Translating Tariffs into action for Procurement teams
As globalization slows and we accelerate towards a new world shaped by trade policy, many hurdles lie ahead. Higher input costs, supply chain disruption, changing market dynamics, and more present both risk and opportunity for procurement leaders and their teams.
While tariffs themselves are not new, and in fact, many of the US administration’s objectives have been forewarned, it is the speed of implementing those objectives that is causing challenges to businesses and forcing the need for short-term actions and mid-term planning. Our guide explores how procurement, as the team on the front line of the impacts, can help achieve both.
This guide is your one-stop resource for procurement professionals to understand:
- The basics of tariffs, what they are, and how they work
- Procurement’s role in mitigating tariff impacts
- How to act now and plan for what’s next
You’ll also find real-world case studies, actionable FAQs, and tools to help you make more informed decisions, all in one place.
Hear from our experts in the articles and case studies below for further insights into the themes and topics explored throughout Procurement’s Guide to Tariffs.
What Is a Tariff?
A tariff is a tax imposed on imported goods, designed to protect domestic industries, generate revenue, or influence trade policies. There are three primary types:
- Ad Valorem Tariffs: A percentage of the product’s value.
- Specific Tariffs: A fixed fee per unit of the product.
- Compound Tariffs: A combination of both ad valorem and specific tariffs.
Tariffs are paid by importers at the time of customs clearance and can affect pricing, supply chains, and international trade dynamics.
Read more about Tariffs 101
HOW TARIFFS INFLUENCE CONSUMER PRICES
Tariffs increase the cost of importing goods, but how much of that cost reaches the consumer depends on multiple factors. A 10% tariff may only slightly raise the retail price or even be absorbed by the seller, but each company will have its own tipping point where margins become too tight and a greater proportion of the increase must be passed on. We look at how that would play out on a 145% tariff.
In this article, we explore some of the contributing factors to the consumer price, including the complexity of the supply chain, product type, and more.
Read more about How Tariffs Flow Through to Consumers.
HOW PROCUREMENT CAN MITIGATE TARIFF IMPACTS
Key Procurement Strategies for Now and the Months Ahead
In a time of rising tariffs and global trade uncertainty, procurement teams face growing pressure to manage cost increases and protect profit margins.
This article explores what procurement teams can be doing in the short term to mitigate cost and risk pressures, and explores more strategic activity focused on embedding agility and robustness into supply chains longer-term
These practical strategies enable businesses to build more resilient, transparent supplier relationships and safeguard their operations in a volatile market.
CASE STUDY: CREATING SUPPLY CHAIN RESILIENCE
Case Study: Building Supply Chain Resilience for a Leading Tech Manufacturer
Discover how Proxima partnered with a global technology leader to enhance supply chain resilience.
By deploying a team of supply chain and risk experts, Proxima mapped the client’s Tier 1-4 value chain, identified critical vulnerabilities, and developed a comprehensive strategy to mitigate risks and ensure continuity.
This case study illustrates the importance of proactive risk management and strategic planning in today’s complex supply chain environments.
Read the full case study here.
WHAT YOU NEED TO KNOW ABOUT INCOTERMS
Incoterms (International Commercial Terms) are standardized global trade terms established by the International Chamber of Commerce (ICC).
They clearly define buyer and seller responsibilities, outlining who handles transportation, insurance, customs duties, and tariffs, and pinpointing exactly where the risk transfers between parties.
Choosing the right Incoterm strategically can significantly mitigate your tariff exposure, reducing costs and risks.
Procurement teams often explore shifting Incoterms to suppliers to minimize risk—but it’s important to consider that asking suppliers to assume additional responsibilities could influence pricing and business relationships.
Reviewing Incoterms regularly with your suppliers ensures informed decisions and optimal cost management.
Read our full Guide to Incoterms
TARIFF FAQs
Tariff FAQs: Practical Answers for Procurement Teams
Tariffs can be complex — but your response doesn’t have to be. From whether you can reroute shipments or reclassify goods, to exploring the benefits of bonded warehouses or changing Incoterms, we’ve gathered answers to the most common questions clients ask us.
Get quick, actionable insights into how to manage tariff exposure and make informed supply chain decisions.
