Organizations need to master global trade challenges with a proactive, tech-enabled tariff strategy, while considering ways to reduce risk and protect margins
Key insights:
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Understand risks, act fast — Stay ahead of tariff shifts and assess financial impacts quickly.
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Diversify supply, cut costs smartly — Rethink sourcing, leverage trade zones, and protect profits.
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Automate, partner, and win globally — Use tech and strong partnerships to stay competitive worldwide.
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The rise of economic nationalism, geopolitical tensions, and the constant changing of international agreements requires any organization that engages in global trade to have a well-structured, proactive trade response program. To be proactive, organizations need to have in place a system that can be nimble enough but not fleeting to be adaptive.
Indeed, having a response guide for managing trade and tariffs changes can offer a strategic roadmap to help businesses mitigate their risks, protect their margins, and remain competitive.
Understanding the global trade and tariff landscape
The foundation of any effective trade response is knowledge — companies must stay current with the regulatory and geopolitical environments that influence tariffs and trade policies. This requires every global trade department head to stay informed by monitoring trade news and developments using reliable sources. The sources selected must be able to provide real-time updates and should include government websites — such as customs agencies like the United States’ Customs & Border Protection or the European Union’s Taxation & Customs Union, both of which can offer timely insights.
Once informed, each trade professional must evaluate what this means for their organization and assess the possible exposure, financial and otherwise, as well as identify what percentage of a company’s imports or exports is vulnerable to tariff changes.
From there, an organization’s trade professional should conduct scenario planning, asking, for example, what a 25% increase in duties on a key component would mean for their organization. Or, asking how the company could handle the increase, and whether it would have to absorb that cost or consider changing prices — and, in either scenario, what would be the impact on margins and profits?
Understanding what’s taking place in the industry and how it will impact an organization can help set the stage for creating a strategic plan around trade and tariffs.
Strategic planning and adaptation
Proactive planning is the next step in building a resilient response framework. This involves having in place both short- and long-term tactics to help mitigate the impact of tariffs and more importantly, protect the organization’s profitability.
Since the global pandemic in 2020, many companies were faced with how reliant they had become on one region or one country for sourcing — a situation that was no longer viable. Many businesses began to look at ways to shift their supply chains and identify opportunities for sourcing from alternative countries. In fact, 72% of respondents to the Thomson Reuters Institute’s recent 2025 Tariff Survey said their organizations were already changing or considering changing their sourcing patterns.
After supply chains changes are made, companies will next want to look at how to manage their costs. Not surprisingly, an increase in tariffs often creates an increase in businesses’ operational costs; and, according to the Tariff Survey, most of the respondents expressed their concerns over the likelihood of increased operational costs as a result of tariff increases. To mitigate this challenge, companies need to evaluate how to manage these increases, whether through supplier negotiations, price adjustments, or absorbing costs in certain markets. Bulk purchasing agreements, hedging, and strategic supplier contracts can help stabilize pricing and reduce uncertainty.
Also, companies need to utilize trade zones to help manage costs. Leveraging Foreign Trade Zones (FTZs) allows companies to defer or reduce duty payments. Similarly, origin and classification engineering — processes by which the product is slightly modified or reclassified — can sometimes result in a lower tariff rate, provided the modified product complies with all regulations.
There are several other steps global trade professionals and their organizations can take to better navigate today’s trading environment, including:
Leveraging technology and data
Technology is the most critical tool for managing global trade and creating an effective response tool. With the right software systems, advanced technology solutions can allow companies to gain visibility, forecast changes, and act quickly. Indeed, the Tariff Survey underscores this point, noting that two-thirds of respondents said their companies are using technology that provides analysis of trade lanes, and more than half said their companies are using technology solutions to identify potential risk factors and determine strategies, including locating less costly trade routes, scenario-planning, and mapping supply chains.
It is worth noting that companies have to ensure they are keeping up with regulatory compliance, making it a necessity for compliance to be automated. Manual compliance processes are inefficient and error-prone, and automating certificate of origin verification, eligibility checks for Free Trade Agreements, and document management ensures consistency and reduces the risk of penalties. Automation also frees up compliance professionals to focus on more strategic and value-added activities.
Pursuing strategic partnerships
No man is an island to himself, and that goes for trading organizations as well. Companies should look to build or strengthen their relationships with strategic partners like customs brokers, trade attorneys, software vendors, and managed service providers. These alliances allow companies to expand their capabilities without expanding headcount. These partners also can provide expertise in classification, documentation, and compliance best practices.
Driving internal coordination and communication
A successful global trade response isn’t confined to the supply chain team. It requires cross-functional coordination and support from senior leadership across the entire organization.
Global trade department leaders must establish a cross-departmental tariff response team that includes professionals from corporate procurement, logistics, legal, finance, and sales teams. Indeed, these teams should meet regularly to review tariff updates, evaluate financial impacts, and align strategies.
Implementing the trade response guide: A practical framework
Once an organization considers the steps outlined above, a simple and practical framework for a global trade response guide begins to emerge. While the list below can get a company started, over time the guide can be expanded to become more robust as needed, changing to reflect what’s newly needed or what is no longer needed.
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- Assess exposure — Identify vulnerable goods, suppliers, and markets.
- Form a cross-functional team — Involve stakeholders from the organization’s compliance, logistics, legal, finance, and sales teams.
- Map and diversify the supply chain — Reduce dependency on high-risk regions.
- Leverage trade programs — Take full advantage of FTZs, Free Trade Agreements, and tariff engineering opportunities.
- Invest in technology — Use AI, trade platforms, and automation to gain speed and insight.
- Communicate internally — Keep leadership and departments aligned and informed.
- Review and adapt regularly — Conduct biannual reviews and remain agile in strategy.
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Tariffs are no longer an occasional disruption — they are a structural feature of today’s global trade environment. Companies that treat tariffs as such and invest in robust, tech-enabled, and cross-functional response programs will be better positioned to mitigate risk and seize upon opportunities whenever possible.
You can download a full copy of the Thomson Reuters Institute’s recent 2025 Tariffs Report here
