GEP Weighs in as US Firms Scramble to Adapt Supply Chains

Businesses face new supply chain hurdles as tariffs on US imports from China, Mexico and Canada take effect under US President Donald Trump’s administration.

Companies across industries are assessing supply chain vulnerabilities as tariffs drive up costs and complicate procurement strategies.

A recent GEP blog highlights how businesses worldwide are reviewing sourcing and cost-management measures to counter rising expenses.

Sectors such as automotive, clean energy and consumer goods are particularly exposed to these shifts. Higher import duties mean increased material costs, potential supply shortages and tighter profit margins.

Adjusting procurement strategies in response to tariffs

With tariffs reshaping global trade, companies must rethink how they source materials and manage supply chains. Procurement teams are under pressure to reduce reliance on affected regions while keeping production costs in check.

GEP warns that businesses unprepared for these changes will encounter operational disruptions, squeezed margins and greater exposure to supply chain bottlenecks.

Companies that take proactive measures, however, can gain a competitive edge by building more resilient and adaptable procurement strategies.

Although the long-term trade landscape remains uncertain, organisations that anticipate and respond to these challenges will be better positioned to navigate evolving policies.

GEP emphasises that adjusting procurement and supply chain strategies now can help mitigate risks before they escalate.

Five key strategies to manage supply chain risks

To adapt to these shifting trade conditions, GEP outlines five strategies businesses can implement to safeguard their supply chains and procurement operations.

1. Expand sourcing beyond China and North America

Diversifying suppliers is critical for mitigating tariff impacts. GEP advises businesses that depend on Chinese and North American imports to explore alternative sourcing regions. Southeast Asia, Eastern Europe and Latin America present viable options for manufacturing and raw materials.

In addition to shifting supply chains geographically, companies should negotiate long-term contracts with favourable pricing terms. Locking in agreements with suppliers outside tariff-affected regions can help stabilise costs.

2. Consider nearshoring and onshoring

Relocating production closer to home is another way to minimise exposure to international trade disputes. Nearshoring—moving production to neighbouring countries—and onshoring—bringing manufacturing back domestically—can reduce transport costs, improve supply chain visibility and ensure regulatory compliance.

GEP notes that shorter supply chains improve delivery times and reduce reliance on overseas suppliers, making businesses more agile in responding to trade policy changes.

3. Strengthen cost management strategies

Tariffs force companies to make tough financial decisions—absorb higher costs or pass them on to consumers. GEP identifies three cost-management approaches businesses can adopt:

• Reclassifying products to qualify for lower tariff rates
• Passing costs onto consumers when brand loyalty allows
• Using financial hedging tools to mitigate currency fluctuations and commodity price spikes

Smart cost management is essential for maintaining profitability in a volatile trade environment.

4. Use AI and data analytics for procurement

Advanced technologies like AI and predictive analytics are reshaping supply chain management. GEP highlights how AI-driven procurement tools help businesses optimise costs, anticipate supply chain disruptions and automate sourcing decisions.

Predictive analytics enables companies to monitor demand fluctuations and adjust procurement accordingly. Real-time tracking of shipments, supplier performance and inventory levels also enhances decision-making, making supply chains more resilient.

5. Strengthen supplier collaboration

In an unpredictable trade landscape, strong supplier relationships are more important than ever. GEP recommends businesses work closely with suppliers to build flexibility into their procurement strategies. Key actions include:

• Collaborative forecasting to improve demand planning
• Supplier diversification to minimise reliance on specific regions
• Long-term contracts with contingency clauses for stability amid trade uncertainty

By fostering open communication and collaborative planning, companies can navigate shifting trade policies more effectively.

Preparing for a changing global trade environment

As trade policies continue to evolve, businesses cannot afford to wait and react.

GEP stresses that staying informed on trade negotiations and engaging with policymakers can help organisations influence future regulations.

Tariff-driven disruptions are forcing companies to rethink procurement, sourcing and pricing strategies. Businesses that remain agile, diversify suppliers and leverage technology will be best positioned to succeed.

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