Will the tariff process affect supply chain delivery expectations? Possibly yes. Tariffs can impact supply chains, margins, and operations. Tariffs can increase costs for businesses and consumers, thus forcing businesses to reevaluate current operations and sourcing strategies and contemplate alternative markets. Further, tariffs can change the demand for certain goods, affect trade routes, and cause material shortages and/or production delays, all of which may ultimately cause supply chain delays and disruptions. However, vendors who buy from a US distributor or manufacturer and are paying increased costs due to tariffs can subsequently pass those increased costs down to their consumers, which may pose additional challenges but may have less of an impact on supply chain delivery expectations if the vendors and suppliers/manufacturers involved continue business as usual, despite increased costs. Note: The potential impacts of tariffs are not straightforward, and the global supply chain is currently under distress. Therefore, vendors should adjust their supply chain delivery expectations. What are some tariff mitigation strategies? Tariff mitigation strategies include but are not limited to the following: • Diversifying supply chains • Addressing payment of tariffs in supply contracts (i.e., using Intercoms + force majeure clauses) • Reclassifying goods, or reconsidering product design or production location • Using FTZs or bonded warehouses • Passing costs to consumers • Utilizing duty drawback programs
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