Getting to grips with tariffs, trade and compliance with Thomson Reuters

While the imposition of import/export tariffs on goods is nothing new, the recent spate of quid pro quo mandates is increasing complexity and uncertainty for organizations trying to navigate their impact on supply chains.

As they look to alternative and possibly untested suppliers — therefore introducing new uncertainties and risk — firms are under pressure to carry out greater due diligence to avoid stepping into agreements with ‘bad actors.’ As this affects trade routes, they also have to navigate delays and increased costs, which in turn affects budgets and revenues. And as tariffs quickly change the regulatory landscape, they also need to keep a firmer grip on their compliance requirements. The many repercussions of tariffs are leading organizations to look more to technology to help them monitor developments, understand the impact on their business and help make the right decisions.

International trade and supply chain experts, offering both service and software, can help minimize exposure to tariffs and therefore risk, help optimize the supply chain and anticipate regulatory impact. There are many niche players in the market that specialize direct tax, corporate tax, statutory reporting or electronic invoicing, but for the purpose of this discussion, Spend Matters senior analyst for downstream procurement Xavier Olivera spoke with one whose portfolio covers compliance more broadly — from invoicing to trade to last-mile reporting:

Thomson Reuters is powered by deep subject-matter intelligence combined with AI-driven tech; it helps companies navigate our fast-evolving world of compliance. Ray Grove, its SVP global head of product, put the current trade and tariffs situation into context for our procurement areas of interest, AP and P2P, and Finance.

“People tend to see tariffs and duties as separate from taxes,” he says. “But they are more closely related than you might think. Like taxes, tariffs are used for both economic and social engineering, basically, they fund governments. But that’s really a secondary purpose. On the one hand you’ve got punitive taxes, like on cigarettes and alcohol, and then zero tax on things like fruits and vegetables. But now we are seeing taxes used in the more political sphere of how economies work across each other. It’s becoming disruptive to trade, and professionals, particularly in the C-suite, are becoming more interested in how these taxes are going to affect business. It’s become more of a talking point than ever before, because the way they react to these changes can have pretty meaningful consequences. It can change where you source your goods, the way you engineer your goods, how you know who you’re procuring from, where your supply chains traverse and what types of duty deferral program you do or don’t set up. It might even effect a decision to no longer play in a particular market.

“The point is, these changes can happen really fast. And they are not just a Procurement or Finance problem, they present a compliance problem. It affects your R&D — should you change the makeup of your materials to avoid certain tariffs? But that type of engineering takes time and coordination and involves downstream suppliers. So tariff changes carry pretty broad implications.”

What that means in practice for businesses

Many organizations do not have complete visibility into their supply chains. Generally, they know who their suppliers are, and during the Covid pandemic, we saw a lot of consolidation, with many suppliers in the same field coming together. This consolidation aimed to make supply chains more resilient. However, the lack of complete visibility and the inability to spot disruptions and manage changes causes some companies to fail. Without awareness of what is happening and without the necessary data to stay informed, companies can’t keep up with all the changes.

“That type of intelligence is related to more than just new tariffs, new duties, new export controls, new transit rules or new classification requirements,” explains Ray. “It’s far more complicated from an application perspective. For example, Thomson Reuters performed over 100 million updates to the content of our applications last year alone, and that was before global trade was the hot topic it is right now. The point is, what makes up that intelligence provision is content, whether that be legal, tax or trade intel. And it’s the curated, proprietary content pulled into our systems that is the secret sauce that helps organizations stay informed.

“The C-suite is currently focused on tariff discussions to understand their impact on business operations and financial performance. As the initial concerns lessen and executives adapt to the new conditions, they are shifting their attention from assessing direct effects to exploring potential opportunities. They aim to leverage the situation for benefit rather than viewing it solely as a risk. Our C-suite now holds regular 7:30 am meetings with tax and trade professionals to strategize on impacts and future actions. But companies in general are also forming ‘tariff committees’ comprising cross-functional teams from trade, supply chain, legal, tax and procurement departments to address the situation collaboratively.

“Firms are starting to see the opportunities in tariff engineering, first sale, free trade agreements, foreign trade zones — the mechanisms that can help protect their trade and even get to a better position than from where they started.”

Remaining compliant through constant change

The many current trade-related updates are directly connected to global trade policies that are evolving to meet the needs of individual countries, including the US. It is important for companies to be aware of and correctly implement these changes to remain compliant and avoid fines, penalties, additional costs and reputational harm.

“Companies need to continuously monitor key areas of trade, such as HS Tariff schedules, terrorist watch lists, sanctions lists, forced labor lists, import and export controls and other government agencies regulating imports,” says Ray. “Failure to comply with or report the most up-to-date information can have major impacts on a company’s ability to operate.

“Many companies have turned to analyzer tools that highlight optimal trade routes based on potential duties, country controls and possible FTA eligibility. These types of analyzer tools allow companies to do scenario planning and identify savings and risks as they evaluate supply chain movements. After analysis of trade lanes have been optimized companies need to evaluate and screen supply chain partners to be sure they are safe and not on any bad actor list. In 2024 alone, we helped customers screen over 1 billion entities against denied party screening lists. Screening of this many supply chain partners would be impossible for companies without automation.”

Because of the complexity involved Thomson Reuters has invested heavily in generative AI. With the amount of robust content it houses it wanted to build capabilities to give customers a better way to interrogate the trade content, providing more predictive insights. “For example,” says Ray, “for HS classification, we built an AI capability that uses machine learning, traditional models of AI and GenAI to help automate the process. It’s a very complicated process that organizations spend an immense amount of time and resources doing. Some outsource it and pay pretty healthy fees for that. By using technology to automate you can remove some of the operational burden so that people can focus on the analytics and engineering problems we talked about to better set up their supply chains.”

Embedding intelligence into P2P and e-invoicing

It’s difficult for organizations to keep on top of all the updates and modifications, and that doesn’t just apply to the large corporations. “What we provide is the intelligence, the workflow and the technology. And we’ve made a lot of investments in APIs to really get them more embedded into the applications that customers are using every day, like procurement applications, retail applications or supply chain applications. And if we look at the trade portion of our portfolio, the larger part is multinationals, because those are the most complex. But you don’t have to be a massive multinational corporation nowadays to have a relatively complicated supply chain. The economy has become very, very global. So even mid-sized organizations and small businesses have to face compliance with their trade obligations. So I see a more frictionless world ahead for managing compliance, with a lot more transparency across all of the transactions across the supply chain and the entire enterprise.”

The acquisition of Pagero, which brought compliant solutions for e-invoicing (ONESOURCE) into the mix, was a great fit for the firm’s Enterprise Compliance Network. Its trade, indirect tax, legal offerings and even third-party screening work together to bring more value and power to the business network.

A single source of compliance

When we look at all that’s happening within trade, the digital sphere, continuous transaction controls, corporate taxes, income taxes, statutory reporting and all the changes around ESG reporting (all of which can be a response to trade obligations), that’s a lot of compliance management that could rely on the use of many and often fragmented systems.

“An enterprise operating through all of these challenges,” says Ray, “needs connectivity to partners, providers, authorities, their own organization and back-office systems. It all has to move fluidly. But you need to retain truth and compliance. So in that, we are breaking the traditional platform view of truth and compliance: we are making it an open business network — that means all the APIs and integrations by working together as one source can augment and add value to companies transacting with each other in the knowledge they are doing so compliantly.”

Rounding out the conversation, our analyst concluded: “Procurement and Finance teams face increasing pressure to navigate evolving trade regulations while ensuring operational efficiency and cost control. Thomson Reuters integrates compliance intelligence directly into procurement and financial systems, allowing organizations to stay ahead of regulatory changes without disrupting their workflows. By leveraging specialized expertise and automation, companies can manage tax implications, tariff shifts and trade compliance more effectively, reducing risk and maintaining supply chain continuity. Partnering with a specialist ensures that procurement and finance leaders can focus on optimizing costs, strengthening supplier relationships and driving strategic decisions while compliance remains seamlessly embedded into their processes.”

Many thanks to Ray Grove and Thomson Reuters for sharing this intelligence with us; for further insight read our mini-series:

• Part 1: What tariffs are and what they mean for procurement (free)
• Part 2: Tariff management and building an action plan (free on Basic registration)
• Part 3: Tech. capabilities for proper tariff management (for Insider members)