Unpredictable Tariff Rules Rattle Supply Chain, Experts Say
'Tariffs Have Taken Most of the Air Out of the Room'
Key Takeaways:
- Trump has used tariffs as a cornerstone of a trade agenda focused on correcting what the White House views as trade imbalances with other nations.
- The tariff war has placed renewed focus on moving manufacturing closer to the United States.
- But sourcing raw materials — such as alumina, or aluminum oxide — can be a challenge even if companies locate factories stateside.
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OXON HILL, Md. — Supply chain experts detailed the lack of predictability and need for flexibility that President Donald Trump’s tariff-focused trade war has created for shippers, especially as the president has adopted a scattered approach to enacting and then delaying the levies.
“Tariffs are meant to do several things, but the key thing that they are known to do is reorient sourcing,” said Andrei Quinn-Barabanov, supply chain and risk management leader at Moody’s, during the 2025 Edge Supply Chain Conference & Exhibition, hosted Oct. 5-8 by the Council of Supply Chain Management Professionals. “But that’s not easy because nothing has been really carved in stone, or nothing has been really even written in clear numbers on paper at this point. So making any sourcing decision is just — it’s really impossible.”
Trump has used tariffs as a cornerstone of a trade agenda focused on correcting what the White House views as trade imbalances with other nations. The upshot has been a string of ongoing negotiations and a patchwork of tariff policies that have kept many across supply chains off balance, Quinn-Barabanov noted. Specifically, he said the tariff situation has made demand planning and sourcing more difficult. He recalled hosting roundtables earlier in the year when participants struggled to move on from tariffs to other topics.
“Tariffs, I think, have taken most of the air out of the room this year,” he said. “We really depend on our suppliers doing a good job. That’s the most fundamental risk. Do they deliver, how’s the quality, is it on budget, all those basic questions.” Amid the uncertainty created by tariffs, he noted, “We have seen some new risks.”
Quinn-Barabanov says the tariff situation has made demand planning and sourcing more difficult. (Connor D. Wolf/Transport Topics)
The tariff war has placed renewed focus on moving manufacturing closer to the United States, noted Michael Castagnetto, president of North American surface transportation at C.H. Robinson. “Supply chains have been moving for many years before the tariffs,” he said. “There’s obviously a shift in nearshoring over the last 10 to 15 years that has moved a tremendous amount.”
He discussed a common strategy known as “China Plus One” where companies would locate manufacturing in China and one more country to ensure diversification. Post-COVID, some of that additional manufacturing focus has shifted to places like Southeast Asia and Mexico.
“A lot of companies moved from China to Vietnam, and then during the initial round of tariffs Vietnam had higher tariffs than China did,” Castagnetto said. “So a lot of folks who had done the China Plus One strategy found themselves in a worse spot than they would’ve been had they just stayed in China. So, what we’re trying to do with customers is do a lot of scenario planning of, ‘What does your current supply chain look like?’ ”
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Castagnetto noted it can take years to establish production in a country, creating natural concerns if costs suddenly spike for one supply source.
“Our CEO has actually been relatively vocal about this,” said Chelsea Morris, vice president of global inbound transportation at Dollar General. “We’re relatively insulated because we have a fairly small amount of imported product relative to the competition. Now, obviously, the market has some options — there’s moving to a different sourcing location, making sure that the move offsets the instability. Obviously, working with your vendors.”
Trump under Section 232 of the Trade Expansion Act doubled tariffs on imported steel and aluminum to 50%. The law permits a president to enact tariffs in situations deemed necessary for national security due to unfair trade practices. Trump maintains the move was necessary to protect the U.S. steel and aluminum industries. But economic realities of sourcing these metals from other countries have hit U.S. manufacturers, said Michael Sekula, vice president of global supply chain management and safety at InPro.
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“The United States buys 80% of their aluminum from Canada,” he noted. “It impacted everybody in the United States, so it’s still a fair playground. What it did change was, you can’t import finished aluminum cheaper than you could manufacture in the United States.”
Trump’s stated goal with many of the tariffs is to return manufacturing to the U.S., but Sekula noted that sourcing raw materials — such as alumina, or aluminum oxide — can be a challenge even if companies locate factories stateside.
“The administration is trying [with] tariffs to bring back manufacturing,” Sekula said. “We were importing aluminum products from China, and a lot of that did come back to the United States and is being manufactured locally. However, the alumina is the issue at hand. We don’t make alumina — or enough of it — in the United States. I think we make 10% of our own need of it in the United States.”
