3 Years of Tipping Points and the Path to Competitive Advantage

President-elect Donald Trump’s tariffs will usher in the greatest era of supply chain redesign ever.

Other than 2025, it is hard to place specific dates on the evolution of supply chains over the last 10 years. Your location, such as the United States or China, matters. Your industry, like textiles or high tech, also plays a role. Both factors influence the years of application.

But beyond the massive upheaval I foresee in 2025 and beyond, two other years stand out as tipping points: 2015 and 2020.

So, let’s examine that evolution, the confusion over tariffs and their effects. But above all, let’s keep in mind that ReGlobalization can transform tariffs from a challenge to competitive advantage.

From Stability to Upheaval

Stability of 2015: This period was characterized by relative stability and predictable supply chains. Companies had a good grasp of supply and demand. This allowed for an efficient and effective flow of goods and low costs of operations.

In 2015, there were few surprises, and companies believed they had well-run supply chains. However, by the time 2019 arrived, VUCA (volatility, uncertainty, complexity and ambiguity) became a topic of concern.

Chaos of 2020: The COVID-19 pandemic caused unprecedented disruptions in global supply chains. Lockdowns, labor shortages and transportation bottlenecks led to significant delays and unpredictability.

This period resulted in widespread disruptions and the shift toward accepting a new normal of constant supply chain challenges. By the time 2024 ended, companies were scrambling to revamp their supply chains. They wanted supply chain networks with the agility and optionality to better deal with nonstop disruptions.

Upheaval of 2025: Tompkins Ventures believes that President Trump’s economic and trade policies will bring major changes to global trade and supply chains. Trump’s tariffs drive these policies.

The term upheaval may appear to be an overstatement. But when I published this article in January 2025, most companies worldwide had not planned to deal with the shock of this upheaval. Now, companies must adopt a sense of urgency for ReGlobalization. ReGlobalization done right is the only way to succeed when Trump imposes tariffs.

What is ReGlobalization?

ReGlobalization is the strategic reconfiguration of global supply chains to balance efficiency, resilience and geopolitical considerations. ReGlobalization involves shifting from traditional globalization models toward nearshoring, reshoring and friendshoring.

It reflects a response to economic disruptions, trade tensions and evolving consumer demands. But in 2025, it’s mainly a response to Trump’s tariffs. Long-term success requires prioritizing regional partnerships and diversified sourcing over reliance on a single country or region.

ReGlobalization aims to foster sustainable and adaptable supply networks that mitigate risks while supporting innovation, economic growth and regional production.

Therefore, I recommend a four-step process for you:

1. Finish reading the rest of this blog: “Trump Tariffs: The Rest of The Story.”
2. Read the White Paper: “ReGlobalization – Redefining Global Supply Chains: Nearshoring, Reshoring and Friendshoring in a Disrupted Global Landscape.”
3. Work with Tompkins Ventures to develop your ReGlobalization plan.
4. Implement your ReGlobalization plan.

While others worry about trade wars, your company can move forward with trade wins. Your enterprise will serve your customers, cut costs and reduce lead times.

With Tariffs, Confusion Abounds

According to Google, economists are the profession that knows the most about tariffs. Well, according to the articles I read and the majority of podcasts and news broadcasts I watch, the economists of the world must be going crazy.

I mean HOLY COW or maybe I should say holy bull? In 2025, how can there be more balderdash than truth about tariffs?

Until 1913, tariffs provided most of the revenue (approaching 95% at times) for the U.S. government. Tariffs have not provided more than 10% of U.S. government revenue since the 1930s. In fact, tariffs have not accounted for more than 2% of U.S. government revenue for the last 70 years.

With all that history, it seems like tariffs would be well understood. Nevertheless, if you listen to today’s news shows and online podcasts you will conclude:

• It is impossible to calculate the impact of tariffs.
• Tariffs may be inflationary but may also help reduce inflation.
• The outcome of tariffs has a lot to do with who deploys them and how they are deployed.
• President Biden and President-elect Trump both agree and disagree on tariffs.
• Studying the history of tariffs provides little insight into the future of tariffs.

But with Tariffs, the How Is More Important than the What

What is clear is that tariffs are a tax governments place on goods imported from another country. Importers pay the tariffs. Unless they are waived or mitigated by some other means (like ReGlobalization).

Tariffs can be used both destructively and constructively. Tariffs can be used as a powerful negotiation strategy. They can be used to both increase global trade and reduce global trade, the same with domestic manufacturing. They can be used to increase or reduce the cost to consumers

Tariffs can be used to increase:

• Acceptance of fair-trade deals
• Protection of intellectual property and patents
• Free trade and better access to markets
• Pro-growth tax cuts as a result of the revenue from tariffs
• Global trade and the level of global flatness
• Environmental, human rights and sustainability goals

Tariffs can be used to reduce:

• Impacts of special interests and favoritism
• Barriers to closed and restricted markets
• Imbalances in the global tax system
• Current penalties on U.S. domestic production

The effective use of tariffs is more an art than a science.

But the confusion and balderdash continue. The truth is tariffs are confusing because the bottom line often has less to do with what the tariff is and more with how the tariff is deployed.

That’s right, the same tariff deployed by President X may work well. And then the same tariff deployed by President Y may backfire. It all has to do with the art of the deal.

So, let’s step back and discuss why tariffs will be successful for the next several years. And let’s examine what you need to do to be sure you, your company and your country come out ahead.

A Negotiating Tool to Serve Political Interests

Tariffs can be used to gain leverage in trade negotiations. For instance, tariffs can pressure other countries to reduce their own tariffs or open their markets to products from your country.

This can lead to better trade agreements and improved diplomatic relations. It also shows the intention to protect local industries. In addition to using tariffs as a proactive negotiating tool, politicians can use tariffs to retaliate against another country’s actions. Tariffs can even be a tool to negotiate the elimination of tariffs.

Economic Interests, or a Way to Balance the Playing Field

Trump’s tariffs make goods imported from countries playing unfairly more expensive. This can encourage consumers to buy goods from companies that nearshore, friendshore or reshore.

This helps protect industries in countries who are playing fairly from unfair competition. It promotes economic growth by aligning friendly countries, which can reduce total costs and increase resilience.

The most glaring example of this today is China. Their tariffs on imports are more than double the United States’ (calculated on a weighted-average basis). Thus, do not be surprised that a major topic of discussion over the next several years will be U.S. tariffs on China. Also, do not be surprised if this action/reaction does not bounce back and forth several times in the next few years.

Some say, “Yes, but Trump’s tariffs will hurt the less fortunate in the United States the most.”

They claim the China/U.S. back and forth will cost the less fortunate 4% annually. Meanwhile, tariffs will cost the wealthy 2% annually. Well, if this happens, expect a 4% tax cut for the poor and a 2% tax cut for the wealthy.

To ensure global trade benefits those who play by the rules, leaders must use intelligence, fortitude and skill in complex negotiations. The United States and its allies can approach these challenges with confidence. After all, President-elect Trump famously authored The Art of the Deal – a credential that underscores his mastery in negotiations. If such recognition were academic, he might well have earned a Ph.D. with high honors in the art of negotiation.

Resilience Via Supply Chain Redesign

Trump’s tariffs will incentivize companies to rethink their supply chains (ReGlobalization). This encourages reshoring or nearshoring to friendly countries. Reducing reliance on critical imports from unfriendly countries will enhance national security and economic resilience.

In September 2023 I published “The World Is Flat, Except When It Isn’t: The Yin and Yang of Globalization and Deglobalization.” This laid the foundation for where we are today with global trade and supply chain design. Then in December 2024 I published “ReGlobalization – Redefining Global Supply Chains: Nearshoring, Reshoring and Friendshoring In A Disrupted Global Landscape” after the 47th President of the United States was elected.

The latest paper is a must read. It describes the approach your organization must pursue to respond to the tsunami of tariffs that will begin Jan. 20. Because the supply chain of January 2025 is not the supply chain you should have going forward.

With all of the confusion from the media, your executive teams might not realize that the Trump tsunami of tariffs could be your greatest opportunity ever. You can enhance your competitive positioning by redefining your supply chain through the lens of resilience and optionality instead of cost optimization. The time is now for action. The time is now for ReGlobalization.

But don’t just take my word for it. Read what Davy Karkason, founding attorney for Transnational Matters, wrote in his 27-page paper (bold in the original):

“In a globalized economy, the introduction of trade tariffs acts as a catalyst, setting off a chain of responses among businesses and policymakers aimed at preserving economic security. Such measures often instigate a recalibration of supply chains and provoke businesses to align their global sourcing strategies with shifting regulatory landscapes to sustain consumer demand.”

As I say in my ReGlobalization paper: It is time to Go! Go! Go!

Tariffs + ReGlobalization Can Reduce Inflation

Higher tariffs by themselves will force higher costs for imported goods. Businesses often pass these increases on to customers via higher prices, contributing to inflation. Simultaneously, domestic producers may increase prices in response to higher prices for imported goods, further driving up inflation.

But President-elect Trump is as opposed to inflation as he is in favor of tariffs.

However, ReGlobalization can flip the inflation script. The right combination of nearshoring, friendshoring and reshoring can establish supply chains that are more resilient than current just-in-time practices. Thorough cost, risk and production market analysis can identify alternative suppliers closer to home. These moves can reduce the overall delivered cost of goods.

So, as Newsweek reports, tariffs can result in some short-term one-time jump in prices. But I agree with the economists quoted who believe that these inflationary forces will be minimal.

So, there is a delicate balance. Yes, higher tariffs can create inflationary pressures. But I believe Trump will strategically use tariffs to manage these effects. And companies who successfully ReGlobalize will win – and more importantly, serve their customers quicker and with overall lower costs.

Protecting Domestic Industries for National Security

Tariffs can protect key domestic industries from foreign competition, ensuring that strategic sectors remain robust.

This can maintain national security and economic stability by ensuring domestic production of essential goods and services. In fact, one of the most frequently cited advantages of tariffs is their potential to shield domestic industries from foreign competition, thus preserving jobs in key sectors.

ReGlobalization gives you a chance to boost local production and wages. You can use digitization and automation to bring back goods that are now imported. Trump has demonstrated significant insight in protecting U.S. jobs in industries such as automobiles and electronics by strategically navigating tariffs.

I believe Trump can use his negotiation skills to apply tariffs well. This can help protect domestic jobs. It can also address bigger goals, like controlling inflation and creating fair competition.

The 2025 Tipping Point: Leadership Will Build Resilience and Innovation

Tariffs as import taxes are easy to understand.

However, with respect to trade and economic policy, tariffs can be complicated. And when interwoven with mammoth political agendas, tariffs beget widespread misunderstanding and balderdash.

Examining these issues while you are trying to ReGlobalize to increase your enterprise’s resilience and deal with a world of uncertainty is very, very complex. I believe President Trump will lead us through these key political issues and global challenges. His leadership can create order and prosperity for the United States and countries that are friendly in the future.

Trump will use tariffs as one tool in his toolkit to get the job done. Meanwhile, businesses must face the reality that after the stability of 2015 and the chaos of 2020, the supply chain world is ready to enter a third tipping point in 2025. This is the most significant time in the history of the world and the history of supply chain to be innovative, resilient and make major contributions to the success of your company.

Tompkins Ventures is ready to support companies ReGlobalize in response to the Trump tariffs. Contact us today and Go! Go! Go!

Related Reading

• Supply Chain Disruption or Competitive Edge? Choose Wisely
• 6 Strategies to Surf Through the Trump Tariff Tsunami
• ReGlobalization: Supply Chains in a Trump Disrupted World