Since taking office in January, President Trump and his administration have made weekly and sometimes daily announcements on tariffs, whether for longtime trade partners or geopolitical rivals—most of which have not yet been imposed. Executives are left to wonder: Are these pronouncements a negotiating tactic to drive more favorable results for U.S. businesses and citizens or will they become business realities that companies will have to navigate? How should executives respond to the latest news cycles?
These developments have many of our supply chain clients whipsawing between business-as-usual complacency and panic, often in the span of a few days. For instance, when President Trump announced an additional 25% tariff on imports from Canada and Mexico, we woke up to over a thousand emails and 100 pings from clients and work colleagues, reflecting the shockwaves resonating throughout unprepared C-suites. But the market does not offer much forgiveness when executives are not prepared for what is predictable, even if the threat is short-lived.
Most supply chains rest on carefully considered plans, involving strategically located manufacturing and distribution sites, value chain partners that can circle the globe, and internal functions such as legal and tax. Those plans risk immediate disruption from imposed tariffs, with short-term and possibly long-term ramifications.
With the potential for escalating retaliatory actions by trading partners, companies must navigate an increasingly complex landscape where every decision can have significant financial repercussions. Here are five ways to shake off complacency for resiliency with the benefit of improving your supply chain and organizational alignment.
1. Creating a cross-functional disruption response squad
Many companies lack the foundation for acting decisively in the heat of the moment. It circles back to a perennial problem for organizations: siloed functions. Amid the threat of tariffs, supply chain teams need input from tax, trade, financial teams (including the CFO) and commercial functions. Some of the impacts of tariffs are less visible, such as the link between transfer pricing and customs valuation. And there are sector implications: in life sciences companies, for example, the trade function oftentimes resides in supply chain due to the importance of import licenses and permits, activities that are generally best supported by the “business” and in the supply chain department.
This required collaboration should go far beyond monthly team calls or relationships at the top: it happens at an execution level. It is fostered by developing an appreciation of how supply chain decisions impact the entire organization’s performance and value creation, as well as how imposed tariffs can upset that balance. Then that appreciation, informed by current events, is cascaded into daily working practices.
Forward-thinking organizations are building response squads that provide key business functions a seat at the table, sometimes engaging outside consultants—the best minds across domains who collaborate on specific issues, much like a specialized center of excellence. These squads meet on an ongoing cadence, recognizing that potential disruptions are not one-off events. They examine emerging possibilities in the landscape, discuss them regularly, help evolve the infrastructure for data-driven action and ultimately orchestrate execution. Drawing from simulations and tabletop exercises, the response squad is tasked with strategic thinking today so that actions can begin tomorrow, when warranted.