In the globalised economy, customs duties as a sanction instrument represent a recurring and currently relevant challenge. Medium-sized industrial companies that operate in complex international supply chains are particularly affected by the economic impact. Suddenly rising costs for raw materials, components or preliminary products not only cause liquidity problems due to short-term increases in expenditure, but also put pressure on competitiveness and profit margins.

The most direct consequence of tariffs is the immediate increase in the cost of imported goods, which directly increases production costs. If these additional costs cannot be fully passed on to customers, they reduce profits and affect the financial stability of the company. In addition, the introduction or threat of punitive tariffs creates planning uncertainty and can lead to market price fluctuations. Companies are often forced to adapt their supply chains and supply chain processes, which entails further costs and risks.

Short-term measures by the purchasing department

In the acute phase of the introduction of customs duties, the purchasing department must react quickly and flexibly. Firstly, a detailed analysis of the affected goods, suppliers and volumes is necessary. At the same time, discussions should be held with existing suppliers to negotiate possible cost sharing or alternative pricing models. The use of bonded warehouses or free zones can delay or avoid the payment of customs duties in the short term. It is equally important to identify alternative sources of procurement from domestic or European suppliers.

Existing contracts and Incoterms should be reviewed for clauses that regulate the distribution of costs in the event of customs duty increases. Finally, the extent to which the increased costs can be passed on to customers must be examined in close consultation with sales and management.

• Inventory and analysis
• Negotiation with suppliers
• Inspection of customs warehouses and free zones
• Identify alternative procurement sources (immediate measures)
• Review of contracts and Incoterms
• Check the passing on of costs

Medium-term measures of the purchasing department

Further strategies are necessary for medium and long-term stability. Diversifying the supplier base reduces dependencies on individual regions or suppliers. The localisation and regionalisation of procurement can avoid customs duties and shorten supply chains at the same time. Through value analysis and design-to-cost, products can be redesigned in such a way that materials subject to customs duties are reduced or replaced.

Building strategic partnerships with suppliers can enable long-term agreements that offer price security and flexibility. Investments in technology and automation help to offset increased procurement costs through higher productivity. Continuous monitoring of political and economic developments enables early action to be taken in the event of impending trade barriers. Last but not least, the purchasing staff’s knowledge of international trade regulations, customs procedures and alternative procurement strategies should be continuously expanded.

• Diversification of the supplier base
• Localisation and regionalisation of procurement
• Wertanalysen und Design-to-Cost
• Building strategic partnerships
• Investments in technology and automation
• Early detection and monitoring
• Training and further education of employees

Customs-based economic policy represents a serious challenge for medium-sized industrial companies. A combined strategy of short-term damage limitation measures and medium- and long-term strategies to diversify and increase resilience is crucial in order to secure competitiveness and emerge stronger from this volatile phase.

ADCONIA – Out of the ordinary.

Consulting for procurement, supply and value chain with a focus on cost management, digitalisation, organisational development and sustainability.