By Puneet Saxena, Corporate Vice President, Manufacturing Industry Strategy, Blue Yonder
Since April 2025, the global semiconductor industry, along with its interconnected procurement, supply chain, and customer base, has been grappling with the impact of newly imposed tariffs from the Trump administration. Just weeks earlier, outlets including Reuters reported that “Tariffs on imported semiconductor chips [would be] coming soon” – and by early April, a 25% tariff had indeed been announced, with the potential for further increases over the year.
While a general 10% baseline tariff was implemented for most goods entering the US, semiconductors and other categories have seen sharper, sector-specific rises, and the overall situation remains very fluid. One week after the initial reciprocal tariffs announcement, news followed of a 90-day pause on rates above 19% for 59 countries – with China notably excluded. Two days later, on April 12th, smartphones, computers, and select electronic devices were exempted from the 10% rate imposed elsewhere.
Fast forward to today, and procurement teams across sectors, from steel and automotive to pharmaceuticals and tech, face major uncertainty. Existing and proposed tariffs are fragmenting global trade, threatening to disrupt established procurement strategies, reduce access to key markets, and challenge the ability of companies to leverage global specialisation. The effects of these tariffs are poised to ripple throughout procurement operations, potentially raising input costs and stifling both competition and innovation.
For the semiconductor sector, the procurement implications are stark. Consider a company sourcing advanced memory chips across sites in the US, China, and Taiwan. A chip valued at $100, assembled in Taiwan and minimally packaged in China, could face tariffs as high as 40%, inflating reimport costs to $135 or more. For procurement professionals operating within tight margins, these costs aren’t just a bottom-line issue, they create significant challenges around supplier selection, risk mitigation, and long-term sourcing strategy.
Procurement in the age of uncertainty
For European technology companies dependent on global semiconductor supply, the complex geopolitical environment, intensified by the ongoing Ukraine conflict and rising trade tensions, makes long-term procurement planning incredibly difficult.
Yet, this doesn’t mean businesses are without options. The problem lies in the trade-offs. Shifting procurement to suppliers in Mexico, Indonesia, Singapore, or Malaysia could help avoid tariffs in the short term, but it introduces new variables around cost, capacity, lead times, and future trade exposure.
Reshoring or nearshoring has its appeal from a risk management standpoint. However, procurement teams must weigh this against capacity constraints and higher cost structures within Europe. The result? Procurement leaders are forced to strike a delicate balance between cost control, supply continuity, and strategic resilience, without any clear roadmap for what lies ahead.
Procurement solutions for a dynamic tariff environment
Traditional supply chain network and scenario reviews carried out once or twice a year is no longer enough. For procurement teams to stay ahead, they must adopt real-time scenario planning capabilities to evaluate tariff implications and their – effects on sourcing, cost structures, and supplier networks.
Technology is critical here. Advanced supply chain modelling, AI-powered procurement scenario analysis, and digital twin simulations are becoming indispensable tools. These capabilities allow procurement teams to simulate the impact of potential tariff changes, assess cost exposure across suppliers, and dynamically reconfigure sourcing strategies in response.
For example, by using a digital twin of the supply network, procurement professionals can test alternative sourcing models, model supplier performance under different tariff scenarios, and determine the most resilient supplier mix. AI-driven tools can further support strategic procurement decisions by forecasting demand shifts, evaluating supplier risk profiles, and identifying cost-saving opportunities across multiple trade scenarios.
Simultaneously, procurement teams should enhance their focus on network design and supplier optimisation, evaluating not just where materials come from, but how responsive and cost-effective the entire procurement chain is under variable conditions. Real-time, multi-enterprise visibility across the supply network is becoming a necessity, providing another layer of resilience and enabling procurement leaders to take swift action to mitigate emerging risks before they escalate into costly disruptions.
Looking ahead
With trade restrictions threatening everything from raw material access to shipping costs, procurement agility will become a key competitive differentiator. The ability to shift suppliers, adjust sourcing locations, and renegotiate terms in near real-time will be essential for staying competitive and managing exposure.
As tariff volatility persists and policy uncertainty remains high, procurement functions must move from reactive to predictive. Those that embrace advanced digital tools, rethink supplier strategies, and invest in resilient procurement operations will be best placed to navigate the complex and shifting trade landscape.
