Tariffs as strategy: How to rethink import/export

From the November 2025 edition of Supply Chain Management Review.

November 2025

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For years, global trade policy was framed around the concept of free trade. Global trade barriers slowly dissipated. Favored Nation status opened doors to new markets.

The second term of President Donald Trump has upended that delicate global trade balance. Weighted-average tariff rates in the United States rose significantly in 2025, a reversal of decades of relative stability, and similar shifts have emerged in Europe, South America, and Asia as countries navigate a new global landscape.

Businesses have been faced with how to navigate tariffs that one day may be set at 10%, only to be suddenly raised to 50% the next. Trade uncertainly is creating business uncertainty.

Some, though, see a silver lining, or at least a ray of sunshine, in the unpredictable tariff environment. Jeffrey Haushalter, a partner with Chicago Consulting, tackled the idea that tariffs could provide a strategic edge in a Supply Chain Management Review article earlier this year.

“We have found in our supply chain consulting practice that constraints drive the most meaningful innovations. Tariffs are no different. They force rigor and surface inefficiencies.  Companies that lean into tariffs rather than react gain a competitive edge through smarter supplier networks, reduced risk, and optimized cost structures,” he wrote.

Haushalter mentioned 11 reasons that tariffs could enable smarter procurement and sourcing, including domestic supplier development, geographic diversification, negotiation leverage and as a spark for innovation.

“While perceived as disruptive, arbitrary, and punitive, tariffs function as a forcing mechanism that challenges companies to evolve. Rather than viewing tariffs solely as an external tax, forward-looking procurement and supply chain leaders should see them as catalysts for better decision-making, deeper supplier insight, and long-term resilience,” Haushalter wrote.

From penalty to playbook

Tariffs have traditionally been viewed as an unavoidable tax that companies must either absorb or pass on to end customers. According to McKinsey, though, (“Tariffs on the move? A guide for CEOs for 2025 and beyond”), global executives should treat tariffs like energy prices: variables that can be modeled, monitored, and managed.

This shift in mindset means moving from passive compliance to active strategy, the firm noted. Instead of scrambling to react once tariff levels change, leading organizations are creating networks, contracts, and governance processes that allow them to pivot quickly. Tariff costs become just one input in a broader optimization model that balances price, risk, service, and sustainability.

McKinsey and others suggest companies have leverage to maximize the opportunity.

1. Footprint optionality. Diversify manufacturing footprints by exploring China+1 or “friendshoring” models.
2. Supplier portfolio design. Reconfigure supplier portfolios to numerous jurisdictions with different tariff exposure, creating negotiation leverage as well as geographic diversity.
3. Routing and customs strategy. According to Deloitte, substantial savings can be unlocked by rethinking shipping routes, INCOTERMS, and customs approaches. Tools such as bonded warehouses, foreign trade zones, and HS code audits are increasingly being used along with digital platforms that provide visibility into landed costs.
4. Commercial agility. Build pricing agility by utilizing advanced CPQ (configure-price-quote) tools that can selectively pass through tariff costs and protect margins without losing competitiveness. Harvard Business Review explains that this requires alignment among sales, finance, and supply chain, and clear policy for which costs are absorbed vs. passed on.
5. Governance and decision speed. Boston Consulting Group says that companies that make executive decisions rapidly can outperform those that lag. To that point, McKinsey suggests setting up a “tariff nerve center” made up of a cross-functional team to monitor changes, model scenarios, and make decisions in days rather than months.

Frozen in time

Amid shifting trade policies, the push for reshoring, and rapid technological advancements, companies are grappling with unprecedented levels of uncertainty. In an interview with Supply Chain Management Review earlier this summer, Richard Barnett, chief marketing officer of SupplyFrame, said that despite the uncertainty, businesses can navigate the current landscape, but it requires some additional due diligence.

“Uncertainty is the biggest challenge,” Barnett said. “We need to get to a new level of certainty and that will allow the rules of the game to define what additional actions can be taken.”

This sentiment echoes findings from a survey this spring by the Reshoring Institute, where executives indicated that their capital investments and hiring are mostly frozen until the tariffs and economic outlook stabilize.

Tariffs have become a significant factor influencing supply chain decisions. Barnett noted that companies are conducting daily scenario planning but are hesitant to make substantial moves without clear policy direction. “I can live with 145% tariffs in China. I just need certainty,” he quoted a CFO as saying.

Rosemary Coates, executive director of the Reshoring Institute, said the uncertainty was freezing investments by companies. The Institute surveyed 18 C-level executives in April and found the majority had frozen investment until there was more marketplace clarity.

“Uncertainty in tariffs and geopolitics is creating chaos in global operations, especially in the electronics industry’s imports from China. One executive said that his company was not willing to make a billion-dollar investment in building a new factory in America when everything may change in 3 ½ years when a new president is elected. His company will continue to manufacture overseas or in Mexico,” Coates wrote in a Supply Chain Management Review article announcing the survey findings.

How to respond

Whichever strategy a company pursues during this time, unless there is measurable data to justify the decision, then the choice may just be a guess—an educated guess, perhaps, but a guess nonetheless.

According to McKinsey, companies should begin by baselining their tariff exposure by product code (HS code) and country. Using trade-data systems like the U.S. Automated Commercial Environment or equivalent foreign systems lets firms map their landed costs under current and projected tariff regimes. Once exposure is mapped, firms can build scenario models (or digital twins) to test what happens if they shift sourcing, change routes, or alter suppliers.

In fact, scenario planning has never been more important. Scenario planning is essential in today’s tariff environment because it allows companies to anticipate multiple possible futures and build resilience into supply chains. By modeling “what-if” situations such as new tariff hikes, retaliatory measures, or sudden policy changes, organizations can test sourcing options, cost impacts, and customer outcomes before disruptions occur. This proactive approach ensures leaders aren’t just reacting to tariffs but are ready with flexible, data-driven strategies that preserve competitiveness.

Courtney Rickert McCaffrey, EY’s Global Geostrategic Business Group Insights Leader, joined the Talking Supply Chain podcast to talk about the geopolitical challenges facing supply chains and how they can prepare to navigate an uncertain future.

“A lot of C-suite leaders really want predictability and certainty in the environment they face,” she said. “That’s actually more important … than maybe some of the specifics of what that environment is. Going forward, what we’ve seen is because of that uncertainty, a lot more C-suites and boards are turning to scenario analysis and tabletop exercises and other kinds of strategic foresight methodologies to try to … get their arms around [that uncertainty].

“Scenario planning builds resilience by stress-testing supply chains against multiple futures. Even if tariffs shift unpredictably, companies with playbooks in place can adapt faster and smarter,” Rickert McCaffrey added.

Turning uncertainty into advantage

Tariffs are not going away. Political cycles, geopolitical tensions, and economic nationalism all suggest that trade barriers will remain part of the environment for the next decade. The question is whether companies treat tariffs as an external penalty or as a strategic variable.

As Boston Consulting Group has noted, the true competitive advantage lies in uncertainty management. Firms that sense change early, decide quickly, and act decisively will outperform rivals who remain reactive. In that light, tariffs are not simply costs to minimize, they are catalysts forcing supply chains to become faster, more flexible, and more resilient.

For executives willing to embrace this reframing, tariffs can become not just an obstacle but a source of strength. The companies that thrive will be those that learn to treat tariffs not as expenses but as change drivers.

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