Document Type

Article

Language

eng

Publication Date

10-2019

Publisher

Elsevier

Source Publication

Journal of Purchasing and Supply Management

Source ISSN

1478-4092

Abstract

Recent protectionist trends around the world have raised interest in newly enforced or increased tariffs and their effects on global supply chains. For firms sourcing globally, tariff introductions or increases significantly affect importing costs, which ultimately affect product costs. Such tariff changes may incentivize firms to adjust their supply base to mitigate these cost increases, thus altering the structure and complexity of firms' supply bases. In this paper, we first characterize the U.S. tariff landscape from 1997 to 2017. We then develop a conceptual model to explain how the severity and timing uncertainty of expected tariff increases influence a firm's speed of adapting to the changing tariff environment. Specifically, we explore firms' propensity to form or delete ties to suppliers, which influences supply base complexity. Moreover, we consider factors that moderate the relationship between severity, timing uncertainty, and supply base complexity, including a tariff's geographical scope, a firm's relative purchase spend, and supply risk. Our conceptual model offers both research and managerial implications.

Comments

Accepted version. Journal of Purchasing and Supply Management, Vol. 25, No. 4 (October 2019): 100556. DOI. © 2019 Elsevier. Used with permission.

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