imports and exports tied to these partners (Mexico,Canada, and China) the impact is significant. For example, 80% of the rare earth minerals used in U.S. pharmaceuticals come from China—disruptions here affect more than just business; they impact lives. There are only six real strategies a company can use to manage tariff impact: 1. Find substitutes for tariffed goods. 2. Source from tariff-exempt countries. 3. Offset costs through efficiencies. 4. Share costs with suppliers. 5. Pass costs to customers. 6. Absorb the costs. The ripple effect hits GDP hard, with all areas of the GPD trending down: consumer spending, business investment, government spending, and net exports - they are all declining. During the conversation this morning at Institute for Supply Management Mexico conference there were a couple of suggestions given to building resilience that procurement can lead: • revise contracts (or run a quick bid) to secure fixed pricing and check for hidden tariff costs. • Strengthen business continuity plans to improve supply chain visibility and leadership confidence. • Enhance risk management by mapping supplier and country-specific risks. Staying Ahead of the Regulatory and Sustainability Curve The evolving regulatory landscape, especially around sustainability, adds another layer of complexity. In Mexico, for example, the president’s forward-thinking approach is already mandating organizations to disclose their carbon footprint—acknowledging that the majority of an organization’s carbon footprint stems from its supply chain. This trend is not isolated. Even if sustainability initiatives are slowing down in some parts of the U.S., the rest of the world is moving forward. Leverage Technology and AI: Innovative solutions, like those provided by Kloopify can catapult your organization ahead of these challenges. Use these tools to map your supply chain, identify and assess risks, and continuously monitor supplier performance. In less than 48 hours, you can establish a comprehensive baseline of the environmental impact of your supply chain—pinpointing where your sustainability investments can yield the highest ROI. In today’s interconnected global economy, managing tariffs and regulatory pressures isn’t just about cost management—it’s about strategic foresight. By embracing these comprehensive measures, we can ensure business continuity, protect our industry sectors, and lead the way in responsible, sustainable procurement. #Procurement #SupplyChain #Tariffs #GDP #RiskManagement #BusinessContinuity #Sustainability #AI #GlobalTrade

I have spoken with many CEOs who are looking for practical approaches to navigate the complex landscape of changing tariffs and trade controls. One effective strategy that many leaders are adopting is the establishment of geopolitical nerve centers to stay proactive and informed. These cross-functional teams: - Analyze Tariff Impacts: Utilize tariff scenario and cost modeling, competitive advantage analysis, trade flow analytics, demand modeling, and supplier risk assessment. - Implement a three-horizon strategy: 💠 Horizon 1: Tackle the most significant tariff exposures 💠 Horizon 2:  Focus on cost control, classification management, commercial actions, and stakeholder engagement 💠 Horizon 3: Re-evaluate manufacturing, supply chains, and business portfolios My colleagues Cindy Levy, Shubham Singhal, and Matt W. share how companies can navigate the evolving global trade landscape. Read the latest here: bit.ly/3RiAu9l #TradePolicies #SupplyChain #BusinessStrategy

Remember when trade policy was as predictable as your morning coffee? Those days are over. Now, it's more like a triple espresso—unpredictable and likely to keep you up at night. The new trade reality… In Feb. 2025, President Trump signed executive orders imposing a 25% tariff on imports from Mexico and Canada, and a 10% tariff on Chinese goods. These measures aim to protect domestic industries but have left importers scrambling to adapt. Adding to the chaos, the de minimis exemption, which previously allowed duty-free imports for goods under $800, has been suspended for China and Hong Kong. This means even low-value shipments are now subject to tariffs, disrupting e-commerce and small business operations. So, how can importers navigate this turbulent landscape? ✔️Diversify supply chains: Relying on a single country for sourcing is risky. Exploring alternative suppliers can mitigate the impact of country-specific tariffs. ✔️Leverage trade programs: Utilizing programs like the Customs-Trade Partnership Against Terrorism (C-TPAT) can expedite customs clearance and reduce delays. ✔️Stay informed: Regularly monitoring trade policy updates ensures you're not caught off guard by sudden changes. Tariffs aren’t going away. Neither is the political drama that fuels them. The importers who win aren’t the ones who complain the loudest—they’re the ones who adapt the fastest. Custom Goods ✅ #Tariffs #SupplyChain #CargoMargo

It's not every day you hear "tariffs" and "exciting" in the same breath! But adapting to international trade realities, including tariffs, is essential. Here are some dynamic strategies to thrive in the U.S. market: 🔗 **Diversify Your Supply Chain:** Explore multiple suppliers globally and consider nearshoring or reshoring. 🚀 **Product Innovation & Differentiation:** Create unique products that stand out amid price fluctuations. 📊 **Strategic Pricing & Cost Management:** Analyze tariff impacts on pricing and streamline operations for savings. 🤝 **Leverage Free Trade Agreements (FTAs):** Utilize FTAs to minimize tariff barriers; stay updated on new opportunities. 🌍 **Explore Alternative Markets:** Diversity your customer base beyond the U.S. to reduce tariff risks. 🛠️ **Utilize Customs Brokerage Expertise:** Partner with customs experts for compliance and accuracy in documentation. 💻 **Embrace Technology:** Use supply chain software for visibility; explore e-commerce platforms. 🎤 **Advocate & Communicate:** Engage with industry leaders about supportive policies while keeping customers informed. ♻️ **Flexibility & Adaptability #Tariffs #InternationalTrade #SupplyChainManagement #ProductInnovation #PricingStrategy #FreeTradeAgreements #MarketDiversification #CustomsBrokerage #TechnologyAdoption #IndustryAdvocacy