By Fayola-Maria Jack, Founder, Resolutiion.
Following months of mounting expectation and pontification about what was to come, the US tariff bomb finally dropped in April 2025. After announcing plans to put a 25% levy on steel and aluminium imports in February, the US has now rolled out a sweeping tariff policy that will see a 10% baseline duty applied to all imports entering the US.
The fallout has been significant and financial market turmoil has resulted in a number of countries taking a step back to avoid an all-out global trade war. Financial markets that were left reeling in the wake of the announcement haven’t been helped by several rounds of tit-for-tat tariff raises that have been traded back and forth between the US and China.
For manufacturers that are increasingly sourcing key materials from global supply chains and serving a variety of international markets, the US’s self-proclaimed ‘Liberation Day’ has brought with it a wave of uncertainty.
Having been grappling with rising production costs driven by inflation, supply chain disruption and currency volatility, these tariffs are likely to push prices even higher. However, the impacts will extend far beyond budgets.
Established supply routes could be threatened, putting immense pressure on existing procurement relationships that may force companies to source key materials from alternative and potentially more costly, suppliers. In this context, the ability of companies to forecast and plan effectively will also become increasingly difficult, resulting in significant procurement challenges and decision-making bottlenecks.
Furthermore, there is little to suggest that tensions will ease anytime soon. Aside from China’s ongoing responses, the EU and Canada stated they were preparing counter-tariffs, and signalled intent to bolster local manufacturing through initiatives such as the “Made in Europe” campaign.
Escalating tensions could create further friction in international trade, which could have additional consequences for manufacturers. Increased bureaucracy and regulatory hurdles could emerge, for example, creating new layers of red tape that would lead to longer lead times and operational delays.
Manufacturers must invest in stronger trade relationships
While geopolitical shifts and tariff changes are largely outside the control of manufacturers, they are not entirely powerless in how they respond. Indeed, companies can and should take steps to build greater resilience. Strengthening trade relationships with key partners is a crucial part of that.
If relationships remain strictly transactional, built upon rigid contracts, then there’s little incentive for either party to be flexible should challenges arise. In such cases, disputes are much more likely to escalate into damaging, expensive and drawn-out battles that nobody really wants.
By contrast, trust-based relationships can go a long way in helping firms on both sides of the table to navigate uncertainty, facilitating greater planning, knowledge sharing and effective, adaptable negotiations that are mutually beneficial for all parties.
In a world that’s been rocked by years of disruption and chaos from Covid, to supply chain interruptions and financial market fluctuations, it’s more important than ever for manufacturers to prioritise relationship building. Indeed, it could just be the difference between weathering the storm or falling victim to excessive disruption, delays and disputes.
Below are four key recommendations for firms looking to build a robust conflict resolution strategy capable of proactively managing risk, improving resilience and reputation, and maintaining financial stability.
#1 – Pre-contractual clarity
Often, the reason for disputes stems from contract ambiguity. Therefore, it’s critical to ensure that all terms are as clear as possible, and that contracts also include comprehensive dispute resolution clauses and escalation pathways. Providing a structured framework for addressing challenges can help prevent conflicts from escalating.
#2 – Scenario-based contract modelling
When unpredictable market conditions arise, such as with the introduction of unforeseen trade tariffs, rigid contracts are more likely to fail. To avoid this, it’s important to incorporate ‘what-if’ modelling so that commercial relationships can be quickly adjusted to meet changing conditions.
#3 – Neutral third-party facilitators
Should conflicts arise, it is wise to engage neutral third-party resolution expertise. This strategy can support businesses by removing emotion from disagreements and providing objective perspectives that can help to achieve more efficient resolution without the need for disruption, financial loss, and in the worst cases legal escalation.
#4 – Conflict resolution technology
Conflict resolution technologies can also facilitate quicker, more collaborative problem-solving, while also easing the burden on procurement and operations teams that are already under increasing pressure. From flagging potential problems earlier to streamlining how disagreements are handled, they are key tools that can help to ensure that issues don’t escalate into full-blown disruptions.
Building long-term resilience in an uncertain environment
This kind of forward planning is about more than improving resilience in uncertain times.
Even a small amount of upfront investment into relationship building and dispute management can bake significantly greater trust and transparency into supply chains, helping manufacturers to protect and sustain operational continuity on a 24/7/365 basis.
On the flip side, manufacturers tied to rigid contracts that are likely to collapse under pressure will quickly find themselves in a position where they are faced with the prospect of fractured relationships, delivery failures and adversarial disputes that could lead to costly compensation settlements.
Today, the risks of inaction are clearer than ever. Indeed, those manufacturers that take a proactive approach will be far more resilient in a world where uncertainty and chaos appears to be the new normal.
Resolutiion is a human-centred global AI platform, purpose-built to help buyers and suppliers prevent, manage, and resolve commercial conflicts and disputes, with speed and precision.