Navigating North American Procurement Challenges Amid Rising Tariffs with AI

Byline: Jonathan D. Silverman
North American manufacturers struggle with higher costs and supply chain uncertainties as tariffs on raw materials, components, and finished goods fluctuate. Trade tensions between the U.S. and China and restrictions on European imports have increased expenses for industries that rely on aluminum, steel, and electronic parts. According to the U.S. International Trade Commission, tariffs on aluminum and steel alone have resulted in a 15 percent increase in production costs for U.S. manufacturers since 2018.

Many companies seek ways to reduce reliance on foreign suppliers while managing production costs. This shift has renewed focus on domestic and nearshore manufacturing solutions, but finding local suppliers with the right capabilities remains a challenge. Traditional procurement processes, often slow and reliant on personal networks, are inadequate in today’s high-pressure trade environment.

AI-Driven Procurement Offers a Competitive Alternative

Manufacturers are turning to artificial intelligence for supplier matching to address supply chain bottlenecks. AI-driven procurement platforms analyze technical specifications, production capacity, and geographic factors to connect buyers with the right manufacturers in real time. Unlike conventional sourcing methods, which rely on manual searches and outdated supplier databases, AI can instantly process millions of data points, helping businesses make informed decisions.

"Manufacturers are dealing with a situation where every sourcing decision has long-term cost implications," said Derek Tanner, CEO of Orderfox, the company behind Partfox. "AI provides real-time visibility into supplier capabilities, reducing the risks associated with unexpected tariffs and trade restrictions."

The ability to identify local and regional suppliers quickly has become essential. AI-driven platforms enable manufacturers to compare production costs across multiple locations, allowing them to shift sourcing strategies as trade policies evolve.

Partfox Uses AI to Match CNC Buyers and Manufacturers

One sector seeing significant gains from AI-driven procurement is CNC machining, where precision and efficiency are crucial. Partfox, an AI-powered supplier-matching platform, helps manufacturers find the right CNC supplier without commissions or hidden fees. By analyzing part designs, material specifications, and machine capabilities, the system connects buyers with suppliers that meet their exact production needs.

Traditional supplier searches often involve weeks of outreach and negotiations, which can delay production schedules. Partfox's algorithm eliminates this lag by providing instant supplier matches based on real-time capacity data. "Supply chains are more volatile than ever," said Timur Göreci, Orderfox's CRO. Manufacturers need a sourcing tool that adapts to trade conditions instead of one that reacts too late."

Unlike some procurement platforms that charge transaction-based commissions, Partfox allows suppliers and buyers to negotiate directly. This model provides a cost advantage, particularly for manufacturers looking to cut expenses amid rising tariffs.

Tariffs Are Reshaping North American Supply Chains

The 2024 U.S. trade policy updates introduced new tariffs on electronics, automotive parts, and machinery, prompting businesses to reconsider offshore manufacturing. A National Association of Manufacturers (NAM) study found that 58 percent of U.S. manufacturers actively seek nearshore or domestic alternatives due to increased trade barriers.

Due to USMCA trade agreements, Mexico and Canada are emerging as attractive sourcing destinations. However, securing reliable suppliers in these markets is a challenge. AI-driven procurement tools help manufacturers navigate regional trade policies while maintaining production timelines.

For smaller businesses that lack in-house supply chain teams, AI-based supplier matching levels the playing field by providing access to vetted manufacturers, reducing the risk of sourcing delays.

AI Procurement is Becoming the Industry Standard

Manufacturers that adapt to AI-driven procurement are gaining an advantage in a market defined by uncertain trade conditions and rising costs. AI does not eliminate tariffs but provides a toolset that helps businesses find alternatives faster, avoid unnecessary expenses, and build more resilient supply chains.

Industry data suggests that AI adoption in procurement is skyrocketing. According to Gartner Research, over 60 percent of manufacturers plan to implement AI-driven supplier matching by 2026. As companies seek ways to manage costs and navigate trade policies, AI is becoming a necessary tool rather than an optional upgrade.

"AI sourcing is shifting from a competitive edge to an operational necessity," Tanner said. "Manufacturers that integrate AI-driven supplier matching today will have a stronger supply chain than those that wait for trade conditions to stabilize."