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No-regret actions for businesses
These “no-regret” actions may help your organization prepare for potential trade policy outcomes related to tariffs imposed on goods imported into the US.
1. Conduct comprehensive impact assessments
Identifying where and how tariffs affect your enterprise is pivotal. “Scenario modeling ensures businesses can move with agility when the policies take effect,” Lynlee Brown, a partner in Ernst & Young LLP's Global Trade practice, says. Tools can reveal hotspots across products and regions. Involving finance, supply chain and tax leaders early aligns cost, compliance and operational goals. “Scotch whisky and tequila – these goods can only be made in their countries of origin. They have no choice but to deal with tariffs head-on,” Hillier says, illustrating how certain items become immediate targets.
2. Diversify supply chains
Broad-based tariffs and rapid policy shifts heighten the need to spread sourcing risk. Moving some production to the US can reduce geopolitical threats but requires careful planning for labor and capital costs. “We run analytics to see what’s imported, plot scenarios and evaluate options,” Hillier says. Many companies adopt a “China Plus One” model – keeping capacity in China for local demand and shifting exports to Southeast Asia or Mexico. “If you leave China, you might face other liabilities,” Scholten says, underscoring the complexities of a major relocation.
3. Optimize customs and trade operations
Customs valuation and duty mitigation help to contain tariff-related expenses. It will depend on the import jurisdiction which options are feasible and permittable. For example, in a series of sales transactions resulting in an import into the US, the “First Sale for Export” principle determines duties on an earlier sales transaction, as opposed to the last transaction. “You can import at the first transaction price, instead of the final one, reducing the duty base,” Scholten says. Aligned transfer pricing strategies can further reduce unintended costs, provided that tax, trade and supply chain teams coordinate closely.
With duty drawback suspended, Free Trade Zones (FTZ) and bonded warehouses become more critical. “We help companies claw back duties retroactively if tariffs are imposed,” Brown says, emphasizing how informed structuring can yield tangible savings. Ongoing awareness of special trade programs also helps avoid overpaying.
4. Enhance cross-functional collaboration
Tariffs can destabilize pricing models, procurement contracts and tax forecasting. “No single team can solve this alone. Trade, tax and supply chain professionals should come together,” Hillier says. Steering committees uniting finance, legal and logistics can respond quickly when duties spike or if trading partners retaliate. “Collaboration across every aspect of the business – tax, trade and operations – is the only way to build true resilience,” Newman says.
Consistent data and valuation standards can reduce audit risk. “Businesses need to think holistically about the impact on their operations, taxes and even their carbon footprint,” Newman says. Support at the executive level enables scenario planning, nearshoring initiatives and digital compliance investments.
In short, collaboration is no longer optional – it’s a competitive differentiator. By establishing steering committees, aligning tax and trade decisions, and ensuring executive engagement, organizations can transform reactive silos into integrated, forward-looking teams. As Scholten puts it: “A multidisciplinary approach is the key to managing risks and uncovering opportunities in this new era of global trade.”
5. Leverage technology and data analytics
Automation and Trade data analytics become indispensable amid sudden tariff escalations and potential EU expansions. “Misclassifying a product’s origin or Harmonized System (HS) code can lead to unnecessary duties,” Scholten says. Pro-active tariff classification management, enabled by technology as well as tools for restricted-party checks prevent customs delays. Predictive modeling that factors in currency fluctuations or political signals offers a proactive stance on possible tariff expansions, allowing leaders to plan alternate suppliers or shipping routes.
6. Monitor policy and regulatory changes
Trade partners often counter swiftly to safeguard their interests. Engaging with industry groups provides early warning of policy adjustments, letting companies renegotiate contracts or reroute supply lines as needed. Riddell says flexible contract clauses – such as cost-sharing for unexpected duties – can preserve profit margins if new levies appear in Washington or elsewhere.