How To Develop A Permanent Tariff Posture

Edmund Zagorin is Founder and Chief Strategy Officer of Arkestro, a leading Predictive Procurement Orchestration platform.

The first months of the new presidential administration have shown us that the introduction of, and changes to, tariffs placed on imported foreign goods are no longer unpredictable anomalies; they are an ongoing reality. Businesses must move beyond reactionary strategies and develop permanent procurement postures that support not merely resilient but antifragile supply chains. With the acceleration of global tariffs, enterprises cannot afford to be caught in the crosshairs of a trade war.

The new predictably unpredictable tariffs are here to stay.

The natural tendency to resist change is a fundamental aspect of human behavior. It is also a leading obstacle in the way of an organization’s efforts to adapt to changing circumstances. Though the U.S. has seen many changes in recent months, many business leaders are still operating under the assumption that trade tensions will “settle.”

This is a naive outlook, and one repeatedly contradicted by actions, not rhetoric. The administration has signaled a commitment to fundamentally reorder global trade, not merely to eliminate one-sided protectionism by other nations, but to eliminate trade imbalances, period. To quote Samuel L. Jackson’s character in Jurassic Park: “Hold onto your butts.”

In the short term, supply chain teams have responded to tariffs with a number of creative tactics, including:

• Tariff Splitting: This involves asking strategic suppliers to share the cost of the tariff with them in exchange for an extra year on their contract, expecting tariffs to be on-again, off-again.

• Incoterms Refactoring: In the event of a DAP Incoterm, the procurement team may be on the hook to actually cut the check that pays the tariff to Customs. Reviewing agreements for DAP Incoterms can be a way to prioritize and refactor supplier agreements to support trade compliance.

• Rerouting And Frontloading: Supply chain teams are taking advantage of changes in tariffs to reroute cargo and frontload inventory in massive distribution centers, leery of the potential for tariffs to eat into margins in future quarters.

But these mitigation efforts are, at best, half-measures, not true adaptation. Like it or not, tariffs are front and center for the foreseeable future. Instead of waiting for trade tension to settle, a proactive leader will lean into agility and look for ways to adapt and adjust to the new predictably unpredictable regulatory environment. Trying in vain to predict where and when tariffs will hit is a losing game. Organizations must assume they will at any given time and prepare accordingly.

The keyword here is agility: Businesses must structure procurement processes that can rapidly adjust to tariff changes. It also means creating antifragile supply chains that become stronger in response to chaos rather than weaker. This means seeking out new industry technology that drives efficiency and best practices to reconfigure supply chains, strengthen relationships with minimally impacted suppliers and develop thorough multisource contingency plans that can be adjusted as new tariffs are announced.

Hope is not a strategy. Predictive procurement is imperative.

Simply reacting to changes as they come is akin to playing a game of dodgeball while blindfolded. Companies that rely on reactive strategies will find themselves perpetually on the back foot, able to fend off obstacles at first to survive, but not to thrive.

In contrast, predictive procurement is a novel approach that leverages decision simulations for supplier selection, price negotiation and process steps to anticipate and respond to price fluctuations, ensuring businesses stay agile in an ever-changing market. With the use of granular-level data, procurement leaders can make more strategic, informed, data-driven decisions that optimize costs while maintaining supply chain stability.

Unlike traditional spend analysis, which is done by analyzing the final payments made from reconciling purchase orders and invoices, this data must come at the item or stock-keeping unit (SKU) level. AI supporting predictive procurement can be used to help create and validate this data in a virtuous cycle, because better item-level data can then power better procurement decisions across a supply network.

Leaders adopting this dynamic strategy can transform the procurement team from a cost center into a strategic, results-driven savings function aligned with enterprise-wide goals, becoming a cornerstone of growth for the organization. This function can support antifragile supply chains, where tariffs drive changes that ultimately strengthen and fortify supply continuity and improve costs.

What should be done? Shorten procurement cycles to reduce tariff exposure.

There is a clear need for new procurement technologies. Traditional procurement cycles are often too slow to keep up with today’s fast-changing tariff environment, leaving companies vulnerable to cost spikes and supply chain disruptions. To stay competitive, businesses should embrace change to accelerate procurement processes and adopt more agile sourcing strategies.

In other words, the only procurement KPI that truly matters in a chaotic market is time to value.

Yes, time to value is a combination of cycle time and attainment of the most desired outcome.

And no, value is not just about cost savings. It’s holistic, and it includes the budget owner’s preference, the supplier relationship and, of course, the quality and delivery. Good supply chain teams have ways of measuring and delivering even the most qualitative dimensions of value. Faster.

Leverage technology to build not just resilience but antifragility.

Sweeping changes to trade policy have presented new challenges for procurement teams and businesses. To stay ahead of cost fluctuations and supply chain disruptions, a mindset shift needs to occur. Tariffs are not a temporary challenge; they are a new business constant, predictably unpredictable. And ultimately, those who adapt faster will gain a competitive advantage over the laggards.

The key to success is not to be satisfied with resiliency. Adaptation is reactive. What if predictive models could enable every tariff or tariff threat to strengthen rather than pummel a supply chain? What if all the work needed for supply chain execution could be done in parallel rather than serially, one by one? This is the opportunity that strategic use of AI technology can offer, and for once, the timing couldn’t be better.

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