Combatting Tariffs With Industrial Software

Two years ago, talk of a 10% to 15% tariff on the closest US trading partners would have stunned markets – and for good reason. For the past eight decades, the US has been the chief architect of today’s international rule-based trading system: it set up Bretton Woods, led the GATT (General Agreement on Tariffs and Trade) rounds, and later the World Trade Organization (WTO), so that firms could plan supply chains and exports under predictable rules. That architecture didn’t erase politics from trade, but it did make sudden shocks rarer.

Today, tariff threats are routine. The ‘10% to 15%’ headline no longer shocks, but the operational impact remains. If you’re scanning for a neat spike in factory inventories or a clean jump in price indices – like I did – you’ll probably miss the story. Tariffs change behaviour first – in terms of where firms source goods and raw materials, how long deliveries take, and how much working capital is required – long before they show up cleanly in consumer price indices (CPIs).

Inside the plant, tariffs operate as both a price shock and a planning problem. Today, plant managers are responding with defensive moves: dual-sourcing (using two suppliers for the same part), choosing substitutes, shifting sub-assemblies across borders, and living with longer, less reliable lead times. When done correctly, higher duties increase costs but ease competitive pressure from imports. However, the latest National Association of Manufacturers (NAM) survey paints a grim picture: only 55% of firms remain positive on their outlook (down from 70% in Q1 2025), while 89% say that the 2025 tariffs have raised their cost of doing business, with the average reported increase around 8%.

Demand won’t bail anyone out either. Sales and production expectations in the US are still positive, but only just. Exports are the weak link, because tariffs travel. Firms expect slightly negative export growth (-0.6%) over the next year, with more anticipating declines than increases, and 62% say that export opportunities are being hit by retaliatory tariffs, with Canada, China and Mexico most often cited as affected destinations. The mix of higher input costs with shy demand is forcing margin defence, resulting in smaller capital expenditure (CAPEX) plans, slower hiring and tighter approval gates for anything that ties up working capital.

The one offensive move we see is digitization. To cope with policy volatility, firms are leaning into software and technologies that compress planning cycles: in the NAM survey, 85% of respondents say they will emphasize digital transformation this year – and 22% plan a significant emphasis. That’s how procurement gets faster, inventory gets smarter, and pricing becomes more surgical.

Enterprise asset management (EAM) software keeps asset life cycles visible and costs controlled. Asset performance management (APM) software uses analytics to predict failures and avoid unplanned downtime. Computerized maintenance management systems (CMMS) streamline maintenance workflows, while asset investment planning (AIP) solutions help prioritize capital projects under tighter cash gates. When policy volatility turns supply chains into moving targets, these systems shift from ‘efficiency upgrades’ to operational insurance, enabling manufacturers to defend margins and keep strategic plans intact, while the trade winds keep shifting.

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