September 8, 2025 Building Tariff-Resilient Supply Chains with Digital Thread

Tariffs are reshaping manufacturing. Discover how digital thread and AI help build supply chains that can adapt and thrive.

By Jason Kasper, Senior Director of Product Marketing, Aras

In recent months, the term “tariff” has become a common topic of discussion, as the current administration pushes for higher tariffs on countries like China, Canada, and Mexico, and the European Union – triggering retaliatory responses. But manufacturers, especially those in highly regulated industries, know better than anyone that tariffs are nothing new.

What is new, however, is how quickly tariff pressures are escalating. While the U.S. has recently scaled back proposed tariffs on Chinese imports from 145% to 30%, China has also reduced its retaliatory tariffs from 125% to 10%.  Yet many manufacturers are still grappling with higher-than-expected costs. For example, a company that sells filtered shower heads from China is currently paying a stacked tariff of 43% rather than the stated 30%, significantly cutting into profit margins.

Tariffs aren’t a sudden or isolated challenge. They’re one of many indicators that manufacturers must prioritize building resilient supply chain infrastructure. As new tariffs emerge and existing ones accumulate across industries, many manufacturing leaders are looking for business and technology solutions to navigate rising costs and growing complexity.

The Hidden Impact of Tariffs on Today’s Manufacturers

Tariffs have immediate financial impacts, and manufacturers must prepare before new measures take effect. As tariffs grow in scope and frequency, hidden costs can emerge at multiple points in the supply chain. This makes proactive planning and cost modeling essential.

Here are a few areas where tariffs will heavily impact outcomes for modern manufacturers:

• Product design and delivery schedules: Tariffs can disrupt access to critical components, forcing design teams to rework products around new material availability. This reengineering effort can affect overall product integrity, delay delivery timelines, and unintentionally compromise quality.
  
  
• Suppliers and sourcing: Rising tariffs can make existing supplier relationships too expensive to maintain. While switching to tariff-friendly suppliers might seem like a solution, it’s rarely straightforward. New partners must be thoroughly vetted to ensure they meet production capacity, regulatory compliance, and quality standards on short notice.
• Logistics and planning: Changes in suppliers can trigger ripple effects across logistics, warehousing, and inventory management. For example, frontloading shipments to avoid impending tariffs may reduce short-term costs – but it can also result in surplus inventory, increased storage fees, and operational inefficiencies.
• Compliance and risk management: Every component or supplier change introduces new compliance requirements. Manufacturers must stay ahead of shifting documentation, certification, and regulatory rules. Failing to do so can lead to costly delays or penalties, especially in tightly regulated industries.
• Market selection: Tariffs reshape the global competitiveness of suppliers and markets. Manufacturers may need to revisit their long-term strategies, reevaluating where they source, produce, and sell. This could involve reallocating teams or hiring new personnel to guide market selection and expansion decisions.
• Hiring and staffing: Managing tariff complexity often requires new skill sets. Companies may need to create or expand roles such as global trade compliance specialists, tariff impact analysts, supply chain financial analysts, and regulatory risk managers to navigate this evolving landscape effectively.

5 Capabilities Manufacturers Need to Navigate Tariffs

To maintain operational stability and enable strategic growth in the face of evolving tariffs, manufacturers must enhance their supply chain capabilities with intention. These strategic imperatives can be addressed through targeted skill development, the adoption of enabling technologies and frameworks – particularly those leveraging AI and the digital thread.

1. Real-time traceability enhanced by AI provides end-to-end visibility of products, components, suppliers, and other data across the product lifecycle. Implementing a digital thread, augmented with AI, enables the detection of anomalies, prediction of disruptions, and real-time insights, facilitating swift and informed decision-making.
2. Comprehensive supplier qualification is strengthened by a digital thread that maintains up-to-date, traceable supplier histories, while AI evaluates financial health, compliance, and capacity to support faster, risk-aware sourcing decisions.
3. Integrated cost and risk modeling relies on connected lifecycle data to simulate tariff scenarios, with AI enabling predictive insights across suppliers, regions, materials, and market dynamics.
4. Streamlined engineering change management is supported by the digital thread’s traceable connection between design, sourcing, and production, and enhanced with AI-driven risk assessments that speed up response times without compromising compliance.
5. Regional customization frameworks benefit from the modularity and data continuity provided by the digital thread, while AI helps optimize product configurations and localization strategies for faster, more cost-effective market entry.

While various tools can support improvements in these areas, PLM platforms with integrated digital thread and AI capabilities can bring these efforts together within a single, unified environment.

How the Digital Thread Helps Tackle Tariffs

The digital thread doesn’t just help manage data—it enables manufacturers to take proactive, data-driven action across the supply chain. Here’s how:

Accelerating Alternate Sourcing Options

With a digital thread enabled by a PLM platform, manufacturers can quickly identify which product components and suppliers are impacted by new tariffs. Centralized and connected lifecycle data supports the rapid creation of alternative sourcing workflows that factor in compliance, cost, and risk – enhanced further by AI-driven supplier profiling. Combining traceability with AI is critical because it empowers teams to pivot to new suppliers quickly and confidently, with built-in compliance and risk management that supports agility rather than slowing down operations.

Simulating and Planning for Tariff Impact

A digital thread offers deep visibility into how product and supply chain data interact and evolve across the full lifecycle. This enables teams to simulate the impact of different tariff scenarios on specific product lines, sourcing strategies, or logistics flows. For maximum impact, invest in a digital thread–enabled PLM platform that supports in-depth scenario modeling using financial data, risk profiles, and AI-driven sensitivity analysis to guide proactive decision-making.

Adapting Global Manufacturing Strategies

When considering shifting production to new regions, digital thread capabilities can help test the feasibility of those moves. Simulation tools can surface hidden blockers like logistics constraints, cost differentials, or supply chain vulnerabilities. An up-to-date digital thread provides traceability across design, production, and distribution, making it easier to adapt localization and regionalization strategies. Keeping this data fresh and accessible ensures teams can respond quickly to evolving global trade conditions.

Responding to Tariffs with Resilient Business Solutions

Manufacturers have dealt with tariffs on a smaller scale for decades. But with today’s environment where global tariffs are expanding and evolving rapidly, resilience and smart manufacturing strategies are more important than ever. In the past, businesses could get by with minor adjustments. That may have worked then, but today, proactive planning is essential now to navigate a far more complex web of tariffs and regulations.

How can your company respond proactively? Start by auditing your current lifecycle data and identifying any gaps that could make traceability difficult down the road. Then, assess your high-risk suppliers and begin building a more diversified roster of options. Throughout this transformation, focus on connecting design and supply functions – leveraging a platform that connects data across the entire product lifecycle.

Achieving these goals requires practical, scalable solutions. The right technology can manage product variations and supply chain data at enterprise scale – even with complex, changing tariff structures in play. Your existing teams will benefit from the added clarity and efficiency, and leadership will likely see less pressure to expand risk management, logistics, or compliance staff just to keep up. When it comes to tariffs, being proactive doesn’t just prevent disruption – it builds a foundation for long-term supply chain resilience.

About the Author:
Jason Kasper is Senior Director of Product Marketing at Aras, where he focuses on digital transformation, digital thread and digital twin strategies. He has more than 20 years of experience helping manufacturers and asset-intensive industries implement enterprise software solutions. Jason holds a BS in Management from California State University, Chico, and an MBA from Northeastern University.

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