The hidden burden of tariffs on procurement: Paperwork

Note: this article was written between the reciprocal tariff announcement (last week) and yesterday’s announcement of a 90-day pause. During this pause, most countries and goods now see a 10% tariff increase across the board which, to some extent, simplifies tariff determination against origin and type of goods which, as a consequence, could also simplify paperwork. However, the points mentioned in the article remain valid for after the pause period and also depending on evolutions in the US and in all other countries.

The new tariff structure introduces sweeping changes to how imports are treated, starting with the US shifting away from Most-Favored Nation (MFN) tariff norms in several instances. Under typical MFN rules — a foundational principle of the World Trade Organization — countries are supposed to be granted the same low tariff rates unless there’s a formal trade agreement in place. However, the latest US measures selectively impose higher tariffs on specific countries, such as China and the EU, disrupting the MFN baseline and raising duties well above standard levels.

This means that proving the origin of goods is now more important than ever. Tariff rates increasingly depend on where a product is deemed to have originated — and that designation isn’t always straightforward. Rules of origin (ROO) require clear and accurate documentation to demonstrate how and where a product was manufactured or assembled. Also, ROOs are complex and can be a minefield of compliance issues. Goods that fail to meet origin requirements may lose eligibility for preferential treatment and instead fall under elevated tariff bands or be denied entry altogether.

Further complicating matters, eliminating the de minimis exemption for low-value shipments from China and Hong Kong means that even small parcels now require full customs declarations. This expansion of compliance requirements translates directly into more administrative workload, higher risk of error and potential bottlenecks at US ports.

For those who followed the post-Brexit customs disruption in Europe, the parallels may feel familiar — though the context is different, the operational consequences are a bit similar. In the months following Brexit, companies faced unforeseen delays, increased processing times and unexpected rejections due to incorrect or incomplete paperwork. The US could now see its own version of this administrative drag, especially as enforcement practices evolve unevenly across ports.

That being said, this is not uncharted territory for supply chain leaders. The last several years have brought a steady stream of disruptions — from Brexit to Covid-19 to raw material shortages and geopolitical flare-ups — that have served as stress tests. As a result, many procurement and supply chain teams have built muscle memory around responding swiftly and decisively to regulatory changes. But even so, this latest test is a clear reminder that risks come from all angles, and not all of them can be forecasted.

To help procurement professionals respond effectively, Spend Matters has two complementary resources. The first is a dedicated series on managing tariff shifts, covering compliance strategies, best practices and technology enablers. The second is a broader guide and a series on procurement risk, designed to help teams build resilience amid unpredictable regulatory, economic and geopolitical disruptions. Together, they offer both tactical support and strategic perspective at a time when procurement’s role in managing risk has never been more critical.

Our interview with Thomson Reuters is another useful source for getting to grips with tariffs, trade and compliance.