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Who Owns Tariffs in Your Business?

by | Mar 20, 2025 | Supply Chain

Tariff Ownership

Preface: It Didn’t Happen, But It Should

Who owns tariffs? Who, in your company, develops strategic and operational plans to mitigate the effects of tariffs on your business?

Well, the CEO of ABC Company, a $19 billion landscape and yard manufacturing and distribution firm, wanted to know. The executive committee meets on the third Thursday of each month, ten months a year. They do not meet in person in December and June.

On Wednesday, January 22, 2025, the Executive Committee enjoyed a “Welcome to 2025” dinner. The next day, the CEO decided to open the meeting by bringing up the accountability gap. The CEO begins:

“Welcome to 2025. A little hard to say 2025, as my brain seems stuck in 2021. But yes, 2025 it is. I am very proud of all we have accomplished in the past and very enthusiastic about 2025 and our future.”

“As we informally discussed last night, the Trump administration is back in the White House. I am impressed with the openness, aggressiveness and magnitude of his planning and execution over the last three days. I mean, wow!”

At this moment, a picture of President Trump appears on the screen. He says his favorite quote: “Tariff is the most beautiful word in the dictionary.” The CEO pauses and then asks the 12 executives to respond to the next prompt appearing on the screen:

“Of our twelve roles, which one of us is point on tariffs?”

A High-Performing Team Cannot Figure It Out

Now, a little background about ABC Company’s executive committee. The 12 members are:

  1. Chief executive officer (CEO): Overall company leader
  2. Chief operating officer (COO): Focuses on daily operations and global manufacturing
  3. Chief financial officer (CFO): Manages financial strategy, reporting and risk management
  4. Chief marketing officer (CMO): Leads marketing, branding and customer engagement
  5. Chief sales officer (CSO): Oversees sales strategy and execution
  6. Chief supply chain officer (CSCO): Responsible for the supply chain, procurement and logistics, especially given their global sourcing
  7. Chief human resources officer (CHRO): Manages talent acquisition, employee relations and organizational culture
  8. Chief technology officer (CTO): Oversees technology development and innovation
  9. Chief product officer (CPO): Focuses on product design, development and lifecycle management
  10. Chief legal officer (CLO): Handles legal matters, compliance and intellectual property
  11. VP of manufacturing/operations: Oversees the manufacturing plants in the U.S. and Mexico
  12. VP of international operations: Manages and optimizes partnerships and imports from Asia, Latin America and the European Union

These 12 professionals have worked together for seven or more years, except for the CSCO, who has only been in place for four years. The high-performing team has successfully navigated challenges, including COVID, achieving an established record of economic growth.

The global company has trading partners worldwide, including the European Union, Asia, North America and Latin America. Obviously, their major market is the United States. So, tariff rates, trade wars and retaliatory tariffs could affect their future.

The screen goes blank until all twelve votes for “who owns tariffs” are in. The results appear, revealing that at least one vote was cast for each of the following positions:

  • Chief executive officer (CEO)
  • Chief operating officer (COO)
  • Chief financial officer (CFO)
  • Chief supply chain officer (CSCO)
  • Chief product officer (CPO)
  • Chief legal officer (CLO)
  • VP of manufacturing/operations
  • VP of international operations

Who Owns Tariffs? Too Many People …

The CEO looks at the results.

“Oops! Wow! Now what?” the CEO exclaims. “Folks, I anticipated us not having a good answer to this question. But I didn’t expect us to think eight of the 12 are responsible for tariffs. We have a lot of work ahead.

“I’d like our chief supply chain officer, along with her chief procurement officer, to chair a committee. This committee should include these eight executives. The team should develop an integrated approach to who owns tariffs. They will report back to us at each executive committee meeting until we adopt a clear path forward.”

I based this fictional example on my interviews with real executives. Virtually all of them had no good response to my question, “In your firm, who owns tariffs?”

That question is paramount in this day and age. President Trump has imposed higher tariffs on imports from China. He is not exempting tariffs on steel. He has paused tariffs on Canada and Mexico for goods that comply with the USMCA until April 2.

This leaves everybody worried about the potential for higher prices.

The Tariff Accountability Gap

Yet despite the concern over potential price increases, organizations have no clear responsibility for strategy on import taxes. This lack of accountability can significantly affect businesses who are navigating the complexities of international economics.

These taxes impact multiple facets of an organization. And, as illustrated above, responsibility could fall on executives ranging from the CEO to the VP of international operations.

A sudden change in tariff policy can ripple through a company, affecting profit margins, operational efficiency, even customer satisfaction.

Despite this, many organizations still operate in silos, with no single department or leader taking ownership of tariff-related issues. This fragmented approach can lead to missed opportunities, inefficiencies and a lack of preparedness for policy changes.

The root of this issue lies in the traditional structure of organizations. Historically, tariffs were seen as a niche concern handled by specialized teams. However, the evolving global trade landscape has made tariffs a strategic issue requiring cross-functional collaboration.

Breaking down silos is easier said than done. Organizational muscle memory often resists change, and assigning clear responsibility for tariffs can create tension among departments. Who should take the lead? The answer is not straightforward, and this ambiguity often leads to inaction.

The Consequences of Unclear Tariff Responsibilities

Unclear tariff responsibilities can lead to a range of negative consequences. Here are some of the key issues that may arise:

  • Financial losses: Without clear ownership, businesses may overlook tariff changes or fail to respond strategically. This can lead to unexpected costs, penalties for non-compliance or missed opportunities for tariff exemptions.
  • Operational inefficiencies: Ambiguity in responsibility can delay decision-making. If no team is accountable for monitoring tariff changes, expect supply chain disruptions and inventory mismanagement.
  • Compliance risks: A lack of accountability can lead to non-compliance with customs laws. Your company could face fines, audits or reputational damage.
  • Lost competitive advantage: Companies without clear strategies risk losing their edge. Competitors with well-defined approaches can adjust pricing, sourcing and production more effectively.
  • Cross-departmental conflicts: When responsibilities are not clearly defined, departments may compete or assume others are managing tariffs, leading to confusion and inefficiencies.
  • Missed strategic opportunities: Tariff management isn’t just about mitigating risks. It’s also about leveraging opportunities. Companies that fail to adapt risk falling behind.

I know of companies who have gotten a jump on optionality. They found new sources of production, supply and distribution outside of Asia. They expected nearshoring would reduce lead times. But they have been pleasantly surprised by the quality, production capacity and total landed cost.

Establish Tariff Accountability Going Forward

To address the accountability gap, organizations need to rethink their approach to tariffs. Steps to consider include:

  1. Establishing a ReGlobalization project team: A cross-functional team must assess tariff impacts and develop coordinated strategies.
  2. Investing in training and awareness: Key stakeholders need education on tariffs’ financial, operational and strategic implications.
  3. Leveraging technology: Data analytics and trade management software can help organizations monitor tariff changes and model their impact.
  4. Redefining accountability: Assign a senior leader to oversee tariff-related issues and ensure cross-departmental alignment.

In a world where President Trump has added tariffs to the already ongoing tsunami of disruptions, organizations must adapt. If you’re unsure of where to turn, Tompkins Ventures has expert ReGlobalization teams and coaches ready to help. Reach out. Together, we can break down silos, foster collaboration and redefine accountability.

That’s the path forward for transforming tariffs from a challenge into an opportunity.

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