U.S. companies have been on a tariff roller coaster over the past year. Significant tariffs were implemented at different levels in different countries. Some were eventually overturned by the Supreme Court, but they add another layer of bureaucracy as companies seek possible refunds. Some people turn to AI for help.
Companies like EQI and customs advisory firms like KPMG are using generative AI “to handle all the confusion,” said Brendan Connaron, vice president of finance at EQI, which supplies metal parts and provides supply chain advisory services to manufacturers. The technology can rapidly collect and synthesize vast amounts of data, track tariff changes, model potential supply chain scenarios, and accurately classify goods by government-assigned tariff codes, a highly nuanced system containing more than 17,000 codes.
Emil Stefanutti, CEO of Gaia Dynamics, a software company that provides AI tools to help companies automate trade compliance, said AI is proving particularly useful in this rapidly changing environment because it can reduce compliance errors and save business time. Stefanutti said that, especially in the wake of the Supreme Court ruling, importers can use AI to analyze data on where and when they paid duties, quantify potential overpayments and flag areas that need remediation.
AI can “continuously track and adapt to new rules in ways that humans simply cannot,” Stefanutti said.
AI can save weeks of accurately identifying customs refunds
Consulting firm KPMG has been advising clients on trade compliance for decades, but in the last year in particular, “tariffs have been changing rapidly and furiously,” said Andrew Siciliano, head of KPMG’s global trade and U.S. trade and customs practices.
KPMG launched an AI-powered pricing modeler because company leaders needed real-time data quickly to make decisions.
The company’s customers include many large companies that import goods ranging from auto parts to retail goods to pharmaceuticals and use multiple ports of entry and customs brokers. KPMG obtains its clients’ decentralized customs and product information from suppliers and carriers, which are intermediaries between importers and their transportation providers, and incorporates that data into its tariff modeler, Siciliano said.
This approach helped KPMG clients navigate the process of applying for refunds for overpayments of tariffs resulting from policy changes that took effect after the Supreme Court overturned some tariffs. Many trade rules have subtle exceptions that result in some companies paying multiple duties when they should only have to pay once. Siciliano said his company uses AI to manipulate customer data to better understand which products come from which factories and narrow down which products qualify for refunds.
Mr Conarron said a refund system was in the works but could still cause confusion and uncertainty. He told Business Insider he expects the process to be an “administrative nightmare.”
Before AI, manually sifting through thousands of custom input data points to identify overpayments would take weeks or months, or never happen due to complexity, Siciliano said. Importers can now instruct the AI and provide information instantly.
AI can speed up modeling of complex scenarios
AI also saves weeks of scenario planning time. Importers may wonder how their costs will change if they move their sourcing from China to Vietnam, for example. Instead of weeks of updating multiple spreadsheets, AI models scenarios with just a few clicks of a button, Siciliano said.
Conarron said EQI uses AI in a similar way to model potential procurement scenarios. The company uses Altana, an AI platform focused on supply chain management and trade compliance.
For a potential sourcing move from country A to country B, EQI uses AI to model the total cost, taking into account customs duties, manufacturing costs, and ocean freight. For manufacturing businesses that source thousands of different products from countless locations, “complexity becomes very dense very quickly,” Conarron says. “So AI helps simplify that.” EQI sends simplified data to trade lawyers, who can interpret it within hours, Conarron said.
“We completed work that would have taken weeks in the same day,” he said.
He also said that “AI is not good at critical thinking” and that humans are essential for decision-making. For example, an AI model might say sourcing all materials from one country provides the greatest cost savings, but Conarron says business leaders need to consider the big picture. Supply chain executives, especially in recent years, have learned that sourcing exclusively from one country comes with risks such as product shortages and delays if geopolitical or economic issues stop the flow of trade.