Global supply chains will face more catastrophic disruption in 2025, as US tariffs under a second Trump administration have upended international trade. For supply chain and logistics leaders, this means having to navigate sudden policy shifts, escalating costs and new constraints on global sourcing
In response to previous tariffs during Trump’s first administration, global trade adapted by rerouting supply chains, seeking alternative supply and forging new trade partnerships. However, these new policies have introduced fresh uncertainties. Higher tariffs on Chinese goods and potential trade barriers with other key regions will undoubtedly drive up costs and disrupt sourcing strategies.
The need for a supply chain network built for resilience and cost-efficiency has never been more critical. Many leaders will need to reconsider their network structures to minimise vulnerability to the unforeseen, the unavailable and cost spikes. This means evaluating alternative suppliers, route types, modality and all other aspects of the network.
What did we learn from Trump’s previous tariffs?
Over the past decade, tariffs have repeatedly wrought havoc for global supply chains, forcing organisations to rethink how they source, manufacture and distribute goods. In 2018, the Trump administration’s previous tariff policies, particularly those on Chinese imports, triggered significant cascade effects, such as increased costs and emissions, ultimately reshaping global trade.
In response, organisations diversified their suppliers, shifting production to regions like Vietnam, Mexico and India. Meanwhile, others turned to tariff engineering, modifying products to qualify for lower tariff categories.
To mitigate against the impacts of future tariff changes, businesses also previously buffered inventory, stockpiling critical goods ahead of anticipated policy shifts. When cost-saving strategies fell short, many organisations then resorted to passing costs on to their consumers, raising prices to maintain profitability.
Now, with new and reinstated tariffs in 2025, supply chain leaders must analyse previous strategies and recognise why many of these solutions cannot sufficiently tackle today’s challenges.
Why previous tariff strategies won’t suffice in 2025
Today’s supply chains navigate not only tariffs but other major geopolitical instabilities, as well as climate disruptions and stricter ESG regulations. Rising inflation, labour costs and freight rates have also made absorbing tariff costs infeasible.
Consumers demand transparency and sustainability now more than ever before. While moving production to new regions can reduce tariff exposure, it can also increase emissions and costs. Supply chain leaders have so many critical tradeoffs to manage in this increasingly challenging landscape.
One major factor that organisations cannot afford to overlook is customer experience. Previous attempts to offset rising supply chain costs by passing them on to customers will no longer suffice. With ongoing geopolitical conflicts and inflationary pressures, consumer tolerance for price hikes, while already feeling the impact of extended lead times, has reached a new low.
On the contrary, businesses with robust networks that lose minimal value to the unforeseen and minimise the impact felt by the customer will stand to gain significant competitive advantage in these uncertain times.
The antifragile supply chain: a shield against Trump’s Tariffs?
Many leaders find themselves stuck in a cycle of constant firefighting, resorting to last minute decision-making without a full impact assessment. These decisions often increase risk, drive inefficiency and cause value leakage down the line.
As an impending trade war looms, businesses must rethink their previous risk mitigation strategies.
To better manage uncertainty and ensure resilience ahead of disruption, leaders should aim to test strategic initiatives in a virtual environment prior to real-world implementation. This de-risks change and guides the optimal rollout strategy to ensure maximisation of tradeoffs between priority KPIs, before committing time or resources.
Optimising supply chain networks for reduced costs and enhanced resilience
To combat Trump’s 2025 tariffs, investing in an agile, robust and cost-efficient network design will make all the difference. Leveraging the powers of network science, simulation and scenario exploration, we partner closely with our clients to optimise and de-risk strategic network transformation.
Generating thousands of optimised network structures within minutes, our technology enables unconstrained search. This uncovers hidden optimisation opportunities, and reveals optimised structures for cost-efficient, resilient and sustainable networks.
The intuitive visualisations and actionable insights we deliver help leaders to understand the key drivers of high performance. The heuristics and rules of thumb of these optimised networks quickly enhance strategic decision making and overcome assumption-based strategies.
Our groundbreaking network design technology saves our clients hundreds of millions each year, and helps strengthen their networks to ensure high performance and strong customer satisfaction
Take the smarter path to a resilient, cost-efficient supply chain
Trump’s 2025 tariffs don’t have to drain value from your supply chain. See how our technology can help you optimise costs and strengthen your network.
Book a demo today to learn more.
