Business Decisions About the Coming Tariff Changes
Our team at Convictional has been tracking a major shift in US trade policy that will impact any business relying on international supply chains. With proposed tariffs of 20% on foreign goods and 60% on Chinese imports, companies need to start planning now for significant changes to their cost structure and operations.
We've spent the last year helping teams make better business decisions through structured collaboration. Now, we're applying those learnings to help companies navigate what could be the most significant supply chain disruption in recent history. We're building a Tariff Impact Assessment tool to help businesses systematically evaluate and respond to these changes.
When facing tariff changes of this magnitude, businesses need to make a series of interconnected decisions. We've identified key decision points and potential options that every impacted business will need to address:
Cost Structure Impact:
- Direct cost increases on goods (20-60%)
- Margin compression risks
- Price elasticity considerations
- Cash flow implications
- Secondary impacts on logistics and compliance costs
Supply Chain Impact:
- Supplier diversification options
- Nearshoring vs reshoring tradeoffs
- Product redesign opportunities
- Timeline constraints
- Risk mitigation strategies
With these impacts in mind, businesses will likely need to consider a series of interconnected decisions:
Pricing Strategy Decisions:
- Which costs can be passed through to customers?
- How to adjust pricing by channel and customer segment?
- What timeline minimizes market disruption?
- Where can product bundling or positioning changes help absorb costs?
- How to communicate changes to maintain customer relationships?
Supplier Evolution Decisions:
- Which suppliers need immediate diversification?
- Where can production be relocated?
- How to prioritize supplier transitions based on exposure?
- What supplier capabilities are must-haves vs. nice-to-haves?
- How to maintain quality standards during transitions?
- Which existing supplier relationships could be expanded?
Product Strategy Decisions:
- Which products need redesign to reduce costs?
- Should any products be discontinued?
- Where can specifications be adjusted without impacting quality?
- What new products could be introduced to offset impacts?
- How to sequence product changes to minimize disruption?
- Which products justify increased localization investment?
Operations Decisions:
- How to sequence supplier transitions?
- What inventory buffer is needed during transitions?
- Which internal processes need adjustment?
- How to maintain service levels during changes?
- What new capabilities need to be developed internally?
- How to adjust forecasting and planning processes?
Making these decisions in isolation isn't enough - they need to be coordinated across the organization with complete context. Our product doesn't just provide a framework for these decisions - it enriches them with your business context. The platform integrates with your existing systems and knowledge bases, pulling in crucial data like:
- Current supplier costs and terms
- Customer contracts and pricing agreements
- Historical pricing data and elasticity metrics
- Inventory levels and turnover rates
- Quality metrics and supplier performance history
- Product margin and contribution analysis
- Customer segment profitability data
- Team meeting transcripts
- Company policy documentation
When making these decisions, both your team and the AI-features in our product can leverage this connected business context. For example, when evaluating supplier alternatives, the system can surface relevant supplier performance history, compliance requirements, and capacity constraints. This context-aware approach helps teams make better decisions faster and with a wider lens of consideration.
The impact of having complete context is significant. In our own use of the product, we've found that AI assistance in our product regularly surfaces important considerations that teams might otherwise miss. For instance, when evaluating supplier transitions, our AI might flag seasonal capacity constraints or regulatory requirements that could impact timeline planning.
The platform creates a living workspace where these decisions can be tracked, revisited, and refined as conditions change. Teams can collaborate asynchronously, building on each other's insights and maintaining a clear record of decision rationale. This becomes especially valuable when implementing complex changes like tariff mitigation, where coordination across departments is crucial.
Our analysis shows that successful tariff mitigation will require a combination of strategies - no single approach will be sufficient. Teams that can systematically evaluate options and make coordinated decisions will be best positioned to navigate these changes.
We believe the analysis and planning associated with the coming changes to be urgent. By leveraging Convictional you can expect increased rigor with decreased effort and timelines.
Implementation Timeline Considerations:
- Immediate (0-2 months): Impact assessment and quick-win identification
- Near-term (2-6 months): Supplier and pricing strategy implementation
- Medium-term (6-12 months): Product and operational adjustments
- Long-term (12+ months): Strategic repositioning and capability building
The Tariff Impact Assessment tool guides teams through each phase, ensuring that both immediate actions and long-term strategies are considered and coordinated. The tool will help teams:
- Calculate exposure across their product portfolio
- Model different mitigation scenarios
- Make and track key decisions
- Plan implementation timelines
- Collaborate on response strategies
- Monitor progress and adjust plans as needed
We're launching this tool because we believe companies need to start planning now. Policy changes of this magnitude require careful consideration and systematic execution. Having a dedicated workspace for this analysis helps ensure nothing gets missed and all stakeholders stay aligned.
If you're interested in using the Tariff Impact Assessment tool, the first step is a scheduling a conversation with our team. Please complete this onboarding form or email us at tariffs@convictional.com.