Supply chain strategies and global trade: Tariffs, technology, and uncertainty

Global trade and supply chain management have entered a new era marked by volatility, sweeping regulatory changes, and rapid technological disruption. Protectionist policies and escalating tariffs have added unprecedented complexity, forcing companies to rethink international trade strategies and adopt innovative, technology-driven solutions for resilience.

For brands and manufacturers, the priority is clear: build agile models that can withstand mounting geopolitical and compliance pressures.

The Global Backdrop: Tariffs and Legal Uncertainty

Tariffs remain one of the most unpredictable variables in global trade, driven by international tensions, national security concerns, and executive actions under statutes such as:

• Section 232 – National security investigations impacting imports
• Section 301 – Addressing unfair trade practices
• International Emergency Economic Powers Act (IEEPA) – For the first time, leveraged to impose tariffs on issues ranging from immigration to political activity abroad

The Supreme Court is reviewing the constitutionality of IEEPA tariffs, with a decision expected soon. If overturned, businesses could claim refunds on billions in duties and face a shift toward alternative mechanisms for future trade enforcement, prioritizing the need for proactive tariff mitigation strategies.

The New Supply Chain Calculus

Modern supply chains were built on three assumptions: globalization, predictable trade routes, and stable regulatory frameworks. All three are now in flux due to:

• Isolationist Policies – A pivot from globalization toward regionalization
• Military Conflicts – Disrupting waterways and shipping routes
• Tariff Volatility – Thirty-one revisions to the Harmonized Tariff System in the U.S. through 2025

Brands must rethink their fulfillment models, inventory strategies, and geographic footprint to stay competitive in an increasingly unpredictable environment.

Fulfillment and Inventory Optimization: Getting Closer to the Consumer

Recent changes in Mexico and Canada have reduced the benefits of cross-border fulfillment. As a result, companies are:

• Investing in Multi-Node U.S. Structures – Positioning inventory closer to end consumers to reduce lead times and improve customer experience
• Rightsizing Inventory – Balancing cost efficiency with responsiveness to tariff swings and seasonal peaks
• Leveraging Inventory Placement Programs – Combining centralized shipping with distributed fulfillment to improve responsiveness

For sectors like apparel that manage tens of thousands of product variations, these decisions are critical to maintaining agility amid tariff and de minimis changes.

Demand Disruption: The Rise of New Sales Channels

Technology is redefining demand. Platforms like TikTok Shop and Shopify have empowered smaller brands to scale rapidly, sometimes selling out inventory overnight when content goes viral. In response, major retailers are acquiring these breakout brands, creating sudden surges that strain traditional supply chains.

AI-driven analytics and predictive tools are amplifying this trend, making real-time forecasting and flexible fulfillment increasingly important for brands to keep pace with unpredictable demand spikes.

Tariff Engineering and Cash Flow Optimization

Companies are increasingly turning to legal and financial tactics to reduce duty exposure and preserve liquidity. Tariff engineering, such as redesigning products or using different materials to qualify for lower duty rates, offers a way to minimize costs at the classification level.

Meanwhile, Foreign Trade Zones (FTZs) allow businesses to defer duty payments, improve cash flow, and even conduct manufacturing within trade zones to lower tariff obligations. Together, these approaches help businesses reinvest in growth initiatives rather than locking up capital in tariff payments.

What’s Next? Preparing for the Supreme Court Decision

If IEEPA tariffs are ultimately ruled unconstitutional, companies may pursue refunds based on liquidation status or by joining a suit with the Court of International Trade, potentially reclaiming billions in duties. While the outcome remains uncertain, brands should:

• Audit Tariff Exposure – Identify opportunities for refunds and future mitigation
• Secure FTZ Space – Position inventory advantageously while awaiting legal clarity
• Develop Long-Term Plans – Build networks that can adapt to regulatory shifts for years to come

We Can Help

The era of predictable global trade is over. Success now hinges on agility—leveraging technology, optimizing fulfillment, and engineering financial resilience. Companies that move quickly will be best positioned to weather the storm and emerge as a stronger competitor.

Ready to adapt? Reach out to our Manufacturing and Distribution team to discuss supply chain strategies to prepare for the next disruption.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.