How AI Helps the Manufacturing Industry Tackle Trade Tariffs

There is no doubt that we will have to relate to trade tariffs in the years ahead. This has become particularly clear as Donald Trump, in his renewed presidential campaign, has announced plans for sweeping new tariffs targeting countries like China, the EU, and other major industrial powers. The signals are clear: the wave of protectionism that has swept across the globe in recent years is not receding — if anything, it’s accelerating.

For the manufacturing industry, this means planning and strategy can no longer rely on a static trade landscape. Rather, companies must be prepared for rapid shifts, unexpected barriers, and cost changes that can severely impact both production and profitability. This is where AI comes in—not as a future vision, but as a practical tool for the present.

More and more industrial companies are realizing that AI can serve as a smart guide in a geopolitical terrain that is rapidly changing. By combining data from customs systems, logistics flows, and geopolitical analysis, AI can turn uncertainty into actionable insights. As Sofie Perslow, AI expert at HiQ, puts it: “In order for AI to predict the effects of trade tariffs in real time, it needs access to connected, quality-assured data from both internal systems and external sources. Logistics, customs information, and market shifts must be fed into the same data stream.”

Adjust in Real Time – or Lose Ground

When tariffs suddenly alter the cost structure, it is essential to react quickly. AI technology enables real-time analysis of the impact of tariffs at various stages of production, making it possible to swiftly adjust both pricing and component choices.

Companies can identify alternative materials with lower tariffs or adjust their sales prices based on regional conditions. Supplier contracts can be renegotiated automatically as trade policy evolves. It’s not just about numbers — it’s about staying competitive when the rules of the game are rewritten overnight.

From Bottleneck to Advantage in Logistics

Supply chains are often the first to feel the impact when new tariffs are introduced. AI can analyze thousands of logistics variables to suggest alternative routes, relocate inventory to tariff-friendly zones, and even automate customs documentation. During the US-China trade war, companies like Caterpillar and Whirlpool were forced into costly adjustments. With AI, many of these bottlenecks could have been anticipated — and mitigated.

“Agent-based AI makes it possible to automatically monitor supply chain changes, suggest renegotiations, or dynamically redirect flows. But systems must act in line with business logic — not just data-driven, but business-driven,” says Sofie Perslow.

“Agent-based AI makes it possible to automatically monitor supply chain changes, suggest renegotiations, or dynamically redirect flows. But systems must act in line with business logic — not just data-driven, but business-driven.”
Sofie Perslow, Head of AI, HiQ

See the Risks Before They Hit

Properly trained AI models can monitor trade patterns and geopolitical developments to predict upcoming risks. If a trade agreement is on the brink of collapse, or new tariffs are being signaled, AI can provide early warnings. This enables a more diversified supplier base and better-prepared scenarios for potential trade wars. A company like Harley-Davidson, which was hit hard by steel tariffs in 2018, might have made different decisions with access to such tools.

In a complex global economy, production optimization is critical. AI’s strength lies in its ability to weigh factors such as labor costs, energy prices, transportation options, and tariff rates. This enables companies to make strategic decisions about where production should be located — not just based on today’s costs, but tomorrow’s risks and opportunities. Apple, for example, has already begun relocating parts of its manufacturing from China to India and Vietnam. With AI, such decisions can be made faster, more accurately, and with lower risk.

The Right Product to the Right Market – Despite Barriers

Customer strategies must also be adapted to new tariff landscapes. AI-driven systems can analyze market data to recommend a shift in focus to regions with lower tariffs or adjust the product portfolio to minimize exposure to highly tariffed goods.

Even marketing efforts can be fine-tuned — for example, by using AI to optimize campaigns that account for price increases caused by tariffs. When the US threatened tariffs on Mexican goods in 2019, the auto industry was immediately affected. With the right AI support, companies could have reacted proactively.

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The Bureaucracy No One Wants – But Everyone Must Manage

Trade tariffs bring not only economic consequences but also increased bureaucracy. Classifying products, managing regulations, and generating customs documents require time and accuracy. AI can automate much of this work, update internal systems with regulatory changes in real time, and ensure compliance — without pulling resources away from core operations. But the technology must go hand in hand with human judgment.

“Only when AI is connected to human judgment through transparency, feedback loops, and manual overrides can we build trust and real business value in critical decisions affecting customers, costs, and societal outcomes,” Sofie Perslow emphasizes.

“Only when AI is connected to human judgment through transparency, feedback loops, and manual overrides can we build trust and real business value in critical decisions affecting customers, costs, and societal outcomes.”
Sofie Perslow, Head of AI, HiQ

But – AI Is No Magic Wand Without Data Access

Challenges remain. Many AI tools are built for retail, not for the complex ecosystem of the manufacturing industry. To fully leverage AI in mitigating the effects of trade tariffs, better integration with customs systems, access to updated trade data, and collaboration between tech providers, companies, and government authorities are essential.

Still, the potential is clear: shifting from gut feeling to pattern recognition, from guesswork to simulation.

Conclusion

In a world where conditions change rapidly, AI is becoming the manufacturing industry’s most important tool for adapting — and excelling. It’s no longer about following developments, but about leading them.

Companies that begin using AI as a strategic partner today will have a competitive edge tomorrow — regardless of which way the geopolitical winds are blowing.