When tariffs disrupt global supply chains, European mid-sized companies face immediate and tangible challenges, especially when tariffs go into effect unexpectedly. The question becomes: How can your business quickly adapt and thrive despite the disruption caused by tariffs imposed?
Recent studies, including research by the American Economic Association, have found that unanticipated tariffs can cause an overall welfare loss of 0.12%. Even small tariffs targeted at specific goods and services can disrupt your shipments, negatively impacting your supply chain’s performance. The potential impact of future tariffs remains uncertain, making proactive measures critical.
Short-Term Strategies: Prepare Your Business for Immediate Action (Next 3 Months)
Adapting to tariffs may require rapid action to protect profitability and maintain operational stability.
1. Rapid Assessment and Response
- Immediately evaluate vulnerable products when tariffs go into effect.
- Quickly pass along increased costs or negotiate effectively with suppliers.
- Use accurate data analysis to pinpoint goods and services facing the greatest disruption.
2. Manage Currency and Commodity Risks
- Proactively hedge currency risks to maintain stable pricing.
- Monitor commodity markets closely in anticipation of potential tariff increases.
- Temporarily stockpile critical imports to mitigate disruptions from sudden tariff changes.
3. Establish Alternative Logistics Routes
- Quickly identify alternative shipping routes if your home government unexpectedly imposes tariffs.
- Implement short-term contingency plans to ensure continuous shipments.
Medium-Term Strategies: Building Operational Resilience (3-12 Months)
After addressing immediate challenges, transform disruptions into strategic advantages:
3. Expand and Diversify Markets
- Enter emerging markets like India and Mexico to safeguard against future trade wars.
- Strengthen intra-European trade relationships, reducing reliance on tariff-sensitive markets like Canada and Mexico.
4. Accelerate Automation and Digitalization
- Invest in automation technologies to offset tariffs on imported components, sustaining competitive advantages.
- Boost production efficiency and improve overall business agility.
5. Engage Strategically in Policy Advocacy
- Collaborate with influential groups like the American Economic Association to shape favorable trade policies.
- Closely track and proactively respond to tariff policy changes.
Long-Term Strategies: Secure Sustainable Success (12+ Months)
Prepare your business strategically amid evolving geopolitical shifts:
6. Optimize Global Supply Chains
- Shift production away from regions heavily impacted by tariffs on imported goods.
- Forge robust strategic partnerships in tariff-neutral regions with stable global trade partners.
7. Strengthen International Trade Agreements
- Utilize EU-led negotiations to access stable markets beyond Canada and Mexico.
- Position your business effectively amidst ongoing trade wars and geopolitical uncertainty.
Expert Insight: Gui Ausset on Adapting to Tariffs in 2025
“We are navigating a complex era of increasing protectionism. The introduction of 25% tariffs on Mexican and Canadian goods is a stark reminder of the volatility businesses must prepare for. Companies must look beyond traditional markets and explore new trade strategies.”
“With the ‘America First Investment Policy’ now in effect since March 4, European businesses have a unique strategic advantage to leverage incentives for setting up operations in the U.S. The regulatory landscape is shifting, and those who act within the first 100 days will gain significant advantages.”
“The ongoing renegotiation of NAFTA and potential tariff reciprocity measures mean that businesses must remain agile. Those who proactively build diverse, resilient trade networks will be best positioned for success.”
Prepare Your Business for Success with Altios
Disruption is inevitable, but your business can strategically transform these challenges into opportunities. Altios provides your business with a unique strategic advantage, expertly navigating the changing tariff landscape to ensure your company stays agile, profitable, and ready to respond effectively to tariff-related disruptions.
Contact Altios today to confidently position your business for sustained success, even when tariffs disrupt global supply chains.
