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Tariff shifts are no longer occasional—they’re ongoing. Tariff rates and details are subject to change as negotiations and responses from various countries occur. Uncertainty is complicating business forecasting and inflating global supply chain costs. Multinational corporations must swiftly act to address the impact of tariffs on supply chains and mitigate risks.
President Donald J. Trump declared a national emergency on April 2, 2025, and invoked the International Emergency Economic Powers Act (IEEPA) to impose tariffs on global trade, citing a lack of reciprocity in bilateral trade relationships. The U.S. Trade Representative (USTR) issued a statement supporting the move, which was outlined in a White House Fact Sheet.
On May 28, 2025, a federal court judge at the U.S. Court of International Trade blocked President Trump’s tariffs imposed under IEEPA without Congressional approval. The Trump administration requested a delay in the tariff block the next day.
This marks a significant escalation in the global trade landscape—one that directly impacts how businesses manage supply chains. To navigate this new environment, it’s critical to understand how your supply chain functions and where it’s most exposed to tariff risk.
Key Takeaways
- Tariffs are reshaping global trade: Ongoing and unpredictable tariff changes are disrupting sourcing, manufacturing, and procurement strategies worldwide.
- The impact of tariffs on supply chain operations is significant: Companies face higher landed costs, shifting supplier bases, and rising operational complexity.
- Finance teams must act fast: To stay resilient, CFOs need real-time spend visibility, forecasting tools, and automation to support faster decision-making.
- Diversification is crucial: Businesses are minimizing tariff exposure by shifting sourcing to countries with more favorable trade agreements and leveraging multi-entity strategies.
- Digital transformation is a game-changer: Automated accounts payable, procurement software, and global mass payment systems like Tipalti help reduce cost, improve compliance, and enhance agility.
- Real-world impacts are already visible: Companies like Walmart and Apple are adjusting pricing, devising new supply chain strategies, and considering changes to production and sourcing locations in response to changing tariffs.
- Agility is the new advantage: Finance and procurement teams that build tariff-resilient operations are better positioned to reduce tariffs’ impact on supply chain costs and performance.
Understanding Today’s Global Supply Chain Landscape
A supply chain spans from sourcing suppliers to fulfilling orders for products or services. It encompasses systems, raw materials, suppliers and vendors, distributors, retailers, and logistics companies that deliver goods and services. Some companies sell end products directly to their customers, bypassing the middlemen. Traditionally, the supply chain used by businesses has been global.
Businesses import parts for production and as end products from different countries with lower labor costs because manufacturing costs less in some countries outside the United States. Manufacturing shifted from the U.S. to countries like China decades ago. President Trump believes that enacting tariff changes could eventually bring some manufacturers back to the United States through reshoring.
A Global Tariff Landscape in Flux
With uncertain global tariffs constantly changing, policy volatility is a short-term and long-term challenge for businesses with international procurement that import goods for internal use or resale. Global tariffs are taxes or duties a country’s government imposes on goods imported from other countries, paid by the importer.
In the short term, companies must analyze potential geographic shifts in sourcing and substitute suppliers to avoid the highest tariff levels. The tariff shift requires agility, flexibility, and real-time spending analysis to minimize future supplier cost increases and identify opportunities for internal cost reductions.
Tipalti’s Vice President of Finance, Alex Cedro, comments on the long-term and short-term implications of tariff uncertainty:
With erratic policy shifts, it’s difficult to understand how this will play out in the long term. But in the short term, organizations still have to manage their financials and shift their strategic focus to the numbers they can control—expenses and overall spend. Reverting to the pandemic playbook, many companies will need to focus on driving efficiency and cutting costs once again, which means taking a critical look at their forecasts and data to determine what will drive the highest ROI now without stunting future growth.
— Alex Cedro, VP of Finance, Tipalti
Changing Tariff Rates
Examples of recent and pending tariff changes include the U.S.-China and EU-US steel and aluminum tariffs.
Changes in tariffs include:
- 10% baseline tariff on most imports into the U.S. from various countries
- 25% tariff on foreign-made vehicles
- 25% tariff proposed for smartphones sold but not produced in the United States
- Sector-specific tariffs on semiconductor products are expected in the second half of 2025
- Changing announced and negotiated China tariff rates and implementation dates
- Negotiations for EU, Mexico, and Canada tariffs with those countries
- Continuing tariff negotiations with other countries
In April 2025, the White House announced new tariffs, including a 10% baseline tariff on most imports, higher reciprocal tariffs targeting specific countries, and a 25% tariff on foreign-made vehicles. Many countries, including China, the EU, Mexico, and Canada, are currently negotiating solutions with the U.S. for the latest 2025 round of tariff rate changes.
China 2025 Tariffs
On April 12, 2025, the U.S. announced it would exempt smartphones, computers, and electronic parts from “reciprocal” Chinese tariffs. However, these goods imported from China are still subject to a 20% tariff related to fentanyl. And there’s more to consider about these international trade tariffs.
Regarding this China tariff smartphone and computer exemption, according to the April 12, 2025, PBS article:
According to a PBS report published on the same day, U.S. Commerce Secretary Howard Lutnick clarified that this exemption is temporary. In an interview with ABC’s This Week, he stated that electronics would likely fall under new sector-specific tariffs on semiconductor products “in probably a month or two.”
Earlier in April, as part of a broader trade war escalation, the Trump administration raised tariffs on Chinese imports to a peak of 145%. Following initial U.S.-China trade meetings in mid-May 2025, the U.S. adjusted and lowered those rates to 30%, reflecting ongoing renegotiations between the two countries.
EU 2025 Tariffs
As a negotiating tactic for stalled trade talks with the EU, on May 23, 2025, U.S. President Donald Trump imposed a 50% tariff rate on EU goods imported into the United States, initially set to take effect on June 1, and later extended to July 9, 2025. In further negotiations, the 50% EU tariff rate could be reduced to a lower percentage.
Canada and Mexico Tariffs
Negotiations on new Trump tariff rates are continuing. The impact of higher Canadian tariffs on the U.S. includes lumber costs for construction and other key items imported into the United States. Mexico tariffs primarily affect the food supply for items such as avocados, tomatoes, and other produce, which will be passed on to U.S. consumers as higher costs in grocery stores.
The U.S. has existing free trade agreements with its trading partner neighbors, Canada and Mexico. In July 2020, USMCA (United States-Mexico-Canada Agreement) replaced NAFTA (North American Free Trade Agreement) as a trade agreement between the United States, Mexico, and Canada.
Tariff Ripple Effects
Tariffs have ripple effects, including increased business costs for products and parts, which result in customer price increases and inflation. Inflation is considered by the Fed when setting interest rates. High interest rates and higher prices reduce B2B and consumer spending, while increasing business costs, thereby lowering business revenues and profitability. Trade tensions, such as tariffs, cause currency volatility, which impacts exchange rates and increases foreign exchange costs.
When assessing tariff impacts, businesses must decide whether to pass on all or part of the cost increases from tariffs by adjusting prices. If they absorb some of the costs, it lowers profitability. Alternatively, raising prices too high may reduce customer demand and sales revenue.
Walmart Announces Expected Price Increases as Tariff Ripple Effect
On May 15, 2025, in Walmart’s first quarter 2026 earnings conference call with Wall Street analysts and shareholders, the company’s CEO, Doug McMillon, announced that Walmart intends to raise customer prices in response to tariffs.
The immediate challenge is obviously navigating the impact of tariffs here in the US. I want to thank President Trump and Secretary Bessent for the progress made recently. We’re hopeful that it leads to a longer-term agreement between the US and China that would result in even lower tariffs. We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins.
— Doug McMillon, CEO, Walmart
Walmart has delayed price increases by purchasing more inventory ahead of tariff imposition, but this inventory is being depleted through ongoing merchandise sales. Tariff impacts will result in increased Walmart pricing as replacement goods are ordered through the supply chain.
Reduce the impact of tariffs on your supply chain with smarter procurement
Global tariffs are shifting fast—procurement teams need agile tools to stay ahead. Gain full visibility and control to reduce the impact of tariffs on supply chain operations and costs.
Real-World Impact of Tariff Changes on Sourcing and Manufacturing
Tariff changes have real impacts on U.S. companies’ sourcing and manufacturing. Financial and procurement consequences include higher landed costs, geographic sourcing shifts, longer lead times, and supplier renegotiations to mitigate potential cost increases.
Significantly higher tariffs affect costs by imposing new import fees. This cost surprise can cause delays and disruptions in the flow of imported goods and order cancellations by customers. Renegotiations with existing suppliers may result in changes to pricing and credit terms, as well as related delays in product shipments.
With tariffs increasing in specific countries, companies are seeking alternative sources of products from suppliers in different countries with more favorable trade terms to reduce costs. Businesses experiencing sourcing changes to other regions must onboard new alternative suppliers with local currencies, banking details, and payment networks.
Case Study: Apple -Tariff Impacts Related to International Production
Apple is a case study example of a company that must decide where to shift its production locations and possibly the sourcing of components in response to changing tariff rates.
According to a recent CNBC article, in the first quarter of 2025, China represented 80% of Apple’s production capacity. Currently, 10-15% of iPhones are assembled in India, with an expected 15%- 20% by the end of 2025, bringing the country closer to reaching Apple’s 2023 target of 25% India production. Apple produces 20% of iPads and 90% of wearable devices, such as the Apple Watch, in Vietnam.
Apple began shifting iPhone production from China to India in 2023 to comply with India’s local tech production initiative and its friendlier trade relations with the U.S. compared to China. Apple could respond to country-based tariff changes in 2025 by optimizing geographic decisions for iPhone production and component sourcing.
Because Apple hadn’t announced reshoring plans to move production of iPhones from overseas back to the U.S., on May 23, 2025, President Trump announced a new at least 25% tariff for Apple iPhones (and Samsung phones) sold in the U.S. that are made outside the United States. According to this CNBC article published May 23, 2025, Wall Street analysts estimate that the price of iPhones sold would increase by 25% if some production were to move from China or India to the U.S. in response to increased tariffs.
Apple needs to assess the impact on costs for reshoring products back to the U.S. when making future supply chain management decisions. Another consideration for the decision is the availability of sufficient U.S. engineers required for U.S. iPhone manufacturing.
Building a Tariff-Resilient Finance Operation
In this uncertain and changing tariff environment, businesses must work towards building a tariff-resilient finance operation. Finance teams require scenario planning tools and supply chain visibility platforms to facilitate effective global supplier management and efficient payouts. Their supply chain strategies need to be modified in response to the changing U.S. trade policies, which include higher tariffs.
Finance Team Tariff Challenges
New tariff charges and supplier price increases, which result from passing on tariff costs, make invoices more complex. A manual AP system may increase the accounts payable team’s workload and cause more errors. Businesses also add administrative overhead when managing tariff compliance, tracking costs, and potentially applying for exemptions.
Tariffs impact working capital and cash flow management. Businesses may need to delay payments due to cash flow issues or negotiate longer payment terms with their suppliers. They need better visibility of cash flow requirements.
Solutions for a Tariff-Resilient Finance Operation
Digital transformation systems with functionality for global digital payments and automated supplier management are key in building a best-in-class finance operation with agility to respond to rising tariffs in a global economy.
Changing tariffs necessitate trade finance solutions and automation software that improve cash flow, increase efficiency, enhance visibility, and reduce errors.
Tipalti provides AP automation, including self-service supplier onboarding and communications for invoice-based purchases from suppliers. Tipalti also offers mass payments software for global digital payouts.
These Tipalti finance automation software products help companies attain agility in switching and onboarding new suppliers. Tipalti provides users with visibility to analyze business spending in near real-time, identify suppliers’ current locations to determine tariff effects, and reduce costs. It also gives suppliers cash flow requirements for planned batch payments.
Mass Payments Solution for Digital Platforms
Tariffs, interest rates, and currency volatility are reshaping how digital platforms operate, especially those making mass payouts to global freelancers. Finance agility is now essential to staying competitive.
Unlike certain industries that rely on cross-border imports, service-based platforms don’t ship physical goods. They export influence, code, content, and ideas, and in return, these companies pay out millions of freelancers around the world. Although import tariffs make for interesting political fodder, today’s digital platforms that contract freelancers, like creators, affiliates, gamers, sellers, and artists, will feel tariff pain in different ways, such as:
- Global monetary changes that are impacting spending and emphasizing the importance of a diverse and satisfied payee network
- Currency volatility and new compliance requirements as countries crack down on cross-border payments.
- Unpredictable revenue cycles that highlight the need for efficient finance operations and faster freelancer payouts.
If your company is platform-based, this isn’t just macro noise. It’s a changing business environment where the most agile companies will outperform.
– Rob Israch, President of Tipalti
Best Practices to Minimize Tariff Impact on Supply Chains
As global trade policies shift, finance leaders are taking proactive steps to strengthen supply chain resilience. A March 12, 2025, CFO Dive article cited Gartner research showing that:
“Many CFOs are already updating supply chain risk assessments, among other steps. Forty-eight percent of finance leaders are working on alternative component and raw material sourcing, and 41% are reevaluating their supply chain network design.“
In a related CFO Dive survey, 56% of CFOs cited building business resilience and continuity as their top priority. Of those, 30.4% believe the key to achieving that goal lies in adopting new technologies. CFOs are updating financial risk assessments, improving forecasting and scenario planning, and adjusting pricing strategies to remain competitive.
Tipalti Co-founder and CEO Chen Amit describes this shift as the rise of the “Future CFO,” noting:
CFOs are shifting from a supportive, number-focused role to one that uses strategic capabilities to assess and form business models and adopt new technologies.
– Chen Amit, Co-founder and CEO, Tipalti
New Technology Best Practices
As tariffs and trade regulations shift, businesses must stay agile. Leveraging the right technology helps streamline operations, cut costs, and strengthen supply chains through standardized data, centralized vendor communication, and automated payables.
1) Standardize Data
Finance automation software, such as AP automation software, mass payments software, and Procurement software, streamlines payables, payouts, and purchase requisition intake to automatically-created purchase order processes and prevent bottlenecks. Data for your business is standardized with a clean vendor master file that syncs with the integrated ERP or accounting system. Data syncs between AP automation and your ERP system.
2) Centralized Vendor Communication
Vendor communication is always important, but it becomes even more essential when tariffs are in flux. Tipalti provides a supplier hub for centralized vendor communications and payment status for payables.
3) Automate Payables
Automating payables with Tipalti AP automation software provides businesses with several benefits, including:
- Increased agility to respond to tariffs
- Easy supplier onboarding of new vendors
- Enhanced efficiency
- Financial controls and global compliance
- Simple global payments to different countries
- Reduced costs
- Improved spend visibility for decision-making
- Audit trail
AP Automation Benefits
Tipalti accounts payable automation provides the most comprehensive global AP capabilities to help businesses navigate uncertain times, such as changing tariffs. It supports supplier diversification. Tipalti AP automation reduces costs through lower operational overhead, enhances spend visibility, enables the elimination of wasteful spending, and strengthens financial and fraud controls.
Tipalti AP Automation Functionality
AI-driven Tipalti AP automation software guides suppliers for self-service onboarding. It digitally captures invoice headings and line items using AI, and performs streamlined invoice processing through approvals, global payments, and instant payment reconciliation, syncing with your ERP.
In self-service onboarding, suppliers digitally complete a W-9 or W-8 form, select their preferred currency, and choose from one of 50+ payment methods, providing their payment details. Tipalti supplier and payee onboarding supports 27 languages.
Tipalti software automates global regulatory compliance. Tipalti AP automation applies over 26,000 payment rules, utilizes TIN matching for supplier validation, and employs fraud detection to minimize fraud and reduce errors by 66%.
Tipalti AIâ„ enables you to ask queries and receive answers about your business spend, allowing you to make informed decisions about potential cost-cutting.
Tipalti Multi-FX and FX Hedging products enable you to centralize global payments to over 200 countries with advanced foreign exchange (FX) solutions. These solutions allow for centralized payments for multiple entities and include built-in FX management tools.
Your business can optimize its supply chain with Multi-Entity functionality (utilizing Tipalti and your multi-entity ERP integration) to source goods through an entity located in a region with lower tariffs, and handle the resulting inter-company payments within Tipalti.
Strengthening Supply Chains Through Financial Agility
A proactive financial strategy is key to mitigating tariff shocks. By acting quickly to minimize supply chain disruptions and associated costs, you can mitigate tariff shocks. Tariff shifts are reshaping cost structures and supplier relationships.
Tariffs have financial and operational consequences that require businesses to be financially agile, reduce costs, and devise tariff-related strategies. With the right software tools, finance and procurement teams can build tariff-resilient supply chains.
Tipalti offers a unified finance automation software platform with AP automation, procurement, and mass payments software products. Integrated with real-time, multi-entity ERP or accounting software, Tipalti gives your business real-time spend and supplier visibility (by entity and combined) for informed decision-making.
Take the first step toward a tariff-resilient supply chain—explore Tipalti’s procurement and finance automation solutions today.
