U.S. Tariff on $1B Canadian Imports Takes Effect

What if we must source 100% of Canadian products from alternative suppliers?

Model a complete shift of $1 billion in annual Canadian sourcing volume to Mexico, Asia, or domestic suppliers. Simulate extended lead times (add 2-4 weeks for Asian sources), increased unit costs (estimate 8-15% premium for tariff-free alternatives or domestic sources), and inventory carrying costs from safety stock buildup. Assess service level impact if sourcing transitions take 4-8 weeks.

What if lead times from alternative suppliers add 3-4 weeks to our cycle?

Simulate the operational impact of transitioning to Mexico (add 1-2 weeks) or Asia (add 3-4 weeks) as primary sourcing regions for products previously sourced from Canada. Model increased safety stock requirements, potential service level degradation, and working capital impacts from extended payment terms and higher inventory carrying costs.

What if unit costs rise 10-12% due to alternative sourcing premiums?

Model a cost increase scenario where switching to tariff-free alternative suppliers or domestic producers results in 10-12% higher per-unit costs. Assess gross margin compression, required price increases to customers, and volume impact if customers seek competing alternatives. Calculate total landed cost including higher transportation and inventory carrying costs.