Don’t panic. Prepare—with supply chain resilience

On April 2, President Trump announced sweeping new tariffs, starting at a 10% base rate and increasing for goods from 57 other jurisdictions around the globe. While tariff rates and possible negotiations change by the day, one constant remains: uncertainty.

For business leaders, this is the moment to pause, reassess, and simplify your approach to supply chain resilience. That means developing short-, medium-, and long-term strategies to mitigate the inflationary pressure, stabilize operations, and protect margins amid ongoing trade disruption.

While you can’t exactly forecast the next change in trade policy, businesses can prepare intelligently by tracking trade policy signals, analyzing exposure, and building systems that allow for rapid adjustment.

Here’s how firms can adapt to build more agile, resilient supply chains.

Short-Term Strategies: Immediate Action for Immediate Impact

1. Improve Tariff Classification Accuracy

Incorrect Harmonized Tariff Schedule (HTS) classifications are a fast path to overpayment and penalties. Increased scrutiny by Customs and Border Protection (CBP) can leave you with hefty fines and penalties that can be easily avoided. Companies benefit from revisiting tariff codes regularly, especially when changes are announced, to confirm they’re using the lowest legally justifiable classifications and staying aligned with current global trade rules.

2. Strengthen Cash Flow Management

Tariffs hit margins but also have immediate cash flow implications. Understanding how tariffs stack and what exemptions might be available can yield savings. Section 301, Section 232, IEEPA Border Tariff, and IEEPA Reciprocal Tariffs can all be applied on top of each other. Importers should evaluate how duties are affecting unit economics, and work with finance teams to reevaluate landed cost models and possibly renegotiate supplier costs and terms to avoid passing the entire increase to the customer.

3. Accelerate Shipments Ahead of Key Deadlines

With newly announced reciprocal tariffs set to take effect at 12:01 a.m. on April 9, and a partial suspension announced just hours later, manufacturers are facing significant uncertainty. Accelerating shipments ahead of tariff implementation can be an effective short-term strategy to avoid immediate cost increases. However, this on-again, off-again policy environment is creating confusion across supply chains, prompting many companies to reexamine sourcing strategies and risk exposure. In this climate, proactive planning helps businesses stay ready to respond rather than react.

Medium-Term Strategies: Building Structural Flexibility

1. Leverage the First Sale Rule

Leveraging the First Sale Rule, where duties are calculated based on the price paid by the middleman rather than the final buyer, can significantly reduce dutiable value. This approach is particularly effective in multi-tiered international supply chains.

2. Apply for Duty Drawback Programs

Eligible businesses should explore duty drawback programs, which allow for refunds on duties paid when imported goods are exported or used in the manufacturing of exported goods. This can be a powerful tool for companies with circular or international product lifecycles. The new reciprocal tariffs are currently eligible for duty drawback.

3. Utilize Foreign Trade Zones (FTZs)

Establishing operations in FTZs can provide duty deferral, reduction, or even elimination, depending on how and where goods are processed or reexported. FTZs also offer administrative and logistical efficiencies that can reduce overall supply chain costs.

4. Run What-If Scenario Planning Exercises

Tariffs are unpredictable, but preparation doesn’t require certainty. Businesses benefit from modeling the impact of different tariff rates by country of origin and evaluating how newly imposed tariffs apply across key product lines to better understand financial exposure. Building these scenarios into regular supply chain reviews creates decision-making agility and prepares companies to act quickly before new policies take effect.

Long-Term Strategies: Operational Transformation

1. Explore X-shoring and Reshoring Opportunities

Longer-term, companies must evaluate whether to shift production to new geographies (x-shoring) or develop local-for-local production environments (reshoring). These decisions should balance cost, tariff exposure, geopolitical stability, and customer proximity.

2. Establish Dynamic Optionality in Manufacturing

Establishing flexible, multi-region production capabilities provides “optionality,” the ability to shift output based on cost, risk, or trade policy. Companies with diversified manufacturing footprints can more effectively weather tariff storms without sacrificing service levels.

3. Implement Tariff Engineering Strategies

Tariff engineering, legally modifying a product’s design or composition to achieve a more favorable classification, can drive meaningful savings. Examples include slight modifications in packaging, assembly, or sourcing that shift products into lower-duty categories without compromising performance or compliance.

We Can Help

Tariffs create real inflationary pressure, but they also create opportunities to optimize, adapt, and rethink how your supply chain works. By combining immediate action with structural and strategic transformation, companies can reduce exposure and increase resilience.

At Elliott Davis, our business advisory team works with clients to assess financial vulnerabilities, model risk scenarios, and create tailored strategies that align with changing global trade conditions. If your business is navigating rising duties or uncertain sourcing costs, we can help you gain clarity and build a smarter, stronger path forward.

Contact us today to talk about building your resilience strategy.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.