The global sourcing landscape was jolted earlier this month as new U.S. tariffs on some Chinese imports surged to 245 percent—an unprecedented jump that left sourcing teams reeling. While most other nations saw tariffs hold at 10 percent for a 90-day period, the message was clear: Nothing is off the table in today’s trade environment.
For brands and retailers, the response has been swift. Many are shifting production from China to countries like Vietnam, Bangladesh and Indonesia—regions that remain under the 10 percent threshold for now. Others are looking closer to home, exploring nearshoring opportunities in Mexico and Central America, where tariff exposure is lower and shipping timelines are more predictable.
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But in the scramble to reduce costs and reroute production, some companies are taking their eye off the bigger picture. The real risk? That processes built for stability—quality control, compliance and supplier oversight—begin to fray under the weight of reactive strategy.
Navigating uncertainty
Tariffs may have been the catalyst, but the real challenge is one of operational agility. As companies diversify their supplier base and pivot to new geographies, the complexities compound: Onboarding unfamiliar factories, aligning them to product specifications and ensuring every item still meets safety and regulatory standards.
Countries like Turkey and India are being tapped for their production capacity, but increased demand has left many factories stretched thin. Lead times are lengthening, ports are congested and in many cases, infrastructure is not yet ready to support the volume of orders shifting their way.
Meanwhile, onboarding new suppliers is no small feat. It requires knowledge transfer, compliance training and often, additional investment in inspections and testing. Rushing this process—or skipping steps altogether—opens the door to costly mistakes.
This is where supply chains start to crack. Quality failures rise. Production timelines slip. Non-compliance issues surface at customs. And ironically, the very savings sought through tariff avoidance may be eroded by delays, defects and damaged trust.
Strategic diversification
To manage the transition without compromising control, brands must act fast—but strategically. This means more than just moving production. It means redesigning operations to work across a more fragmented network.