How procurement strategies evolve amid global tariff turmoil

Event Overview

In 2025, global tariff policies continue to fluctuate, trade friction between China and the US escalates again, and many countries adjust their import tariffs. This not only directly increases procurement costs but also profoundly changes companies' procurement decision-making logic. At the 2025 CPO Summit jointly held by EY and the Women's Business Enterprise National Council (WBENC), over half of the surveyed procurement executives indicated that their organizations have been directly impacted by tariffs.

Supply Chain Background

Global procurement systems are highly interconnected, and tariff changes can be transmitted through multi-tier supplier networks. Traditionally, companies rely on low-cost manufacturing centers such as China, but tariff barriers prompt a restructuring of procurement cost structures. In the industrial chain, raw material sourcing, parts manufacturing, finished product assembly, and distribution are all affected. For example, in the consumer packaged goods (CPG) industry, complex product formulas and diverse packaging components make it particularly difficult to trace back to third- and fourth-tier suppliers; in the healthcare industry, strict regulatory and quality certification cycles prevent rapid supplier switching.

Corporate Decision-Making Logic

Enterprise responses to tariffs exhibit a layered pattern:

1. Data-Driven Decision-Making: The primary pain point for companies is the lack of transparency in supplier data. CPOs report that the biggest challenge lies not in their own data, but in suppliers' data. As a result, companies are establishing 'tariff data rooms'—a centralized repository of supplier information, combined with freight cost models, to simulate total cost of ownership (TCO) under different tariff scenarios. This model requires collaboration among finance, legal, operations, and global trade departments.

2. Response to Supplier Pricing Behavior: After tariffs are implemented, domestic suppliers often raise prices to just below the adjusted import cost level, weakening or even eliminating the cost advantage of localized procurement. Companies are forced to reassess procurement timelines, contract terms, and inventory strategies, such as expanding global sourcing scope and leveraging free trade zones.

3. Industry-Specific Strategies: The technology industry strengthens operations through multi-node manufacturing hubs and aggressive supplier diversification; the healthcare industry exhibits fragile resilience due to single-source dependencies and high compliance barriers; agriculture and construction face both export restrictions and domestic material shortages, amplifying tariff pressures.

Supply Chain Impact- Supplier Management: Tariffs force companies to increase visibility into multi-tier supply chains. CPOs are shifting from relying on supplier self-declarations to requiring digital traceability, even embedding third-party audits. - Procurement Costs: Tariffs directly increase import costs, while domestic suppliers' price following makes TCO calculations more complex. Companies need to dynamically assess effective tax rates across sourcing countries. - Inventory Levels: To mitigate future tariff risks, some companies increase safety stock, especially for critical materials, but this pushes up holding costs. - Manufacturing Collaboration: Tech companies accelerate the relocation of assembly to Mexico, Vietnam, etc.; healthcare companies, due to long certification cycles, can only bear cost pressures in the short term. - Supply Chain Resilience: Building multi-sourcing, nearshoring, and regional redundancy becomes a common goal, but the speed of implementation varies by industry.