Navigating the Tariff Storm Part II: How 2025 Tariffs Are Reshaping Strained Global Supply Chains

By David Teeple & Daniel Hyla

Global supply chains, while perhaps slightly less pressured than the peak crisis years (2021-2022), remain complex and vulnerable to disruptions (geopolitics, labor issues, weather). The Global Supply Chain Pressure Index (GSCPI) is easing, but challenges persist. In April 2025, the GSCPI showed a continued easing of global supply chain pressure, with the index at -0.1841, down from 0.0134 in March. There is, however, a major new factor significantly impacting supply chains in 2025: the implementation of sweeping new tariffs, particularly by the U.S. administration. Tariffs are not just adding costs but are actively interacting with existing vulnerabilities, forcing rapid strategic shifts, increasing uncertainty, and creating significant disruptions across industries.

Unlike some previous targeted tariffs, the 2025 U.S. tariffs are broad & volatile. The stated goal of implementing these tariffs is to rebalance global trade in favor of the U.S., which has, over time, introduced national security concerns and has hollowed out manufacturing in the U.S.¹ Previous administrations have attempted to gradually get the pendulum to swing back in the U.S.’s favor, but have been unsuccessful in doing so. On the complete contrary—the current administration has implemented widespread tariffs not long after taking office in April 2025.

A baseline 10% duty was initiated on almost all imports from most countries, and for a discrete sub-set of countries – ones with larger trade deficits – more aggressive duties have been leveraged. Many countries have quietly accepted (at least in the short term), the increase in duties, but others such as China, Hong Kong, and Macau have aggressively stood firm and, in some cases, implemented steep reciprocal tariffs on U.S. products, creating an ever-evolving trade war. The trade-war took a positive turn on Monday, April 12^th as the U.S. and China (the two largest global economies) agreed to mitigate steep reciprocal tariffs for 90-days,² which has allowed both countries to temporarily loosen up trade tensions.

Historically, tariffs have acted as significant friction points in global supply chains, but with the ongoing Trade War and heightened uncertainty, such friction points are becoming increasingly widespread. They introduce delays, increase costs unpredictably, and create a climate of uncertainty that severely hampers a business’s ability to forecast demand, manage inventory efficiently, budget accurately, and make confident strategic plans.

How do you react? Or, ideally, proactively plan to combat tariffs?³ At a macro level – looking at network redesign, strategic sourcing shifts, inventory adjustments, negotiating with suppliers (sharing tariff burden), revisiting pricing models, investing in technology (AI & digital twins) can open up opportunities to mitigate tariffs. In addition, you can try mapping your supply chain, identifying vulnerabilities (including sub-tier suppliers), enhancing flexibility, staying informed on rapidly changing policies, as well as maintaining strong communication with partners. On the micro level – one of the quickest and most effective opportunities is to implement a Labor Management System (LMS) which typically offers a payback of less than a year, investing in Automation and leveraging robots as a service which can be acquired as a OpEx (vs. traditional CapEx), and holding inventory in a Foreign Trade Zone (FTZ) or a bonded warehouse offer opportunities to defer, lessen, or in some cases eliminate duties.

2025 tariffs are a major force actively disrupting already stressed global supply chains, going far beyond simply increasing costs. The main consequences are volatile costs, urgent sourcing shifts, potential shortages, and increased operational complexity. Navigating this tariff landscape is a critical challenge for businesses in 2025, demanding agility and strategic foresight. The final impact on businesses and consumers depends on how long these measures last and how companies adapt.

Sedlak recognizes the complexities surrounding tariffs and their ripple effects on global supply chains. Beginning Thursday, May 15, we will provide weekly updates and summaries of the evolving tariff landscape, equipping you with the timely insights you need to lead and respond with confidence.

Let Sedlak assist you in addressing these challenging times. With over 65 years of experience advising industry leading organizations, Sedlak will help address the challenges of today and prepare you for an ever-evolving future. Reach out to Dave Teeple at dteeple@jasedlak.com or Daniel Hyla at dhyla@jasedlak.com for more information.

Don’t forget to register for our upcoming virtual events! Revolutionizing Supply Chains: The Power of Swisslog Goods-to-Person Warehouse Automation – A Sedlak Virtual Event is scheduled for Wednesday, June 11^th.

Continue Reading the Series!

Navigating the Tariff Storm Part I

Navigating the Tariff Storm Part III

Sources

1. “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits” – www.whitehouse.gov
2. “Joint Statement on U.S.-China Economic and Trade Meeting in Geneva” – www.whitehouse.gov
3. “Ways to Mitigate the Impact of Tariffs” – www.jasedlak.com