Take a proactive approach in your business during times of change

Last year, she said many companies came to CohnReznick looking for advice on how to deal with Trump’s barrage of tariffs. Now, she’s seeing the same thing — only in reverse, as companies come calling for help pursuing refunds on the International Emergency Economic Powers Act (IEEPA) duties struck down by the U.S. Supreme Court on Feb. 20.

“We're just taking the analysis that we built ... we're just reversing it,” she said.

Based on the results of a recent poll of EndeavorB2B and ExecutiveEDGE audiences, enthusiasm for pursuing refunds appears mixed. Fifty-one percent of manufacturers said they are already pursuing a refund or expect to do so, but that number is significantly higher than the 32 percent of respondents across all industries who planned to do the same. 

However, Connor said she has seen significantly more follow-through from companies interested in refunds than those reacting to tariff news as it began to dominate the headlines last spring.

She acknowledged inertia can feel safe, but noted it’s not often a winning strategy. 

“Folks don't like change, and they don't like change when it's a crisis, and this was a little bit of a crisis when it first happened,” she said. 

CohnReznick continues to advise companies on tariffs — on the same day IEEPA was struck down, Trump added more duties under a different authority — as well as on refunds. 

Connor said her recommendations for dealing with tariffs haven’t changed: Study the Harmonized Tariff Schedule (HTS) codes of what’s subject to tariff, monitor where goods come from, and consider changing suppliers or holding imported products in tariff-friendlier countries for a time, so they can be re-flagged under lower rates. 

“If you moved a country of origin — let's just assume you stayed with the same supplier, but you asked that supplier to route and hold, and you were using your warehouse network maybe a little bit differently ... through a designated hold period. ... we would work with clients to understand what's the net impact of that on this year's financials, or how does that change your cost of goods?” Connor said. 

Last year, companies walked away from that analysis without urgency to implement it. Connor said she hopes they don’t continue making that mistake, because her firm does not anticipate the Trump administration will back down from its approach to trade. 

She summed up some companies’ response to analysis of their supply chains this way: “ ‘Thank you so much. Now, I know I have Option A, B and C. I have a good line of sight on what the net impact is, if I do A vs. B vs. C.’ And people would do nothing, because the hope and prayer was, ‘This is going to all change tomorrow and go away.’ ” 

But it didn’t. 

Like a boat jostled by rough seas, Connor said companies are struggling through an era of disruption. 

To cope, she said, they should be planning how to optimize and diversify their supply chains, minimize costs and the impact of tariffs, and deal with contingencies. 

While it can be disruptive, change, she noted, also creates opportunities. 

“This is not all bad news,” she said. “There's opportunity here. … That opportunity could be around some things that are long overdue in terms of how you need to optimize your supply chain, diversify it, harden it. … Maybe it's forcing you to do some internal housekeeping that you've actually been thinking or talking about for a while. It's also an opportunity to really understand where your cost variability is coming from if you don't already have that, down to the product line, and then all the way to components. ‘What are the options that I have for sourcing?’ “ 

Firms like Connor’s, along with tools such as ERP systems, can help companies get a handle on such issues.

How they follow up is up to them.

But some companies will find an advantage, allowing them to thrive, rather than sink. 

“There's always opportunity in there. Always. Somehow, some way, it's hard to not find something you could do differently that can make the situation better or help you do more of a good thing. You just have to find it,” Connor said.