If you are stuck scrolling through spreadsheets to figure out your exposure, have fun and good luck.
If you are an engineer for a US-based manufacturer, there’s a very good chance you woke up today to an entirely new task: figure out how much stuff we buy that now have tariffs applied to them.
On April 2, 2025, the U.S. government announced a sweeping new tariff regime that impacts products produced from virtually every country in the world. In an official release, the White House says the move is meant to reprioritize manufacturing in the US. While many economists believe the new tariffs will not produce this result, it doesn’t change the fact that most US manufacturers will have some significant math in their immediate future.
If you buy finished goods, this is likely not a complicated feat. But if you buy raw materials and components from suppliers in other countries and then use those materials and components to make your products, you have a much heavier lift.
Hopefully your company has maintained a reasonable digital transformation investment strategy and you have one or even several digital assets that will make this process much easier and far more accurate than any manual process—especially once you have to deduce if you can absorb some of the costs or have to pass them on to customers.
If you are stuck scrolling through spreadsheets to figure out your exposure, have fun and good luck.
Here is a list of digital solutions commonly found in manufacturing, and how you can use them to find your tariff exposure, calculate your additional spend and decide if it’s worth eating any increase:
Enterprise Resource Planning (ERP)
Purpose: Centralized financial, inventory, and operational data management
Role in Tariffs:
- Provides financial visibility into product and material costs
- Tracks landed costs for imported components
- Supports decision-making on pricing adjustments
- Inventory tracking, but (near) real-time supply chain risk assessments may require additional risk management tools
Supply Chain Management (SCM)
Purpose: Optimizes procurement, logistics, and supplier management
Role in Tariffs:
- Models tariff impact on supply chain flows (e.g., supplier costs, lead times)
- Optimizes sourcing strategies to minimize cost increases
- Supports trade route and logistics adjustments to avoid tariff-heavy regions
- Tariff-specific impact simulations may require integration with ERP or specialized tariff analysis tools
Trade Compliance and Tariff Management Tools
Purpose: Ensures compliance with international trade laws and updates tariff classifications
Role in Tariffs:
- Tracks and updates tariff changes in response to regulatory updates
- Automates classification of goods under the correct Harmonized System (HS) codes
- Supports compliance audits and documentation for trade regulations
- Forecasting financial impact of tariff changes requires integration with ERP or BI systems
Business Intelligence (BI) and Predictive Analytics
Purpose: Data visualization and financial impact analysis
Role in Tariffs:
- Analyzes historical and real-time cost impacts of tariffs
- Models financial scenarios to predict margin impacts
- Integrates with ERP and trade compliance data to provide actionable insights
- Supports strategic decision-making on pricing adjustments and supplier shifts
Pricing Optimization Software
Purpose: Adjusts product pricing based on market conditions and cost fluctuations
Role in Tariffs:
- Determines whether tariff costs should be absorbed or passed on to customers
- Optimizes pricing strategies based on competitive market data
- Prevents margin erosion by aligning pricing with demand sensitivity
Product Lifecycle Management (PLM)
Purpose: Manages product design, BOMs, and supplier data
Role in Tariffs:
- Identifies which materials and components are subject to tariffs
- Supports product redesign efforts to reduce reliance on high-tariff materials
- Stores country-of-origin and trade compliance documentation
- Can be involved in redesigning products to mitigate tariff impacts
Digital Twins and Scenario Planning
Purpose: Virtual simulation of manufacturing operations for efficiency and resilience
Role in Tariffs:
- Simulates supply chain resilience strategies in response to tariff disruptions
- Models operational efficiencies to offset increased costs
- Tests alternative sourcing and logistics adjustments before implementation
- Less directly involved in product redesign than PLM tools
