One of the most pressing topics in freight today is how companies can use predictive analytics to stay ahead of global trade disruptions. Anyone who has been paying attention understands how many disruptions there have been to global trade in the last few years, especially under the current administration.
For nearly three decades, Patrick Frith has worked in cross-border logistics, helping companies navigate the complexities of international trade. As Avalara’s senior director of growth and cross-border, he’s seen it all, from regulatory shifts to compliance headaches that have tested even the most seasoned supply chain professionals. But nothing, he says, compares to what’s unfolded in 2025.
“I can tell you what’s happened in the last ten months has been the most chaotic, turbulent time of my career in cross-border,” Frith said.
The chaos began in February when the current administration set the stage with concerns about fentanyl, illegal immigration on the Southern border, and counterfeit goods. What followed was a rapid-fire sequence of tariff announcements, trade negotiations, and policy reversals that left the global shipping community scrambling to keep pace.
Brexit is often considered the most disruptive trade event in recent memory, but Frith says there’s no comparison.
“This is Brexit on steroids,” Frith said. “Things are changing every day. Deadlines are up and implementations are happening not in years, but in days.”
While Brexit unfolded over approximately three years with clear benchmarks and staged implementation, the 2025 tariff situation has been anything but predictable. Brexit, despite its complexity, was telegraphed. Companies had time to prepare, adjust supply chains, and develop compliance strategies. The current environment offers no such luxury.
“With Brexit, there were a few delays along the way, but everyone was prepared,” Frith said. “And even then, on the day of implementation, there was still a bit of chaos.”
In 2025, changes are being announced and implemented within days, sometimes hours. For shippers who are accustomed to planning quarters or even years in advance, the whiplash has been severe.
The cascade began in earnest in March when China found itself in the crosshairs with punitive duties. Then came April 2, when 51 countries received reciprocal tariffs during a Rose Garden event that sent shockwaves through the logistics industry. Trade negotiations followed, with the United Kingdom emerging first with a deal signed when Prime Minister Starmer attended the G7 meeting in Canada.
About 15 trade deals have been negotiated over the past several months, but significant gaps remain. China’s tariff situation remains on pause, as does Mexico’s, with both negotiations still ongoing. Canada finds itself in turmoil, and numerous other countries are still working through their agreements with the United States.
“It’s not over, but the dust is beginning to settle,” Frith said, though he cautioned that the situation remains fluid and subject to change at any moment.
The initial response from many companies was simply to freeze. Strategic planning became nearly impossible this year as news cycles brought fresh announcements daily.
“I would say the first response for many people was to act like a deer in a headlight,” Frith said. “It was a freeze. ‘Let’s see what happens tomorrow,’” Frith recalled. “‘Let’s see what gets put on hold. Let’s see what’s going ahead.’”
This paralysis extended from April through early summer, with organizations waiting to see which way the wind would blow before committing to any particular strategy. The United States market, despite the uncertainty, remains too important for most global shippers to abandon entirely. But the importance varies significantly depending on each company’s specific business model and geographic focus.
“The US is important to everybody,” Frith said. “It’s a big market, but it’s of varying importance to different organizations, so we’ve seen a whole range of strategies and approaches to this.”
When a 90-day pause was announced, many companies seized the opportunity to front-load inventory into the United States, building up warehouse stock to absorb short-term headwinds and capture the temporarily lower tariff rates. But that window is rapidly closing.
“The China pause is up in about two weeks,” Frith said. “The Mexico pause is up in about a week. So that window now is pretty much shut.”
With inventory front-loading no longer a viable long-term strategy, tariff engineering is a new approach that some organizations are adopting. This strategy involves diversifying sources of supply to minimize duty liabilities by sourcing from countries with more favorable tariff rates.
“If you were supply ordering your raw materials, your widgets, your finished goods from a certain country which is now suffering from a punitive duty, you suddenly have to ask whether you can order that same raw material, that same widget, that same finished good from another country with preferential rates in comparison and import it from there to reduce duty liability,” Frith said.
The sports manufacturer Nike provides a compelling case study. Facing a $1 billion annual tariff burden because 16% of its footwear for the U.S. market was being imported from China, the company undertook an aggressive tariff engineering initiative. Their goal was to reduce Chinese imports to single-digit percentages in 2026 and dramatically cut their duty exposure.
This strategy requires sophisticated analysis and planning. Companies have to evaluate alternative suppliers, assess product quality and reliability, negotiate new contracts, and make sure that the logistics infrastructure can support the shift. But for organizations facing nine-figure tariff bills, the investment is worthwhile.
Beyond sourcing strategies, companies are focusing intensely on ensuring their product catalogs are completely compliant. HS classifications (the standardized codes used to classify traded products) and countries of origin are now under intense scrutiny. Any errors can result in shipments being delayed, abandoned, or returned to origin.
“We’re seeing organizations doing everything they can to ensure that their product details, their HS classifications, and their countries of origin are absolutely one-hundred percent compliant because that is under the microscope,” Frith said.
The scale of the challenge is staggering. In a typical year, the United States makes approximately 50,000 tariff changes. These are routine adjustments that happen across various product categories throughout the year. But according to Frith, 2025 has been anything but typical.
“So far year to date, over 600,000 changes have been made,” Frith said. “If you try and get your head around the number of changes and how fast they’re happening, you’re just going to get yourself in a complete muddle.”
This explosion in tariff changes (which is more than a tenfold increase over normal years) has rendered traditional manual compliance methods obsolete. The person in the corner office with a spreadsheet simply cannot keep pace with changes that can have enormous financial implications.
Adding to the complexity is the elimination of the de minimis threshold for certain imports. Since 2016, when the Obama administration raised the threshold from $200 to $800, the de minimis provision allowed duty-free clearance for low-value shipments. This facilitated enormous growth in e-commerce and cross-border trade, which led to faster, more efficient shipping for millions of small-value transactions.
That era has ended, according to Frith. The elimination of de minimis, he says, rivals the tariff changes themselves in terms of impact on the industry.
Now, instead of the streamlined Type 86 clearances that enabled duty-free entry, shippers must use Type 1 (formal entry) or Type 11 (informal entry) clearances, both of which require significantly more information and expertise. This represents a fundamental shift in how cross-border e-commerce operates, forcing companies to skill up their teams and gather additional data for each shipment.
“We’re seeing organizations now switch from what was the de minimis, no duty clearance to different types of clearances, which means skilling up,” Frith said. “You need more information. You need more knowledge to be able to execute these clearances.”
With 600,000-plus tariff changes to track, manual compliance is no longer feasible. Companies with hundreds of thousands or millions of product listings simply cannot maintain accurate HS codes and duty calculations using traditional methods. The only viable path forward is automation powered by artificial intelligence.
“Automation is now the only way you can keep on top of these things,” Frith said.
The United States uses 10-digit HS codes, and every product imported into the country must be classified under one of approximately 21,000 codes. Each code is linked to specific duty rates, which now vary based on Section 232 actions, Section 301 actions, reciprocal tariffs, and country of origin. For a company importing diverse product lines from multiple countries, determining the correct classification and duty calculation for each item is a monumental task.
“If you don’t know your HS code, you have no idea what your duty is going to be when it arrives into the country,” Frith said. “The Rosetta Stone is determining the HS code.”
Avalara’s technology addresses this challenge by using AI to classify products in real time. Companies can enter product information in multiple languages, and the system recognizes the product and deduces the accurate HS code. Combined with country of origin and entered value, the technology can instantly calculate duty obligations.
“With AI, we’re able to recognize what’s being entered in a number of languages,” Frith said. “We can deduce the accurate HS code, and therefore, knowing the country of origin, knowing the entire value, knowing the HS code, we can provide duty calculation. This all happens in real time,” he said.
This capability eliminates the need for companies to hire armies of staff to manually classify products and calculate duties. More importantly, it ensures companies can stay current with tariff changes that happen overnight.
“You could be up to date manually today, but tomorrow morning, at one minute past midnight, you’re out of date,” Frith said. “But technology allows you to stay current in real time so that you’re making the right decisions based on the products that you’re importing into the US.”
Frith warns shippers not to expect things to settle down anytime soon. Companies that assume 2026 will bring stability are setting themselves up for disappointment.
“We haven’t come to the end of this yet,” Frith said. “There’s more change coming. Things are not going to settle down all of a sudden before the end of the year.”
He anticipates additional changes in clearance procedures and further tariff adjustments. Additionally, there will be a review and revision of HS codes going into 2026, which will require companies to update their systems and processes yet again.
The advice for companies navigating this environment is to remain nimble and embrace multiple strategies simultaneously. Tariff engineering should be an ongoing exercise, not a one-time project. Technology adoption is now essential for survival, according to Frith.
“Make sure your organization is nimble,” Frith said. “Make sure you’re open to a number of these strategies.”
For global shippers, 2025 has been a baptism by fire. The combination of rapid tariff changes, the end of de minimis, and the need for unprecedented levels of compliance vigilance has fundamentally altered the cross-border landscape. Those who have adapted are positioned to weather whatever comes next. Those who haven’t may find 2026 even more challenging than the year that preceded it.
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