Trade and customs dynamics in the new tariff era
As tariffs take hold, companies respond with flexible supply chains and smarter trade tools.
With sweeping new US tariffs now taking effect, companies across industries are recalibrating operations and turning to technology and strategic supply chain shifts to manage increasingly complex trade dynamics. Originally announced by the Trump administration in April 2025, the tariffs apply to a wide array of imported finished goods and materials.1 For example, a negotiated trade agreement with the European Union (EU) imposes a 15 percent tariff on most EU imports.2
Faced with tariffs and geopolitical shifts, businesses across all sectors are emphasizing operational agility, adopting generative artificial intelligence (GenAI), and reconfiguring supply chains to better manage trade-related challenges.
A recent KPMG LLP survey3 revealed that 53 percent of respondents viewed uncertain global trade and economic conditions as a major challenge in addressing tariff-related issues. However, only 27 percent felt that trade policy uncertainty posed a significant barrier to relocating manufacturing and operations to the United States. The contrast underscores the complexity of tariff response strategies, which must balance trade policy uncertainty with broader operational and economic considerations.
Operational agility: The go-to strategy
A solid 55 percent of surveyed execs noted that reconfiguring the supply chain was the primary strategy for coping with shifting trade and tariff dynamics; this underscored the importance of operational agility.
Supply chain flexibility is critical when it comes to mitigating risks and capitalizing on opportunities that may be presented by global trade changes. Companies that are able to adjust rapidly to trade and tariff fluctuations are likely to remain competitive in these difficult-to-predict times.
Reconfiguring the supply chain is the primary strategy that business executives are adopting to cope with shifting trade and tariff dynamics and its impact on trade and customs.
Margins and sales down: Safeguarding profitability
Most survey respondents—a substantial 57 percent—reported decreased gross margins as a direct result of the tariffs. Similarly, 55 percent encountered reductions in foreign sales of up to 15 percent. These figures illuminate the tangible financial impact industries face as a result of tariffs, and why they’re making efforts to safeguard profitability.
Generative AI: Growing trust
A growing number of businesses have adopted GenAI as a vital part of their trade and tariff strategies. According to 37 percent of respondents, GenAI plays a key role in their tariff response and trade strategy, reflecting an increased confidence in AI’s ability to aid in complex decision-making and scenario planning. Despite the growing enthusiasm, however, some skepticism persists; 13 percent of respondents don’t believe that GenAI will play a role in influencing the success of their tariff or trade policies. This points out that while there’s growing trust in AI’s transformative potential in reshaping traditional trade approaches, there’s room for greater understanding and integration across industries.
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As trade and tariff volatility persist, industries are adopting multifaceted strategies to address market changes and global challenges. Technological, operational, and strategic flexibility will be crucial to mitigate the immediate financial impact of tariffs and achieve long-term resilience and profitability. Access to tools to accurately quantify and account for the impact of tariffs on supply chains are table stakes for companies as they seek to develop mitigation strategies and set market pricing.
Footnotes
2 EU and United States reach agreement on tariffs and trade,” KPMG LLP, July 28, 2025
3 In May 2025, KPMG LLP surveyed 300 US-based C-suite executives in various functions about their views on the US proposed tariffs and their effect on their company and industry.
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