Navigating trade turbulence: What tariffs are really exposing in Procurement
06/03/2025
- AP Automation (Invoice-to-Pay or I2P)
- Contract Analytics
- Contract Lifecycle Management (CLM)
- Cost Estimation
- e-Procurement
- Governance, Risk, and Compliance (GRC)
- Procure-to-Pay (P2P) or purchase-to-pay
- Source-to-Contract (S2C)
- Source-to-Pay (S2P)
- Sourcing
- Spend Analytics
- Supplier Management
- Supply Chain Collaboration
Watch the webinar about navigating tariffs on June 17 Spend Matters cohosted with Alix Partners.
The US administration’s announcement of reciprocal tariffs in early April sent a jolt through global supply chains. And while a subsequent 90-day pause offered temporary relief, it did little to ease the underlying tension. For many Chief Procurement Officers (CPOs), the real message was clear: Volatility is back, and this time, it demands faster, more coordinated and more data-driven responses.
One CPO, speaking candidly just days after the announcement, described the scramble to avoid cost impact by air freighting multi-million dollar shipments from Vietnam to the US, a dramatic and expensive maneuver executed just ahead of the deadline. Apple also did the same on a massive scale and “chartered cargo flights to ferry 600 tons of iPhones, or as many as 1.5 million, to the United States from India.” In retrospect, this was probably unnecessary, as the US administration announced in mid April that certain categories of goods, such as consumer electronics like computers and components, would be totally exempt from the new tariffs.
Another CPO pointed to the urgent internal push for greater transparency at the supplier-level mapping and for granular understanding of sub-tier suppliers, component origins and even HS-code-level exposure.
These stories illustrate a broader point. Tariffs today are no longer a niche compliance concern; they are a recurring, disruptive force with strategic implications. And they are testing the limits of procurement’s preparedness.
From tactical reactions to structured response
Tariff shocks often trigger a wave of knee-jerk responses. Some are effective in the short term but become costly or unsustainable in the long run. Strategic stockpiling or chartering last-minute air freight are examples. Others turn to last-minute supplier switches or price renegotiations. Tactics may defer impact, but they rarely provide stability.
The more sustainable path lies in structured action planning. As Spend Matters explored in its series on tariff management, a comprehensive response framework typically includes:
- Assessing exposure across your supplier base and bills of materials, down to parts, origin countries and HS codes.
- Evaluating mitigation options, including:
- Advanced purchasing or inventory building to front-run tariffs.
- Supplier diversification across geographies to reduce dependency on high-risk sources.
- Contract rebalancing to shift tariff liability.
- Production relocation or re-routing through trade-compliant intermediaries.
- Building internal alignment across procurement, supply chain, legal and finance to tie sourcing decisions to tariff cost modeling and compliance.
- Remaining agile by embedding reassessment mechanisms. Trade policy evolves quickly, and static strategies become outdated within quarters.
This kind of end-to-end tariff strategy demands visibility, coordination and scenario planning, which are capabilities that traditional procurement tools often lack. That is where technology can help.
Supply chain visibility: The linchpin for tariff management
If there is one lesson from recent disruptions, it is this: you cannot mitigate what you cannot see. The complexity of tariff exposure today extends far beyond first-tier suppliers. Inputs and components can originate from multiple regions, each with different regulatory and tariff implications. And under modern tariff frameworks, even indirect exposure, such as a Chinese-origin sub-component inside a Vietnamese-assembled product, can trigger compliance and cost risks.
This makes visibility the cornerstone of any viable tariff management strategy. It is not just about knowing your suppliers. It is about understanding the full structure of your supply chain, including:
- The full multi-tier supplier map
- The component-level origin and transit paths
- HS code classifications and their changing tariff status, including integration to external intelligence data sources/services
- Points of concentration and dependency that could amplify impact
- Bill of materials structure, tying purchased items to finished goods volumes, revenue, profitability and related data to analyze, plan, prioritize and decide
Many organizations fall short here, especially those still reliant on ERP data, limited SRM systems or generic spend analysis tools, as these tools offer little help. Organizations need something more robust.
Building the case for deep and granular supply chain visibility
SCRM technology platforms have emerged to fill this critical gap. They move beyond supplier information management to offer a real-time, dynamic understanding of the supply network, its vulnerabilities, regulatory exposure and the ripple effects of any change.
Key capabilities of leading SCRM solutions include:
- Sub-tier visibility: Mapping suppliers beyond tier-one, including manufacturers, logistics hubs and critical material sources
- Real-time risk intelligence: Monitoring geopolitical developments, regulatory shifts (like tariffs), natural disasters and financial instability
- Scenario planning tools: Modeling what-if events, such as tariff hikes, and estimating their impact across categories and geographies
- Compliance upport: Including document verification, origin certifications and audit readiness
- Early warning signals: Alerting teams to supplier distress, route disruptions or upcoming policy changes that could affect landed costs
Beyond functionality, the strategic argument for SCRM is clear: In a landscape of permanent disruption, procurement must manage risk like an asset and not as an afterthought. SCRM does not just protect against downside; it enables smarter sourcing, better supplier negotiations and higher resilience.
And when tariff impacts come without warning, SCRM allows companies to move faster by using structured intelligence, i.e., not guessing.
Visibility for tariffs — and beyond
While tariffs have resurfaced as a priority, the underlying capability of granular, real-time visibility they require has broad applications. The same sub-tier transparency needed for trade compliance is also critical to:
- Continuity planning: Identifying alternative suppliers or regions before disruptions hit
- ESG compliance: Tracing carbon emissions, human rights risks and environmental violations down to the source
- Cost transparency: Disaggregating pricing structures to identify where tariff or risk premiums are hiding
This convergence of use cases strengthens the business case for SCRM and advanced supply chain platforms. Procurement leaders are no longer being asked to justify investment on the back of a single risk scenario. Instead, they are building systems that address multiple imperatives and scale across categories and geographies. In short, multi-tier visibility is a force multiplier. It is not about managing one risk category; it is about creating resilient, responsible and adaptable supply chains.
Designing for supply: Designing resilience into products
Yet visibility alone is not enough. Many of the most damaging tariff impacts stem from structural decisions made in the design phase, long before sourcing occurs.
Design for supply (DFS) comes into play here. As defined in Spend Matters four-part series, DFS is a cross-functional discipline that brings procurement and supply chain thinking into the product development process. It ensures that decisions about materials, components and suppliers are made not only for performance and cost but also for resilience, optionality and agility.
DFS connects three domains:
- Supply: Enabling multi-source compatibility, flexible materials and regionalization options
- Demand: Understanding how customer needs vary across regions and what customization is truly necessary
- Product: Designing for modularity, commonality and sourcing agility without sacrificing function or compliance
Crucially, DFS is not just a concept. It is a necessity. As highlighted in research, such as DARPA’s cost lock-in studies, over 80% of a product’s cost is locked in during early design. Once specifications are fixed, it becomes exponentially harder and costlier to react to supply disruptions or tariff shifts.
DFS, therefore, is a form of future-proofing. And when linked to SCRM data and visibility tools, DFS becomes even more powerful. It turns risk data into design input.
However, DFS also requires breaking silos. Procurement, engineering and supply chain must collaborate from the start. Without this, design decisions may bake in fragility, exposing the organization to risks that are expensive or impossible to unwind.
When capabilities converge
Viewed together, SCRM, DFS and tariff response strategies represent more than just a toolkit; they represent a convergence of capabilities that define modern supply chain and procurement performance. These are no longer siloed functions. They are interdependent levers and capabilities that allow organizations to remain agile in a world where risk is constant.
This convergence is also reshaping procurement technology markets. Vendors that previously focused on sourcing or contracts are expanding into supply chain visibility, risk management and even design collaboration. Buyers, for their part, are demanding platforms that connect data, insights and action from the BOM to the PO.
It is not just about tools. It is about alignment between strategy, systems and workflows in an era of compounding disruption.
Tariffs and the threat to digital procurement
There is another twist on the horizon, and it could impact the procurement tech industry itself. So far, the current round of tariffs has largely avoided targeting services. That is not accidental. The US runs a substantial surplus in services trade, especially in digital and cloud-based offerings. But that calculus may be shifting.
Countries or regions like the EU may be considering retaliatory tariffs on services, including software. If implemented, these measures could hit cloud-based providers with new compliance costs, regulatory constraints or cross-border pricing challenges.
Combine this with company-wide pressures like cost-cutting and investment slowdowns, and it is clear: Procurement tech vendors may face a difficult stretch ahead. But those that align with the convergence of SCRM, DFS and tariff preparedness are arguably in the strongest position to weather the storm and grow through it.
Conclusion: The long game starts now
Tariffs may come and go. But the systems, data and processes needed to manage them are now table stakes. Procurement leaders have a choice: Treat tariffs as yet another firefighting exercise, or invest in long-term capabilities that address not just trade risk but the broader nature of modern supply chains and growing geopolitical instability.
The message from the latest CPO conversations is clear: Waiting is not an option. Whether it is an air freight scramble or a late-night policy update, the next wave is already building. Visibility, risk management and design-led agility are not responses. They are the future.
To dive deeper, here is a list of articles and guides that readers will find useful:
- Tariff series
- Risk guide
- Risk coverage (including tariffs)
- Design-for-supply series (part 1 and 2)
Watch the webinar about navigating tariffs Spend Matters cohosted with Alix Partners..
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AP/I2P06/12/2020
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AP/I2P EPRO P2P01/07/2019
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AP/I2P EPRO03/22/2021
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- AP Automation (Invoice-to-Pay or I2P)
- Contract Analytics
- Contract Lifecycle Management (CLM)
- Cost Estimation
- e-Procurement
- Governance, Risk, and Compliance (GRC)
- Procure-to-Pay (P2P) or purchase-to-pay
- Source-to-Contract (S2C)
- Source-to-Pay (S2P)
- Sourcing
- Spend Analytics
- Supplier Management
- Supply Chain Collaboration
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AP/I2P06/12/2020
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AP/I2P EPRO P2P01/07/2019
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AP/I2P EPRO03/22/2021
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