From Pandemics To Protectionism: Resilient Supply Chains Are The Answer

The COVID-19 pandemic disrupted nearly every aspect of modern life and brought the global supply chain into the spotlight. With accelerated consumer expectations, companies around the world sharpened their supply chain agility and flexibility, shifted manufacturing lines from established products to COVID-19 necessities and diversified sourcing for key production stocks to increase risk resilience.

Today, navigating trade uncertainty around "Section 301" Chinese import tariffs¹ and the changing trade deals with 60 other countries will exert similar effects. COVID-19 lessons offer a blueprint for meeting tariffs and other supply chain challenges. One chief executive officer (CEO) of a global manufacturing and supply chain firm recommends that companies update their COVID-19 playbooks by reviewing manufacturing locations and timing and begin leaning on artificial intelligence (AI) to improve efficiencies.²

In this article, we will discuss three key tactics to evolve and mature your supply chain systems to meet the challenges of tariffs through effective planning, collaboration, and data visibility.

1. Visibility – Do Not Optimize on Your 'Gut'

Adaptive supply chains are built on end-to-end visibility — from raw materials to doorstep delivery. During the pandemic, whether managing process flow issues or struggling with just one piece of the supply chain puzzle, operators found that system visibility of feedstocks, movement of intermediate and end products, and other workflow metrics were essential to supply chain resilience. The same need for data visibility applies in the "tariff-demic."

Start by analyzing your existing data to understand any country-of-origin red flags, including how components are classified under the Harmonized Tariff Schedule (HTS)³, and how changes upstream may alter duty rates and thus your costs and timelines. The U.S. International Trade Commission revises the HTS as new trade agreements are reached. By examining the vulnerable areas of your supply chain, you can form a contingency plan by answering key questions like:

• Do you understand the true country of origin for all inputs?
• Can you pre-qualify alternative suppliers from lower-tariff regions?
• Are there opportunities for on-demand/just-in-time manufacturing?
• What other ways can you lower exposure based on your data?

Regular analysis of end-to-end data is not only helpful to stay ahead of system disruptions, but commercial and retail consumers are increasingly asking for this information. Ankura's annual Consumer Sentiment and Holiday Survey shows increasing demand for transparency and bias towards brands that demonstrate sustainability and other sourcing attributes.⁴

2. Flexibility – Build to Bend, Not Break

Flexible supply chain operators use scenario modeling to forecast disruptions and their impacts (e.g., labor actions, natural disasters) to company performance under various constraints and assumptions. Structure your model to enable you to simulate tariff changes based on geopolitical events or trade negotiations and their subsequent impact on margins, pricing, and inventory shifts.

Whether your mode is built in Microsoft Excel or a full enterprise resource planning (ERP) system, it is only as good as its ability to help you focus on impacts on your supply chain and your measures of incremental improvements or impairments to total cost of ownership (TCO) and sales. It must answer questions like what would happen if your TCO for a particular product input increased by 5 cents or sales decreased by 10%.

Ankura's Supply Chain practice can review your model, its trade and macroeconomic variables, and create additional "what if" scenarios to help you harden your model. We can also assist with your scenario modeling and contingency planning with respect to applying AI and other automation tools for increased responsiveness.

• Setting up alerts that can quickly inform you of changes — anything from tariff updates to weather disruptions.
• Creating criteria and decision models for real-time recommendations to re-route inventory or adjust suppliers based on your needs and market.

3. Agility – Have Options and Be Ready to Exercise Them

Agile supply chains enable companies to rapidly adjust inventory levels, stock-keeping units (SKUs), or transportation modes to meet market challenges. Ideally, the value of such agility can be fully captured when companies implement a continuous supply chain design strategy. This process — recognized as the best practice after the COVID-19 pandemic and other periods of trade tariffs — should be executed by an internal team supported by comprehensive visibility of actual performance and other data. The output of implementing this strategy is integrated scenario planning, enabling companies to make faster, better-informed decisions across their supply chain.

Five Phases of Creating and Implementing a Continuous Supply Chain Strategy

1. Create your current network baseline

Model your current flows, costs, suppliers, manufacturing hubs, clients, etc. During this phase, you should also examine all your commercial contracts and pricing mechanisms. The agility described here requires contracts that provide for this flexibility.

Key options for contracts:

• Allowance for periodic pricing reviews if key costs change significantly.
• Clauses that allow companies to shift a portion of volume to other suppliers/geographies for reasons like tariffs, pandemics, and even performance failure.
• Transportation options for emergency needs.

2. Map potential future disruptions

Consider the possible effects of tariffs, distribution restrictions, new operations, new products, new regions, and more.

3. Evaluate alternative scenarios

Explore options such as third-party logistics, lower-cost regions, new distribution routes, different suppliers, more efficient inventory policies, or pop-up manufacturing plants and warehouses.

4. Select the optimal scenario

Build the business case for both the short and long term, define an implementation roadmap, and execute.

Key option — "tariff engineering"⁵:

In use since the late 1800s, this is the ability to make rapid SKU reconfigurations by changing product materials, dimensions, composition, packaging, or even the manufacturing process, so that a specific product genuinely — and legally — qualifies for a different, lower-tariff classification.

5. Continuously adapt
By doing the homework to develop an initial supply chain strategy, you are ready to consider new disruptions, evaluate new scenarios, and make faster, better-informed decisions. You can also revisit your overall strategy as needed by changing market and economic factors.

Footnotes

1 Kienzle, Natalie. "A Guide to China's Section 301 Tariffs." USA Customs Clearance, 26 June 2025, https://usacustomsclearance.com/process/section-301-tariffs-a-comprehensive-guide/

2 Evans, Dave. "2025 supply chain playbook: Tariff engineering." Fast Company, 28 January 2025, https://www.fastcompany.com/91266698/2025-supply-chain-playbook-tariff-engineering

3 United States International Trade Commission. (2025 HTS Revision 16). Harmonized Tariff Schedule. https://hts.usitc.gov/

4 https://angle.ankura.com/post/102jn4a/winning-the-holiday-retail-race-strategic-insights-on-consumer-sentiment-shop

5 Bao, Anniek." 'Tariff engineering' is making a comeback as businesses employ creative ways to skirt higher duties." CNBC, 18 June 2025, https://www.cnbc.com/2025/06/18/businesses-tweak-products-to-qualify-for-lowter-tariffed-categories-.html#:~:text=The%20practice%20of%20tariff%20engineering,%2C%20no%20fraud%20is%20committed.%22

6 Payne, Tim. "Antifragile State" Gartner, 21 May 2025, https://www.gartner.com/en/articles/supply-chain-resilience

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.