Tariff Simulation for Sourcing Decisions

Tariff simulation becomes critical when trade policies change quickly and sourcing teams face dramatic cost shifts. A supplier that looked like the best option yesterday can become uncompetitive tomorrow when new tariffs, duties, or fees are introduced.

Too often, businesses react to these changes instead of planning for them. Landed cost calculations are scattered across spreadsheets. Freight, insurance, and carrying costs are overlooked. Public tariff data is not integrated into decision-making. The result is a scramble whenever trade rules shift. Without tariff simulation, organizations are forced to react instead of plan.

Why Tariff Simulation Matters

• Without a clear view of total landed cost, companies risk:
• Selecting suppliers based only on base price while ignoring freight, insurance, and duties.
• Underestimating the impact of sudden tariff increases.
• Making sourcing decisions that look efficient but reduce overall profitability.

To compete globally, organizations need a reliable way to evaluate the true cost of sourcing and to test what will happen if trade rules change.

How ImpactECS Works

ImpactECS gives sourcing and finance teams a tool to model fully loaded landed costs across all suppliers and then simulate tariff changes. The process follows several steps:

Building a Complete Landed Cost Model

1. Capture material and supplier data
   Load information about raw materials or parts, including supplier, ship-from location, and base price.
2. Incorporate logistics and overhead
   Add freight, insurance, carrying cost, shrinkage, and off-quality. This builds a complete picture of what it takes to bring the product to your door.
3. Apply tariff data
   Pull in Harmonized Tariff Schedule (HTS) codes or other publicly available data to establish current tariff rates.
4. Add “what-if” tariff scenarios
   Enter proposed or hypothetical tariffs by country or supplier. The model recalculates instantly, adding new tariff values to landed costs.
5. Compare outcomes across suppliers
   See how tariffs shift total costs across different supplier options. A supplier with a higher base price might still be cheaper overall once tariffs and logistics are applied.
6. Scale across the portfolio
   Run simulations for a single part or apply tariff changes across all materials and suppliers.

Example in Action

In one demonstration, a sourcing team evaluated two suppliers for a simple component. At first glance, the Chinese supplier offered the lowest base price. Once a 125% tariff was applied, the landed cost nearly doubled, making a Mexican supplier with a 30% tariff the more affordable choice.

In another case, a more complex part sourced from both Canada and Mexico showed that even with a higher Canadian tariff, lower freight and insurance costs made the Canadian supplier the best option.

Together, these examples highlight how important it is to see the total picture.

Why It Matters

• With ImpactECS, sourcing and finance teams can:
• Make supplier decisions based on true landed cost, not incomplete data.
• Test “what-if” scenarios before tariffs take effect.
• Build resilience into sourcing strategies by identifying backup suppliers.
• Anticipate cost changes and update forecasts before the business feels the impact.

The Bottom Line

Although trade policies and tariffs may be unpredictable, your cost planning does not have to be. ImpactECS delivers clarity by combining supplier data, logistics costs, and tariff rules into a single view. With built-in simulation tools, you can evaluate sourcing decisions with confidence and adapt quickly when the rules change.

Trade policies and tariffs may be unpredictable, but your cost planning does not have to be. ImpactECS combines supplier data, logistics costs, and tariff rules into a single model so teams can simulate outcomes before they happen.

Explore how ImpactECS can support more confident sourcing decisions.