The world of global commerce is currently navigating an unsettled period, with the primary driver of the turbulence being tariffs. Tariffs are taxes paid by importing companies, which then pass part or all of the tariff cost on to consumers, resulting in higher prices.
In anticipation of having to pay more, buying behaviors at the individual and household levels are already changing. A McKinsey survey revealed that 60 percent of responding consumers said they have already changed or expect to change their spending habits because of tariffs.
We understand that tariffs will ultimately cause individuals to pay more, but tariffs also impact businesses. For organizations that produce the products they sell in other countries or rely on components manufactured abroad, tariffs are having an immediate impact. Negative effects on enterprises include rising costs and lower profits. Tariffs also mean increased regulatory paperwork, processes, and rules, as well as supply chain delays.
While higher tariffs are here for the medium-term, there is good news as well. Using Artificial Intelligence and your own historical data can transform the way you navigate and mitigate the operational headaches caused by the changing tariff landscape. Here are four ways your data and AI can make a difference:
- Forecast Tariff Impacts with Historical and Real-Time Data: Connect your data sources, such as import records, market analysis, and supplier invoices into a single, unified data ecosystem. This gives you friction-free access to information that can fuel real-time views into tariff impacts.
- Tariff and Supply Chain Scenarios: Using advanced techniques, such as digital twins, you can simulate and optimize new supply chain topologies. Predictive tariff scenarios help you prepare contingency plans on supplier availability while understanding the impacts to margins and cost structures.
- Enhanced Strategic Sourcing: Can you predict when your supplier will not be able to deliver critical components? What about your supplier’s supplier? Knowing who your backup suppliers are in times of crisis means the business can continue without delays. AI can review global supplier networks, assess risk, and evaluate the cost of changing. Understanding these key metrics helps your business decide how and when to shift away from tariff-hit geographies.
- Monitor Shifting Trade Policies in Real-time: AI can discover and scan government announcements and policy updates as they are released. Combine this with historical trade policies and you can project how tariff shifts will impact you.
As pressures from tariffs mount, the need for real-time visibility and forecasting disruptions has never been greater. LRS helped our customers flourish during the last major global market disruption and we are ready to help you navigate and excel through present and future challenges.
Do you want to explore AI for your business? Please contact us to request a meeting with one of our experts. Don’t have an information architecture for AI you trust yet? LRS can also help you collect, organize, and analyze your data so that it is ready to help drive your business.