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As tariffs take hold, US-based suppliers and buyers across industries are feeling the strain. Whether you’re a supplier navigating increased costs or a buyer grappling with rising prices, the impact is unavoidable. The key to staying ahead lies in supplier diversification, automation, and seamless B2B integration—ensuring businesses can adapt quickly to shifting supply chains.
This chaos doesn’t just impact cost structures—it threatens business operations, procurement strategies, and digital transformation investments. Diversifying suppliers and leveraging automation can help mitigate these risks, ensuring businesses remain agile even as costs fluctuate. As companies prepare and react, B2B commerce leaders must assess:
- How will tariffs disrupt supplier operations and procurement workflows?
- What cost implications will buyers face as price hikes ripple through supply chains?
- Are my integrated suppliers still offering the most competitive pricing, or should I expand my network to ensure cost efficiency?
- What strategies can my business adopt now to avoid costly disruptions later?
These are critical questions, and businesses that can adapt quickly, improve efficiency, and reduce friction in supplier-buyer relationships will be best positioned to weather the storm.
How Tariffs are Impacting Suppliers
Suppliers face mounting pressure as tariff volatility forces them to rethink pricing, sourcing, and operational strategies. The impact is particularly acute in industries reliant on overseas manufacturing.
Key Challenges for Suppliers:
- Financial Pressures: With some suppliers facing a 25% or more cost increase, profit margins are under enormous pressure. This forces suppliers to make difficult choices:
- Absorb costs and erode margins
- Increase prices and risk lower sales volumes
- Cut investments in non-immediate priorities
- Shift sourcing strategies to minimize exposure
- Production Surges & Logistics Disruptions: Some manufacturers are rushing to increase production and ship goods before tariff deadlines. This “beat-the-clock” approach can potentially lead to backlogs at ports, supply chain bottlenecks, and unpredictable inventory swings.
- Delayed Customer Deliveries & Buyer Retention Risks: Uncertainty over pricing and supply chain disruption has delayed orders, leaving buyers frustrated and business operations in limbo.
How Tariffs are Impacting Buyers
For buyers, tariffs create uncertainty in procurement and cost structures, forcing them to re-evaluate supplier relationships and sourcing strategies.
Key Challenges for Buyers:
- Increased Costs: Just as suppliers grapple with where to manufacture products and associated costs, price hikes across industries force buyers to either absorb higher costs or pass them onto their customers.
- Disrupted Supplier Relationships: Some suppliers are delaying orders or shifting pricing unpredictably, making procurement planning difficult.
- Need for Supplier Diversification: Buyers must assess whether their current suppliers remain competitive or if they should expand their network to ensure cost efficiency.
- Supply Chain Visibility: A lack of real-time pricing and inventory data can lead to unexpected cost spikes and delays.
- Lack of Financial Controls: Maintaining control over spend can be a challenge if sourcing needs to be moved to non-integrated suppliers that provide product outside of impacted zones.
The Impact of Tariffs on Manufacturers & Supply Chains
At first glance, it may seem that tariffs primarily affect importers and exporters—but the ripple effects reach much further.
Take the IT hardware industry as an example. The U.S. share of global electronics manufacturing has declined from 30% to just 5% over the past 25 years, with production heavily concentrated in Asia [Source: IPC and USPAE, 2021]. As a result, the majority of all PCs, phones, and IT equipment are now manufactured outside the U.S.—primarily in China, Vietnam, and other key manufacturing hubs. In recent years, Mexico has also become one of the leading manufacturers of electronic components and assemblies for global markets [Source: AMREP Mexico]. This geographic concentration introduces significant supply chain risks, especially in times of tariff volatility, geopolitical tensions, and trade restrictions.
This isn’t just an IT industry problem—manufacturers in automotive, industrial equipment, and electronics are all navigating the same challenges:
- China produces 34% of the 69 million cars that are manufactured worldwide each year vs. 15% in North America. [Source S&P Global Mobility]. And Mexico is the world’s 8th largest car exporter, with over 80% of the vehicles it produces heading to the United States. [Source: AMREP Mexico]
- In 2021, China, Germany, and Japan were the powerhouses of the machine tool industry worldwide. That year, China accounted for 31 percent of the world’s machine tool production, while Germany and Japan each accounted for 13 percent. [Source: Statista]
- China was the leading electronics exporter in 2023, commanding more than 25% of all electronics exports. The U.S. managed to come in fourth (5.9%), behind Hong Kong (9.7%) and Taiwan (6.5%). [Source: International Trade Centre]
How B2B Integrations Can Help Mitigate Tariff-Driven Uncertainty
For suppliers integrated with their buyers and actively managing connected commerce programs, these disruptions raise critical questions:
How can we (suppliers) respond quickly as new buyers seek to integrate and leverage product sources outside of tariff-impacted zones?
Tariff volatility is driving businesses to rethink sourcing strategies. Suppliers that can rapidly integrate with new buyers will gain a competitive edge, while buyers that can quickly onboard alternative suppliers will minimize disruption.
Is now the time to accelerate integrations?
With cost pressures mounting, suppliers must find ways to offset rising expenses. Integrating with buyers reduces manual processes, lowers operational overhead, and improves transaction efficiency, directly reducing the cost to fulfill and helping to counterbalance tariff-driven cost increases.
How can suppliers position themselves as the preferred choice?
Buyers won’t waste time on a supplier with a clunky process. Those that offer seamless integration and interoperability gain a competitive edge – driving repeat business and long-term revenue.
What role does automation play in mitigating risk?
The more manual processes a supplier relies on, the greater their vulnerability to supply chain volatility. Automation makes it easier for buyers to place the orders, and lowers their cost of acquisition. It also reduces reliance on reactive decision-making and helps companies adapt faster to changing market conditions.
What can technology do to support suppliers in this environment?
Digitizing transactions can improve the tracking and management of new or growing expenses. For example, automated invoicing tools can split out and track tariff surcharges separately instead of applying blanket price increases, helping suppliers remain transparent while preserving margins.
How can we reduce friction and make integration decisions easier?
In uncertain times, making integration easy and low-risk is key. Suppliers need simple, cost-effective solutions that speed up transactions, provide better visibility, and reduce inefficiencies.
How B2B Suppliers and Buyers Can Prepare for The Road Ahead
Tariffs are just one of many forces shaping the future of B2B commerce, procurement, and supply chain management. In uncertain times, businesses that can adapt faster, integrate smarter, and eliminate inefficiencies will have a competitive advantage.
Key Strategies to Stay Ahead
For B2B Buyers:
- Diversify Your Supplier Network – To navigate disruptions and pricing volatility, businesses should expand their supplier base to source products across multiple regions. More importantly, integrating directly to automate transactions with a broad set of suppliers allows businesses to shift sourcing quickly when costs spike.
- Increase Visibility Across Supply Chains – Real-time data on orders, pricing, and inventory is critical to managing supply chain volatility. B2B buyers with broad, integrated supplier networks can respond faster to pricing fluctuations by shifting to lower-cost sourcing options.
- Maximize Operational Agility – Imagine being in a position where you don’t need to raise prices because you’ve diversified suppliers, automated procurement, and optimized sourcing decisions in real-time. Businesses taking action now will have the upper hand when economic pressures intensify.
For B2B Suppliers:
- Remove Friction in the Purchasing Process – Suppliers should focus on removing friction from the purchasing process by automating transactions, improving pricing transparency, and integrating with buyer procurement systems.
- Eliminate Manual Bottlenecks – With cost pressures mounting, suppliers cannot afford slow, error-prone processes. Digital transformation—including PunchOut integration, PO automation, and invoice processing—can help lower cost, increase accuracy, and mitigate risk.
- Support Buyers Through the Transition – B2B suppliers should actively communicate with their customers about how tariffs may impact pricing, procurement, and lead times—helping them plan ahead and avoid supply chain disruptions.
Final Thoughts: Adapting to a Changing Landscape
While tariffs are creating short-term chaos, the broader trend is clear: businesses that increase efficiency, automate processes, and streamline the procure-to-pay and order-to-cash processes will have a strategic advantage in 2025 and beyond.
Waiting to adapt isn’t an option. By taking proactive steps – such as expanding supplier networks, leveraging automation, and integrating procurement processes – companies can turn uncertainty into an opportunity for long-term resilience.
How TradeCentric Can Help
TradeCentric simplifies this transition by enabling seamless, scalable integrations between suppliers and buyers – eliminating manual inefficiencies and ensuring transactions flow effortlessly across eCommerce, ERP, and eProcurement systems. With our extensive network of pre-connected suppliers and buyers, businesses can quickly diversify their partnerships, reduce supply chain risks, and maintain stable operations even amid economic volatility. By automating procurement and order workflows, TradeCentric helps companies reduce costs, improve supply chain visibility, and accelerate digital commerce growth – turning operational complexity into a competitive advantage. To see if TradeCentric may be able to help your business, contact us.
