10 rules for companies to navigate the next chapter of global tariffs

The worst thing business leaders can do right now, faced with the ever-changing saga of global tariffs, is just complain and hope that “this too shall pass.” The best response is to assume that tariffs will persist and build an organization capable of absorbing the impact and adapting.

They must treat the latest wave of fees and tariffs — imposed by President Donald Trump after the U.S. Supreme Court ruled that many of the previous tariffs he had instituted were unconstitutional — as just another force in a broader era of disruption marked by pandemics, wars, weather events, environmental restrictions and social unrest.

Also read: EU resumes ratification of trade agreement with the US despite risk of new tariffs

The best supply chain leaders have responded this way. They continually strive to minimize the total cost of their products to shelf, protect revenue growth and preserve flexibility.

They see trade friction as normal and believe their supply chains must be designed to perform exceptionally despite it.

This is what I learned in my roles as chief supply chain officer and chief purchasing officer at semiconductor products, manufacturing services, and manufacturing companies in the 1990s, 2000s, and 2010s.

Today, as a supply chain consultant, I see leaders hesitating about their next step. Many get stuck debating tariff tactics instead of building a replicable strategy.

One notable exception is an Australian company: Breville, a maker of small kitchen appliances. It offers a useful example of how a strategic response can pay off.

I have been working with Breville as a consultant since 2021 to help it aggressively shift its production out of China and figure out how to navigate Trump’s tariffs. I’ve known Jim Clayton, CEO of Breville, for over a decade, since we worked together at LG Electronics in Seoul.

The result: On February 11, Breville reported that its revenues for the second half of 2025 grew 10.1%, its gross profits increased 6.3%, and more than 80% of its gross profits from products sold in the United States came from items manufactured outside of China, up from 15% just three years earlier.

In a sector that for a long time produced almost exclusively in China, Breville redesigned its supply network: first, it began to adopt dual sources of supply between China and Mexico; it then added suppliers in Indonesia, Vietnam and Cambodia.

From Breville’s approach and my decades of experience, I’ve deduced 10 rules of thumb that leaders can apply in a tariff-driven world.

Rule 1: Preserve capabilities by helping suppliers move

One of the quickest ways to neutralize a tariff is to help proven suppliers expand or relocate. Co-investing in this shift can preserve hard-earned capabilities while eliminating punitive tariff structures.

Replacing suppliers entirely is slower, more risky and often more expensive. Clayton told me he used the tariffs to prompt Breville’s existing suppliers to accelerate their efforts to build new operations or expand existing ones outside of China: “I used the crisis,” he said. “Our partners had other priorities. The tariffs gave us the reason we needed to get them to act now.”

Rule 2: Build local capacity

Leading companies have local teams capable of qualifying suppliers, accelerating transitions and identifying new sources. In many regions, competent manufacturers already exist — waiting for demand, partnership and credibility.

Local presence improves speed, execution and visibility into true total cost to shelf. At Breville, Clayton asked Nico Stiegler, the company’s general manager of engineering, to assemble a team “with a presence in the field” to lead the effort.

Rule 3: Diversify broadly, not just symbolically

The risk is not mitigated by a simple “China plus one” strategy. Effective leaders diversify across multiple geographies—adding countries like Vietnam, Indonesia, and Mexico—to avoid the risk of concentration in an ever-changing tariff landscape. The goal is resilience, not redundancy.

Rule 4: Treat speed as a strategic asset

Cost matters, but speed often matters more. Sacrificing a small amount of margin to protect growth, service levels and strategic revenue is often the right decision. A late response often proves much more expensive than a higher unit cost.

Rule 5: Recognize how integrated the world has become

Over the past two decades, manufacturing and technical skills have expanded rapidly across developing economies. Leaders who look beyond traditional hubs are often surprised by the depth, quality and scalability available.

At Breville, the teams Stiegler built in Mexico and Hong Kong helped mature operations in Vietnam, Indonesia and, most recently, Cambodia. “The capabilities we discovered were impressive,” said Clayton.

“We had to align what these countries were already doing well with the production of high-quality household appliances. It wasn’t immediate or easy, but, within a few years, we had products of equal or higher quality being manufactured around the world.”

Rule 6: Don’t let AI distract you from the fundamentals

Productivity gains still come primarily from efficient product design and effective manufacturing. AI can assist with analysis and decision-making, but it is not a substitute for disciplined operational execution. Leaders who chase technology narratives without fixing the fundamentals will be disappointed.

Rule 7: Maintain options by preserving relationships

Smart companies that expand beyond China continue to maintain key products and relationships in the country. Decades of accumulated capacity must be used — not discarded — in the search for diversification. Optionality is a strategic asset in an uncertain world.

Rule 8: Let the competition work in your favor

Since supply is diversified, new suppliers often compete directly with established ones. This competition reduces prices, improves performance and strengthens bargaining power across the network.

Rule 9: Stay focused on total cost

Tariffs matter, but cost—like water—always flows to the lowest point. Leaders who stay focused on the total cost, rather than reacting tactically to highlighted tariffs, make better long-term decisions.

Rule 10: Keep track of the bill of materials

Control over component supply is the basis of flexibility and cost management. Because tariffs often focus on value added, deliberately positioning components and labor across regions remains one of the most powerful levers available. Giving up this control limits strategic choices.

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Treating tariffs and fees as something permanent, rather than a temporary disruption, changes everything: it imposes clarity on processes, decision rights and operating models. Everything must be built for resilience.

Thanks to globalization, leaders now have more sourcing, manufacturing and capability development options than ever before. Tariffs act as a catalyst to evaluate these options with discipline.