Managing Director Americas
In December 1947, 23 nations came together in Geneva to sign the General Agreement on Tariffs and Trade (GATT), cutting over 45,000 tariffs and reshaping nearly 20% of global trade. The message was clear: reducing trade barriers helps unlock economic potential and foster cooperation.
Jump to April 2, 2025—President Trump declared it ‘Liberation Day’ as he announced sweeping new tariffs: a 10% base on all imports, plus country-specific duties reaching a jaw-dropping 54% for China (including the existing 20% plus new 34% tariffs). Markets tumbled immediately… with the Dow Jones Index dropping 1,000 points in response.
Whether these tariffs materialize remains to be seen. Global trading partners are already signaling countermeasures.
A lot is uncertain. But what is clear is that this time round leaders have access to new intelligence and capabilities that can help them simulate, act and sense their way to a sense of stability… and maybe even competitive advantage.
Let’s dive into how AI could help address new tariff challenges.
The new tariff structure, if implemented, will send immediate shock waves throughout global supply networks.
With the baseline 10% plus country-specific rates (34% for China, 20% for the EU, 24% for Japan, 32% for Taiwan), businesses may face massive cost increases virtually overnight.
Many products contain components that cross borders multiple times during production, potentially triggering tariffs at each crossing. Finance teams are struggling to forecast the cascade of costs while suppliers rush to adjust their pricing.
That financial tremor you’re feeling? It’s the global supply chain having a bit of a panic attack.
Adaptive supply network optimization
AI doesn’t just crunch numbers faster—it navigates complexity in ways human minds simply cannot. Think of it as your supply chain’s ‘what if’ superpower, creating ‘digital twins’ of your entire network that can simulate thousands of scenarios before your morning coffee gets cold.
Advanced supply chain analytics powered by AI can model the impact of different sourcing strategies, helping companies reduce logistics costs, improve inventory levels, and enhance service levels.
These systems continuously learn from new data, making them increasingly accurate as tariff details and market responses evolve.
When suppliers hit capacity constraints or costs increase, AI can instantly suggest alternatives, ranked by total landed cost including the new tariff structure. The human supply chain team still makes the final call… but with exponentially better information.
The matrix of baseline, country-specific, and product-specific tariffs creates a compliance headache of unprecedented complexity. Misclassifying products or miscalculating duties can lead to significant penalties, delays, and unexpected costs that destroy margins.
With Customs and Border Protection enforcement expected to intensify, the stakes couldn’t be higher.
Automated classification and documentation
If ever there was a problem screaming for human+machine collaboration, tariff classification is it. Humans struggle with the mind-numbing complexity, while machines excel at precisely this type of pattern recognition and regulatory navigation.
Modern AI doesn’t just match keywords to tariff codes like systems of yesteryear.
Natural language processing and computer vision systems can analyze product specifications, images, and documentation to automatically determine the correct Harmonized Tariff Schedule (HTS) codes with remarkable accuracy.
These systems can process thousands of SKUs in minutes, automatically generating the documentation needed for customs clearance. The result is fewer classification errors and reduced administrative burden, freeing compliance teams to focus on strategic planning rather than paperwork. Human expertise and machine precision leads to higher compliance confidence.
The most challenging question facing executives is how much of the tariff costs to absorb versus pass on to customers and consumers.
This pricing standoff is playing out in boardrooms nationwide.
The calculation is devilishly complex—price elasticity varies across products, competitors have different tariff exposure, and customer segments react differently to price changes. Companies that get this wrong will either bleed profits or hemorrhage market share.
Dynamic pricing intelligence
Pricing decisions in volatile markets showcase the perfect human+AI symbiosis. AI provides computational horsepower and pattern recognition; humans contribute market intuition and relationship understanding.
Today’s pricing algorithms aren’t just calculating optimal price points—they’re learning machines that continuously refine their understanding of how different customer segments respond across product categories. Advanced pricing optimization algorithms can analyze historical price elasticity, competitive positioning, and customer segmentation to recommend optimal pricing strategies across products and customer segments. These systems continuously monitor competitor responses and market dynamics, enabling adaptation as conditions evolve.
The human pricing team still crafts the customer communication strategy, but they do it armed with AI-powered confidence about where they can and can’t push.
The tariff shock disrupts carefully calibrated inventory strategies. Many companies are rushing to import products before tariffs take full effect, while others face the prospect of suddenly overpriced inventory.
Meanwhile, lead times and order quantities are in flux as suppliers adjust to the new reality. Safety stock levels that made sense before tariffs are now either inadequate to cover extended lead times or excessive given higher carrying costs.
Welcome to the tariff-induced inventory twilight zone.
Intelligent inventory recalibration
Traditional inventory systems rely on static rules that shatter when conditions change dramatically. AI-based systems, however, continually evolve their understanding as the landscape shifts—exactly what’s needed in our new tariff reality.
Machine learning algorithms can rapidly recalibrate inventory policies to account for longer lead times, higher carrying costs, and potential supply disruptions. These systems analyze patterns in demand, pricing, and supplier performance to optimize safety stock levels, reorder points, and order quantities.
Unlike traditional inventory systems that assume stable conditions, AI-based solutions can identify subtle shifts in supplier performance or demand patterns and adjust recommendations accordingly.
The magic happens when human inventory managers collaborate with these learning systems… humans providing context and constraints, AI discovering patterns invisible to the human eye.
Perhaps the most profound challenge is making long-term strategic decisions in an environment of extreme uncertainty.
Should companies relocate production? Redesign products? Exit certain markets?
The stakes of these decisions are enormous, but the information needed to make them with confidence is incomplete. And timeframes are unclear.
Strategic planning tools built for stable environments offer little help because they typically assume a single predictable future. That’s not the world we’re living in.
Augmented strategic planning
Strategy under uncertainty demands a fundamentally different approach—embracing multiple futures rather than predicting a single outcome. This is where the human+AI partnership truly shines.
AI doesn’t replace strategic thinking—it supercharges it. Modern scenario planning platforms combine executive wisdom with computational power to navigate complex decision spaces.
Rather than betting everything on a single predicted future, these systems help identify “robust strategies” that perform reasonably well across many possible scenarios.
By continuously monitoring leading indicators identified by machine learning algorithms, these systems provide early warning when the business environment is shifting toward one scenario or another, enabling strategy adjustment before competitors recognize the change.
1. Adopt a mindset of agility and adaptability
The tariff situation will continue evolving for months, if not years. Leaders must embrace uncertainty and prioritize adaptability over perfect prediction.
Move beyond binary thinking (“Reshore: yes or no?”) toward a more nuanced approach: “How do we build flexibility into everything we do?”
This isn’t about becoming a technologist. It’s about approaching problems with intellectual curiosity and a willingness to continuously reassess assumptions.
The leaders who thrive won’t be those who make a single perfect decision, but those who build decision-making machinery (human+AI) that evolves as conditions change.
2. Establish your AI-human collaboration model
2025 is the year of human+machine partnerships. Define now how these capabilities will work together in your organization. Which decisions will be algorithm-driven? Which require human judgment? Who translates AI insights into action plans?
The most effective tariff response teams combine AI’s analytical capabilities with human expertise in strategy, operations, and customer relationships. This requires learning to ask AI the right questions, interpret outputs critically, and know when to override algorithmic recommendations. Think of AI as a thinking partner, not a tool.
3. Create your tariff command center
Centralize tariff intelligence through a dedicated cross-functional team augmented by AI analytics.
Give them clear decision rights, data access, and direct lines to senior leadership. Equip them with AI-powered impact modeling tools that quantify exposure across products, suppliers, and customers.
This isn’t just another committee. It’s an action-oriented team – the nerve center coordinating your response across functions. As a leader, visibly empower this team, remove organizational barriers, and ensure they have both technological and human resources to succeed.
When tariff policies shift again (and they will), you’ll have the organizational muscle to respond at digital speed.
4. Transform your data infrastructure – or at least figure out what you can do with what you have
Your AI is only as good as your data.
Prioritize connecting siloed systems containing product specifications, supplier information, cost structures, and customer data. Deploy AI-powered data cleansing tools to resolve classification inconsistencies.
This isn’t glamorous work, but it’s essential. Organizations with integrated, high-quality data are making tariff decisions in hours that take competitors weeks.
Your data infrastructure in 2025 will either be your competitive moat or your Achilles’ heel. There’s no middle ground.
5. Cultivate emotional resilience in your teams
Let’s acknowledge reality: Navigating tariff disruption takes a human toll. The uncertainty, complexity, and sheer workload create unprecedented stress. Leaders must actively build team resilience.
Create psychological safety for expressing concerns and suggesting solutions.
Use AI tools to reduce mundane analytical burdens, freeing human capacity for creative problem-solving. Celebrate small wins and learning moments.
Remember: How you lead through this challenge will shape your culture long after the tariff situation stabilizes. Your team will remember whether you responded with panic, denial, blame, or purposeful clarity. Choose wisely.
6. Build your scenario planning muscles
The companies merely reacting to tariffs as a compliance issue will struggle. The winners will be those using this disruption to build greater strategic flexibility into their business models.
Use AI-powered scenario planning to develop specific action plans for different potential futures.
Identify investments that create future options—like flexible manufacturing capacity or supplier relationships that can scale quickly if needed. Work with customers to develop shared contingency plans.
The leadership team that emerges from 2025 with enhanced capabilities for navigating uncertainty will have converted a crisis into lasting competitive advantage.
Here’s the thing about major economic disruptions: they rarely eliminate value. They redistribute it.
Some companies will crumble under the tariff burden.
Others will emerge stronger than ever.
The differentiator? Not who had the lowest tariff exposure on Liberation Day. It’s who builds the most effective human+AI partnership to navigate the complexity that follows.
The tariff challenge isn’t primarily computational or strategic or operational. It’s all of these simultaneously… a perfect crucible for forging new ways of working that blend human judgment with machine-driven intelligence.
2025 won’t just be remembered as the year of tariff wars. For forward-thinking leaders, it will be the year human+AI collaboration became mission-critical – not just an experimentation playground.
At the intersection of strategy, emerging technology and innovation Geoff leads our Americas team to craft AI strategy and build innovative AI-powered solutions. With equal amounts of optimism and skepticism, there’s nothing Geoff loves more than a new problem to solve.
