Another day, another tariff. This time, a 200% tax on French wine and Champagne is being threatened as a backlash against EU plans to impose significant levies on the importation of American whiskey. It’s enough to give your average CPO a migraine – and that’s without drinking the focus of the tariffs themselves.
Then there are taxes on the import of steel and aluminium to the US, adding to the web of draconian tariffs that have already been threatened and continue to land with alarming regularity. It’s like tariff ping pong and we should hardly be surprised that markets are responding negatively as we continue to see a significant sell-off of equities.
If the markets are struggling to cope with the chaos, then so too are CPOs. “We can’t make long-term decisions based on these very short-term announcements that are being made by the White House,” said one leader speaking on our APAC CPO Connect call last week.
As I argued in last week’s column, the skill of CPOs in the coming months will be to accurately predict when bluster becomes reality – it’s a tightrope between investing in unnecessary and expensive contingency plans and new supplier capability, and exposing the organisation to the potentially devastating impacts of a trade war.
But if the global posturing and protectionism continues, there will come a point when local sourcing, increased resilience and all the investments they demand will become a necessity. The CPO call I referred to above explored the impact of the evolving landscape from a more global perspective, with one member noting: “retaliatory tariffs will come into play which have a more direct impact on our operations.”
There is the direct impact of tariffs, and then there are the myriad, global ripple effects. “There’s just as much risk that this will expand out, but the sources of supply aren’t [sufficient] from a local basis for a lot of that,” the CPO continued. “Because the manufacturing is just not there in some of the countries that we operate in.”
And this is the tipping point CPOs must prepare for – a potential redesign of global supply chains that will demand significant investments and long-term planning. Knowing when that tipping point will arrive (if at all) is the challenge.
Quite frankly, it’s enough to give any CPO a headache – wherever they’re based.
Celebrating excellence
Congratulations to every company and individual that made the 2025 World Procurement Awards shortlist. Having been very close to the judging calls and having facilitated several of our calls over the last few weeks to whittle down the entries to this shortlist, I can say with confidence and credibility how much of a challenge it is to get to this stage.
We now enter our next stage of judging, during which rigorous debate among CPOs will help us to arrive at the winners. It’s an exhaustive and energising process and it’s wonderful to see so many stories of procurement-led impact.
