Procurement Says No to the orange man’s tariffs – June 2025

There’s an orange man in the Whitehouse. Not like the blue men, the US performance art company who play gigs in Vegas (Baby), Berlin, probably Dubai - but rarely in Doncaster.   We’re not sure whether the orange man has been to Doncaster either.

But the orange man has been in Capital Hill before.   

And now he’s making mischief with the aim, we think, of “doing a deal”. Lots of deals. All of the deals (all of the Time..get it). The Art of the Deal.

To get to the deal though the orange man is causing just a little bit of global chaos with different tariffs being imposed for different countries, and sneakily including off-shore territories, so no one tries to get anything through via the Heard and McDonald Islands.  

There’s a ripple effect - maybe it’s intended, maybe not. Though we can imagine that the orange strategy is possibly intended to drive manufacturing back to the US. If so, then imposing tariffs, like now, maybe is a little premature. Perhaps warn of tariffs coming in two years unless foreign businesses get their investment plans aimed at the rusty Mid-West?  The Rust Belt is orange coloured. Maybe that would avoid the chaos?

Tariffs will inevitably increase the cost of imported goods, making raw materials and components more expensive. This disrupts established global supply chains, and upsets a lot of procurement folk. It causes their savings targets to go out the window. My savings are based on pre-tariff pricing. Ah, no.

So - tariffs might lead to re-shoring or near-shoring efforts (that was the intended consequence!); reconfiguration of supplier networks; and delays in production cycles due to regulatory bottlenecks. I hope you’ve filled in these new forms correctly?

And for those Procurement people, freshly looking for more savings to fill a rather large orange hole, now they’ve got to sort out greater complexity in managing more supplier diversity and contract renegotiations.

Orange things will also be more expensive for end consumers. Although they've not particularly orange, nor green for that matter, that Apple phone has just gone up in price.  That’ll be electronic components from China or Taiwan or India.

And other apples have gone up in price too - food imports from Europe and Canada. And the machine we use to turn apples into apple pie – its parts come from another country.   Not as easy as pie, is it?

And then there’s war. Which is stupid. And good for, well, nothing. Orange retaliation and trade wars - starting, we think, with maple syrup. There’s a domino effect coming and the dice are tumbling in a mix of metaphors.

China, Canada and the EU have their dice loaded. So, will trade volumes decline - and will, which was probably not the orange plan, international investment fall?

And then we’ll see reduced global economic growth - and gawd knows it’s bad enough in the UK and most of Europe already. The IMF and World Bank have warned of slower global GDP growth as trade barriers are put up.  Countries reliant on exports - such as Germany, South Korea, and many developing economies are feeling a little sick.

What about the WTO? The WHO you say? No, the WTO. Their mechanisms and multilateral trade alliances are in an orange hued mess. And some countries may well pursue regional trade agreements (like RCEP) which exclude the U.S. Are we no longer invited to the party?

So, dear procurement people - what do we need to do?

Easy - we can list some bullet points and crack on. Bullet points are easier to do than cracking on, so here they are:

1. Firstly - develop agile sourcing models - you know. Agile ones. Invest in some local and regional supply chains.

2. Secondly - strengthen your supplier due diligence. Oh, you’re not doing much of that?  Well, that’s bad.  You need to get out there and be diligent.

3. Thirdly, and Ed came up with this one, you need to use tariff-engineering strategies.   Something to do with reclassification of components and country-of-origin analysis.  Ask Ed.

4. Fourthly - you’ve got to just get on and implement advanced risk analytics to guide purchasing decisions. With a spreadsheet probably.

5. Fifthly (not a word you read too often) - pay attention because this is all going to change.

   
   

Orange is not black and white. It turns out that trade policy is related to procurement policy more than anyone was prepared to admit. So - ignore political risk in your supply chains at your peril. Orange peril.

This might go on and on for a couple of years.  

The future’s not so bright. The future’s orange.

(This article is NOT referring to any Orange telecoms type companies, alive or dead.  Just so you know.)