One day the United States and India are close trading partners on seemingly comfortable terms. Then suddenly their relationship is turned upside-down by a threatened 50% tariff that come late August could make India, a huge exporter to the U.S., America’s most heavily taxed trading partner in Asia. In Europe, meanwhile, Switzerland, another longtime U.S. trade ally, is ambushed by a 39% Trump tariff that brings fresh chaos to trade dynamics across the region.

Wholesale distribution organizations are caught in the trade war crossfire. How to orchestrate a supply chain, maintain effective pricing strategies and meet obligations to customers when the ground beneath you is constantly shifting?

In such an uncertain environment, “markets will shift in favor of [wholesale distributors] who anticipate the impact, select superior strategies, and harness the tools and disciplines of execution,” David S. Bauders, CEO of SPARXiQ, asserts in an article posted by the National Association of Wholesaler-Distributors. On the other hand, for distributors with high tariff exposure, weak strategy, or poor execution, the fallout from the trade war “can potentially be ruinous.”

Wholesale distribution organizations are discovering that their most valuable competitive assets in times of extreme uncertainty are data and the ability to rapidly and intelligently collect and analyze it to glean timely insight as policies shift and conditions change. Gone are the days when distributor decision-makers could rely on experience, customer feedback, gut instinct, a bit of data, and a just-in-time approach to keep their operations running smoothly. With disruption now the norm, long-held assumptions must be challenged, and a flexible, proactive, data-driven approach to making decisions and managing risk is a must. Here are four keys to making that approach work in the face of trade wars, extreme weather, regional conflicts, unexpected trade route bottlenecks and whatever else comes their way:

Prioritize real-time visibility

Data nowadays must tell a full and fresh story. Information about stock levels, inventory locations, supplier deliveries, and outbound shipments has to come in real time from across the organization and the supply chain in order to optimize stock levels, make appropriate shifts in sourcing, prevent overstocking, and balance operational efficiency with strategic flexibility. When tariffs and other disruptions change the landscape with little notice, a distributor’s responsiveness and resilience depend more than ever on visibility. Mobile scanning and data capture provide instant answers, so procurement and finance teams have all the data they need to act fast, without having to gather it from outdated spreadsheets or siloed systems. This real-time visibility supports the just-in-case strategies that more distribution organizations are employing today.

Model multiple scenarios

Doing business in a landscape where complicated trade policies converge with other disruptions demands sophisticated scenario planning. That entails creating multiple scenarios that provide a template for responding when one of those scenarios becomes reality, similar to a military planning operation. If a new tariff dictates shifting fulfillment to somewhere outside the U.S., where in Europe, South America or Asia to move it? If a distributor wants to shift 20% of wine exports to China from the U.S., where can it find container capacity into Hong Kong? Distributors need to be dynamically modeling various scenarios, and strong predictive analytics and simulation capabilities enable them to do so. These tools can show them outcomes from different supply chain, pricing and rebate strategies, while also helping them develop demand forecasts based on tariff changes, create contingency plans and assess their potential impact on cost structures, and optimize logistics routes. Ultimately, they’re better equipped to mitigate the impact of tariffs and shifting market conditions — and even identify new competitive opportunities along the way.

Having the latest verified information on evolving trade regulations adds an important dimension to planning and forecasting. Today wholesale distributors can access a centralized global trade data source on customs tariff measures and duty rates, export control lists and more, plugging that data into their scenario planning models. In a world in constant flux, tools like these make proactive planning possible.

De-risk the supply chain

How are policy decisions likely to impact specific primary, secondary and tertiary suppliers, manufacturers and logistics providers? How might threatened U.S. sanctions against countries and companies doing business with Russia impact a distributor’s supply chain, for example? Having a clear view into the risks within a supply chain, with the ability to assign risk scores to specific suppliers and make decisions to near-shore, friend-shore or otherwise adjust sourcing of certain goods based on those assessments, is critical to mitigating the impact of trade policies and other sources of disruption.

“In today’s geopolitical and regulatory environment, de-risking supply chains isn’t optional, it’s a strategic necessity,” asserts Dr. Meg Reiss, founder and CEO of SolidIntel Inc., a company that offers AI-driven supply chain management tools. “Smart companies treat it as an investment, not a cost, gaining fewer disruptions, smoother compliance, and the agility to seize opportunities when competitors are still scrambling. You can’t afford to discover your weak points in the middle of a crisis.”

Diversify the customer base

As risky as it is to be beholden to suppliers in a specific tariff-impacted country, a distribution organization likewise can be burned by being overly reliant on customers from a tariff-effected country. Speaking about the importance of diversifying the customer base in a volatile tariff environment, Dirk Jandura, president of the German Wholesale, Foreign Trade and Services Association (BGA), said, “We are increasingly seeing that our companies are responding to the current situation. The search for new markets is in full swing.”

The Final Word

Trade policies are roiling markets, muddying supply and demand signals, and wreaking havoc on strategic short- and longer-term decision-making. For wholesale distributors, measures like these are critical to finding a profitable way forward in a world where the next disruption, tariff-related or otherwise, lurks around the next corner.