The Data & AI Advantage: Navigating Tariffs in Manufacturing

The modern manufacturing process follows an intricate sequence of sourcing, production and distribution. At every stage, the fluctuating and unpredictable effects of tariffs can cause disruptions that increase costs and impact supply chains. But manufacturing businesses still need raw materials, factories must produce the goods, and fleets need to deliver the end product, all while addressing the challenges caused by changing import duties spanning these operations.

In today’s global economy, companies across industries are continuously reacting to new tariffs, trade disputes and regional conflicts. This means they need to quickly evaluate the impact of a new tariff on their landed costs or how a geopolitical event might disrupt a key supplier in a specific region. Success in this volatile environment hinges on the strategic deployment of data and AI for a unified, real-time view of these complex dynamics. 

In an era of trade volatility and macroeconomic disruption, organizations must prioritize turning data chaos into clarity by connecting critical data and delivering trusted insights to navigate the changing global trade landscape with speed and confidence.

Leveraging data for proactive tariff mitigation

Manufacturers’ raw materials such as steel, aluminum and rare earth minerals are seeing substantial price hikes from tariff increases. A heavy reliance on imports for critical components such as auto parts or active pharmaceutical ingredients (APIs) creates deep vulnerabilities in cross-border supply chains, sometimes leading to cumulative tariffs. Without a holistic view of this complex data, manufacturing businesses will struggle with slow, error-prone and reactive responses. The lack of end-to-end visibility has been a long-standing problem, but now it's a critical vulnerability.

To combat this complexity, manufacturers must build a robust data foundation. This involves integrating data from across an enterprise. Snowflake makes it easy to unify internal data — ERP, warehouse, transport and manufacturing systems — alongside external data feeds such as tariff updates, economic indicators and geopolitical news (many of which are available on Snowflake Marketplace). This breaks down data silos for a single source of truth and end-to-end supply chain visibility, from raw material origin to final delivery. 

Using predictive analytics, enabled with the Snowflake AI Data Cloud, moves businesses beyond historical reporting to "what if" scenario modeling. Manufacturers can use the native capabilities of Snowpark for machine learning to simulate the impact of potential tariff increases on specific components, raw materials and finished goods. This allows for more precise CoGS calculations, identifying products or materials most at risk and understanding how different tariffs might affect profitability and cash flow. For instance, analyzing the cost of bills of materials (BoMs) with integrated tariff data helps better understand the inflation of input costs.

Harnessing AI for supply chain resilience and optimization

With a strong data foundation, manufacturers can harness the power of AI to not only react but anticipate and adapt to tariffs. AI can help optimize supply chains by analyzing vast data sets to identify alternative suppliers in lower-tariff regions, for example, or assess options of reshoring or nearshoring production. With alerts on supplier risks, policy changes or trade disruptions, businesses can significantly reduce customs and compliance delays. 

Manufacturers globally are using Snowflake’s AI-powered analytics to actively reengineer their sourcing and supply chains. For instance, partner solutions such as 1Exiger can map supply chains, flag high-risk suppliers and dependencies, model tariff exposure, find alternative suppliers and proactively manage trade uncertainty. The Blue Yonder Tariff Agent actively sources current tariff data from the U.S. International Trade Commission, calculates specific tariff exposure in near real time and provides actionable recommendations to reduce tariff impacts.

AI capabilities can also extend to optimizing pricing strategies by assessing tariff impacts on production costs, allowing manufacturers to dynamically adjust prices while protecting margins and competitive positioning.

For technologically advanced manufacturers, the future lies in agentic AI to move beyond simple insights and autonomously initiate critical supply chain adjustments. This can have exciting applications, for example, when a forecasting function is then linked with an inventory or a stocking agentic AI engine that focuses on setting inventory levels, restocking decisions or transfers of material. When both are operating together, the level of autonomous decisions greatly reduces the need for humans to be involved in the decision process. Nearly 30% of supply chain working hours could be reduced through agentic AI and more autonomous decision-making.  

Building an agile manufacturing future

It’s critical for manufacturers to prioritize building a data-first culture to ensure data quality and integration across all functions. Crucially, fostering secure data collaboration with suppliers, logistics providers and other partners through shared data platforms enables a coordinated, rapid response to disruptions.

All this could make it sound like navigating tariffs is a complex, overwhelming issue. But Snowflake simplifies the elements, from building a data foundation to sharing democratized insights and harnessing the power of AI analytics and agents to make better-informed decisions under changing tariffs. Snowflake’s AI Data Cloud brings together vast amounts of internal and external data, enables predictive modeling and advanced analytics and makes it easy to share governed insights among stakeholders. With Snowflake, not only are organizations responding to tariff shifts, but they are proactively optimizing operations and making smarter, faster decisions at scale.

In a world with trade volatility, manufacturers who embrace a unified AI data strategy will not just survive but thrive, turning tariff challenges into opportunities for competitive advantage and sustained growth.