Why Businesses Must Act Now to
Avoid Tariff Impact
Companies are being urged to take action now to reduce the effects of new tariffs on indirect spend categories, according to analysis from LogicSource.
LogicSource, known as a leader in procurement services and technology, published its comprehensive LogicSource 2025 Tariff Impact Analysis, providing support for businesses set to deal with the proposed tariff changes which are set to have a knock-on effect on indirect spend categories.
The company is purpose-built to drive profit improvement, mitigate risk, and ensure supply chain continuity through better buying. LogicSource focuses exclusively on the sourcing and procurement of indirect goods and services, which typically represent 20% of an organization’s revenue and the area of greatest spending inefficiency.
These tariffs are targeting goods from Mexico, Canada and China – which are set to take effect on January 20, 2025.
Why companies must act now
LogicSource is now pleading with companies to act now, as it looks to reduce risk and maintain operational stability.
The reports highlight the cost increases, which LogicSource warns are “significant”. These include potential increases of 20-30% in IT hardware, 15-25% in plastic packaging and 30-60% in HVAC systems. The key findings from the report show how these changes could directly affect 90% of IT hardware spend, 80-90% of packaging materials, and 80% of construction and capital equipment.
“With the uncertainty surrounding upcoming tariff changes, this report highlights the impact to indirect spend categories such as IT, facilities, and corporate services, which many organizations tend to overlook and can represent a significant base of expenses,” says Dave Pennino, CEO of LogicSource.
“Companies that act quickly and intentionally can take this moment to optimize costs, strengthen supplier relationships and build long-term stability.”
Five vital steps to mitigate risks
LogicSource’s report outlines five critical steps for companies to mitigate risks and maintain stability:
- Prioritise critical needs: Focus on high-impact spend categories, such as IT hardware, packaging and construction materials.
- Explore alternative sourcing: Shift to low-tariff or domestic regions to ensure supply continuity.
- Expand supplier networks: Diversify sourcing to reduce reliance on single suppliers.
Strengthen negotiation strategies: Collaborate with suppliers to optimise agreements and reduce tariff burdens. - Enhance inventory management: Leverage AI and bulk purchasing to adapt supply chains effectively.
Tariffs can significantly impact consumer costs
“The tariffs imposed in 2018 significantly impacted consumer costs, driving up prices for imported goods like electronics, furniture and appliances,” adds James Bouchard, Associate Partner, Centre of Excellence at LogicSource.
“With higher percentages and broader scope, the latest proposed tariffs are expected to have an even greater impact on consumers and businesses, driving up costs across a wider range of imported goods and amplifying the pass-through effect on prices.”
The phased implementation of tariffs is expected to begin in Q1 2025 and escalate through Q4. Categories such as electronics, industrial components and packaging materials will experience the earliest impacts, with broader categories following.