Building a Resilient Supply Chain: Dynamic Sourcing Strategies to Counter Tariff Risks

Based on the ongoing changes in the current global trade environment, leading companies are developing new sourcing strategies to manage costs and risks introduced by tariffs. The Infor Nexus supply chain platform is helping global companies respond and react quickly to the dynamic environment, by enabling intelligent, adaptive supply chain sourcing and execution strategies.

Is The New Norm Escalating Tariffs and Trade Wars?

Increases in U.S. tariffs on its major trading partners are forcing companies to adapt to the rapidly changing circumstances.  Many industry participants initially viewed the tariff threats as political positioning; however recent action by the U.S. involving Mexico, Canada, and China suggests an increasing reliance on tariffs and trade policy measures to manage trade imbalances.  Future trade tariffs could target any country with a significant trade deficit with the U.S., including the E.U., Japan, Vietnam, Ireland, South Korea, Taiwan, Thailand, and India.  This pattern suggests that trade tariffs may continue to be a shaping factor for global supply chains.

The Keys to Success: Plan, Replan, and Execute

Global corporations spent the latter part of 2024 planning sourcing scenarios without knowing the extent or impact of the new U.S. administration's trade policy changes.  With the recent U.S.  imposed tariffs, these companies are realizing that they need to operate in a dynamic supply chain planning and execution cycle that is flexible and adaptive to the changing environment. 

Traditional supplier networks that rely heavily on a single region, such as China, are vulnerable to disruptions and rising costs.  In response, many organizations are embracing dynamic sourcing strategies—including nearshoring, reshoring, and friendshoring—to build resilience and maintain cost efficiency. 

Infor Nexus provides the financial and operational levers required to navigate these shifts seamlessly. By leveraging real-time supply chain insights, flexible supplier liquidity vehicles, and supplier onboarding support, businesses can make sourcing decisions dynamically rather than reactively.

The Shift Away from China: A Growing Trend 

Figure 1: Infor Nexus orders (calendar year 2023 and 2024) 

Trade flow data extracted from Infor Nexus highlights a clear trend: companies are already diversifying their supplier base away from China. Figure 1 illustrates the shifting sourcing patterns over the last few quarters showing increased imports from regions such as Southeast Asia, Mexico, and India. This strategic diversification may accelerate due to additional tariff increases stemming from retaliatory counter measures. However, shifting suppliers is not just about finding alternate sources of supply —it’s about ensuring that supply chain transitions are both cost-effective and sustainable. Companies that rely on static, legacy sourcing models often struggle to pivot quickly, leading to costly disruptions and inefficiencies. 

Why a Responsive Supply Chain Is Critical

Figure 2: Inventory to Sales index of representative US Fashion Brands (Source: S&P Capital IQ)

Other companies have responded to trade uncertainty by stockpiling inventory ahead of tariff hikes (as shown in Figure 2). While this provides short-term protection, it ties up working capital and increases holding costs. A more effective long-term strategy is to create a responsive supply chain where sourcing changes can be made dynamically, in real time, as tariffs and trade policies shift.

Infor Nexus enables companies to achieve this by providing:

• Real-Time Spend Visibility: Organizations can track procurement spend by region and supplier, identifying potential cost risks before tariffs take effect.
• Supplier Onboarding and Transition Support: Rapidly integrating and switching to alternative suppliers across different regions, while maintaining a seamless supplier experience across all sourcing regions.
• Supply Chain Financing Solutions: Helping new suppliers in emerging economies tap into a multi-funder network and gain access to working capital, reducing onboarding friction and improving supplier reliability.
• Predictive Analytics and AI-Driven Insights: Anticipating disruptions and optimizing sourcing strategies in response to shifting market conditions.

The Rising Costs of Inaction 

Trade policies are evolving rapidly, and failure to adapt could mean significant cost increases. New U.S. tariffs, changes to de minimis trade rules, and the potential for reciprocal tariffs can all add layers of complexity. Importers that delay their response may find themselves caught in a cycle of reactive decision-making, higher costs, and disrupted supply chains.

Infor Nexus provides a clear pathway out of this uncertainty by enabling businesses to take a proactive approach with a unified platform that delivers end-to-end supply chain intelligence.
By leveraging AI-driven insights, companies can assess supply chain risks and dependencies, identifying exposure to tariffs before they impact costs. Infor Nexus enables businesses to strategically refine supplier portfolios, evaluating alternative sourcing locations based on a combination of cost efficiency, risk mitigation, and supply continuity.

With seamless supplier onboarding and transition capabilities, organizations can quickly integrate new suppliers while maintaining compliance and operational readiness. Additionally, flexible financing solutions ensure that emerging suppliers have access to working capital, reducing payment risks and accelerating time to market.

Conclusion 

In an era of increasing tariffs and geopolitical uncertainty, businesses must move beyond traditional, static sourcing models. By leveraging Infor Nexus, companies can transition toward a more responsive, financially optimized supply chain that dynamically adjusts to evolving trade conditions. Learn more about Infor Nexus here.