Global supply chains – meticulously optimised over years – face unprecedented disruption from rapidly shifting trade policies and tariffs. What was once a stable procurement landscape has transformed into a dynamic environment where yesterday's profitable supply chain can become tomorrow's financial burden.
For procurement and supply chain leaders, the challenge is not merely responding to current tariff structures but anticipating future changes and building resilience into every tier of their operations.
The statistics paint a stark picture of the challenge ahead. According to recent research carried out by Sapio Research, commissioned by Ivalua, 91% of supply chain and procurement leaders in the US expect disruptions from new trade policies. This expectation reflects a fundamental shift in how businesses must approach procurement strategy – moving from reactive cost management to proactive risk mitigation powered by artificial intelligence (AI)
The multi-layered impact of tariff changes
When tariffs shift unexpectedly, consequences ripple through organisations in complex ways.
Alex Saric, Chief Marketing Officer at Ivalua, identifies three critical risks that businesses face:
- Reduced profitability
- Lost market share from increasing prices
- Supply disruptions
Of particular concern is that most businesses fail to fully understand the impact of tariff changes because they lack complete visibility into their entire supply chains – a challenge extending beyond direct suppliers.
"The impact doesn't just depend on where immediate suppliers are located but also the sub-tier, their suppliers' suppliers," Alex explains.
"For example, having a local supplier could mean no impact from tariffs, unless that supplier relies on suppliers from the impacted country, in which case they may struggle to continue supply at current prices, or raise prices if possible. In such a case, having an onshore supplier has not protected you at all from changing tariffs."
Jos Joos, Head of Procurement & Supply Chain at KPMG Advisory Belgium, highlights that tariff responses vary depending on industry – such as food & beverage – and company size.
"If trade tariffs from Europe to the US stay at 15%, some manufacturers will cope, but in food it’s too high and you can lose the market,” he says. "Stockpiling was a short-term response to tariffs, but in fresh food you can’t build inventories, so disruption can wipe out a market."
"From a US CPO perspective, tariffs are worrying; you may need to review your entire supplier base by country of origin.”
In the near term, businesses are considering tactical responses. In the very near term, they are looking at how to mitigate the impact of tariffs on profitability by distributing costs between suppliers, customers and the business itself.
"Depending on the competitive dynamics of each industry,” Alex notes, “the impact of tariffs is absorbed by a different part of the overall chain.”
Rethinking supply chains in response to trade policy
The upheaval created by shifting tariffs has forced businesses to fundamentally rethink their supply chain strategies. Organisations are no longer content with optimising existing supply chains; they're actively seeking alternative sources of supply in countries with lower or no tariffs and attempting to diversify their networks to enable quicker pivots should tariffs change again.
According to a Sapio Research survey of more than 300 procurement and supply chain decision makers in the UK, the number-one strategy being applied is identifying and onboarding alternative suppliers for critical goods and services, cited by 73% of respondents.
There is a general movement towards nearshoring or onshoring when feasible, but the reality is more complex for certain categories.
"For some categories, supply is limited to specific countries with no near-term alternative that avoids tariffs," Alex explains. "In such cases, they are looking at longer term options to develop new sources of supply."
Beyond supplier diversification, organisations are making substantial technology investments to improve resilience. This includes better visibility into and mapping of multi-tier supply chains to assess exposure to different scenarios, plus proactive risk modelling and notifications.
"Technology is key to see where you’re exposed – not just at tier one but across n-tier suppliers,” says Jos. "Without technology it becomes almost impossible; you need real-time signals that flag exposure and trigger mitigation."
AI is playing a growing role in these capabilities, helping assess large amounts of information across more spend categories than was possible before. In the same Sapio Research survey, 71% of UK businesses admitted they must invest more in technology to better identify and mitigate geopolitical risks.
AI as the catalyst for proactive risk management
AI is emerging as the critical technology enabling businesses to move from reactive firefighting to proactive risk management. Its ability to process vast amounts of data, identify patterns and generate actionable insights at scale makes it uniquely suited to address the complexity of modern tariff and risk management challenges.
"AI lets you screen massive datasets globally and across languages, then link the data to create new insights,” notes Jos.
AI can monitor news alerts, map intelligence to specific supply chains and flag likely tariffs and their potential impact to procurement teams – before they are even finalised.
Once tariffs are implemented, the technology's value becomes even more apparent in identifying and qualifying new suppliers.
Alex describes the dual capability: "AI can help anticipate tariff-related disruptions by analysing news, social media and other channels, mapping it to your supply chain and informing you of the potential impact of tariffs. It can also help mitigate tariff-related disruption by helping quickly identify potential new sources of supply, assessing and even autonomously negotiating with new suppliers.”
The scale advantage of AI is particularly significant. From a monitoring perspective, AI-powered technology can track information across multiple sources and map it to suppliers across all spend categories – a task that would be practically impossible to complete manually.
"Doing so across your entire supplier base would typically not be feasible without technology due to the time and broad sources of information involved," adds Alex.
The data supports AI's transformative potential. In an Ivalua survey, 98% of US businesses with fully-deployed AI tools said they felt prepared for geopolitical risk, with nearly half describing themselves as very prepared.
In stark contrast, only 11% of those merely considering AI implementation felt very prepared to deal with disruption – a striking preparedness gap that underscores the competitive advantage AI deployment provides.
Jos lends further support to these findings: “AI is a key enabler because it forecasts, predicts risks and supports scenario planning.”
"You need early warning signals across different risk types and a single end-to-end system to build mitigation plans and make the supply chain more resilient.”
IVA: Ivalua's Intelligent Virtual Assistant in action
Ivalua's approach to AI-powered procurement addresses the tariff challenge through its Intelligent Virtual Assistant (IVA), which embeds AI agents directly into the platform with secure access to all relevant data.
Unlike standalone AI solutions, IVA benefits from Ivalua's unified platform architecture, which connects data, workflows and people throughout the source-to-pay process. This foundational advantage allows the platform to leverage AI more effectively than other approaches.
Alex details these comprehensive capabilities: "AI agents are embedded in our platform, with access to all data in a secure manner and a powerful workflow engine. Ivalua provides not just a system of record, but a system of action as well.
“Additionally, we have the ability to easily create or refine additional use cases besides those we include to work how our customers do."
For tariff and risk management specifically, IVA offers several relevant pre-packaged use cases. A category research assistant provides recommendations to mitigate risks and tariff impact based on extensive online research combined with deep understanding of a business's supply chain and spend activity. When new suppliers are needed to adapt to tariffs, AI supplier finder, autonomous sourcing and onboarding agents can identify alternatives, source, contract and onboard them. Leaders maintain control by choosing where they want teams to review actions versus having them autonomously executed by agents.
The platform also integrates with a rich ecosystem of information partners, seamlessly incorporating financial scores, risk ratings and other data that agents and workflows use to drive purchasing in accordance with company policies. Examples include Prewave, Integrity Next, D&B and Ecovadis.
Real-world implementations demonstrate IVA's impact. A multinational steel manufacturer with high exposure to metal and country-specific tariffs used IVA to identify potential new sources of supply facing lower or no tariffs while meeting various company criteria.
"They were able to identify a shortlist of potential new suppliers to engage in minutes,” Alex reveals. “That would have normally taken days or weeks in the past.”
Another customer, a global technology group, used IVA to extract and analyse contract terms across suppliers to assess its flexibility in responding to tariffs and determine when new suppliers would be needed. It then used IVA to identify potential alternatives for those categories and invite additional suppliers to sourcing events, turning what would have been a months-long manual review into a rapid, data-driven process. Adding one extra qualified supplier to each sourcing event alone delivered almost $10m in incremental savings.
Overcoming the data barrier
Despite AI's clear potential, significant barriers remain to adoption for tariff and risk management.
The most critical challenge is data quality and accessibility. For AI to provide accurate, effective recommendations and actions, it requires access to accurate, complete data – specifically, a comprehensive view of the supply chain, including all suppliers and the sub-tier suppliers they depend upon to deliver goods and services.
Very few companies have mapped their full supply chain, which fundamentally limits the ability of AI – or employees for that matter – to understand the impact and exposure of shocks and trade policies.
Additionally, information about suppliers, such as performance, spend and risk, is often siloed and difficult to access and map to the same supplier record. This fragmentation prevents AI and other systems from utilising the data effectively. No or poor meta data (information about data) also limits the ability of AI to properly leverage business data.
The solution lies in gaining control of supplier data through source-to-pay (S2P) platforms built on a unified data model with a robust meta data layer. Platforms with master data management capabilities that can synchronise data stored in enterprise resource planning systems are optimal for addressing this challenge as they also fix underlying data issues such as duplicates that exist in ERP systems.
Alex continues: "They ensure all information and activity is mapped to a single supplier record for high accuracy and easy accessibility by embedded agents anywhere in the S2P process.”
Ivalua's platform addresses these data challenges by ensuring all information and activity maps to single supplier records while integrating seamlessly with external information partners. This unified approach enables embedded agents to access comprehensive data at any point in the S2P process, delivering the accuracy and completeness AI requires to generate reliable insights and recommendations.
"Standalone tools don’t help if they’re not integrated,” adds Jos. “The key is end-to-end integration in your S2P platform so procurement can act in the flow of work.”
“AI embedded in S2P workflows helps treat the data and take the necessary actions.”
The future of AI in procurement: From adoption to autonomy
Looking ahead, AI is poised to play a dramatically expanded role in how businesses navigate trade policy and tariff volatility.
While actual usage of AI remains fairly limited at most companies, widespread adoption is inevitable. Companies that fail to embrace the technology risk falling significantly behind their competitors in an environment where speed and adaptability determine success.
Alex predicts a fundamental transformation in how procurement teams operate: "We will see all companies adopt it or risk falling far behind their competitors. And usage within companies will expand to more use cases and become more autonomous.
“We'll see businesses relying more heavily on AI to anticipate and model the impact of trade policy scenarios. It will also increasingly be taking action when policies shift, with humans selectively in the process based on the company and category."
The evolution from current AI capabilities to this future state requires organisations to start building foundations now. This means investing in unified data platforms, mapping supply chains beyond immediate suppliers and beginning to deploy AI use cases that deliver immediate value while building organisational capability for more advanced applications.
The transition does not merely represent an incremental improvement, but a complete reimagining of procurement operations, with AI permeating every function from strategic planning to tactical execution.
Turning disruption into competitive advantage
Tariff volatility and geopolitical uncertainty are not temporary challenges that procurement leaders can simply weather until stability returns. Instead, they represent the new normal, a permanent state of flux that requires fundamentally different approaches to supply chain strategy and risk management.
Organisations that thrive in this environment are those that embrace complete supply chain visibility, particularly understanding multi-tier supplier relationships that can expose hidden tariff impacts and leverage AI to transform reactive processes into proactive strategic advantages.
AI-powered procurement platforms like Ivalua's IVA offer a path forward, enabling businesses to transform from reactive cost absorbers to proactive strategic operators. By combining complete supply chain visibility with intelligent automation, predictive analytics and rapid response capabilities, organisations can turn the disruption of tariff changes into a competitive advantage. The stark difference in preparedness between organisations with fully deployed AI tools and those still considering implementation underscores the urgency of action.
As an overwhelming majority of leaders expect trade policy disruptions, the question is not whether to adopt AI-powered procurement solutions, but how quickly organisations can deploy them to protect profitability, maintain market share and build resilience into every tier of their supply chains.
For procurement leaders, the message is clear: the future of supply chain management is intelligent, autonomous and proactive. Those who embrace this transformation today will be best positioned to navigate whatever tariff turbulence tomorrow may bring.
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Alex Saric
CMO
