Suppose a metal fabrication company gets the news: the U.S. just raised tariffs on imported steel to 25%. The sales team has forty open quotes sitting in spreadsheets, all priced at yesterday’s rates. Now someone has to go through each one by hand and fix the numbers before a customer signs off on a price that’s already wrong. This consumes time and sometimes loses valuable customers. This guide is all about this.

A tariff is a government-imposed tax on imported goods, ultimately passed on to the consumer. Recent U.S. tariffs on India (50%), China (100%), and Brazil (50%) show how quickly import costs can shift. Tariffs come in two forms: a specific tariff (a fixed fee per item type) and an ad valorem tariff (based on the item’s value).

Trade Codes: The Foundation of Tariff Management

Before an ERP system can manage tariffs, it needs to know a product’s classification code. It comes in two types: The HS Code (Harmonized System Code) is a globally recognized six-digit code from the World Customs Organization. The HTS Code (Harmonized Tariff Schedule) is the U.S.-specific extension of it, adding four more digits that determine exact duty rates.

Get these codes wrong, and you risk shipment delays, penalties, or surprise taxes. When these codes are stored correctly in an ERP, they let the system auto-calculate duties, keep customs documentation compliant, standardize classification across borders, and update pricing automatically as tariffs change.

The Challenges Manufacturers Face

With the U.S. imposing a 25% tariff on steel and aluminium, manufacturers like metal fabricators, who rely on imported metal, are stuck choosing between absorbing the cost or passing it to customers. Two problems compound this: manual price updates (sales teams reissuing quotes by hand as tariffs shift, risking underpriced orders and lost revenue) and constantly changing regulations (missing an HS/HTS code update can get a shipment held at the border).

Beyond that, tariffs quietly drain resources through compliance overhead, slower supplier transitions, forced overstocking, costly product redesigns to use local materials, and reduced competitiveness in global markets.

How ERP Software Handles Tariffs

  • A good ERP system turns tariff management from reactive to automatic.
  • It calculates duties instantly using stored HS/HTS codes.
  • Keeps custom fields for country of origin and classification data.
  • Adjusts prices and quotes in real time as tariffs shift
  • Tracks true landed cost by factoring in freight, insurance, and handling.
  • Supports scenario planning to model supplier or contract changes.
  • In more advanced systems, it connects directly to trade compliance databases for real-time regulatory updates.

Tariffs aren’t going away, and for manufacturers with cross-border supply chains, they’re now a permanent variable to manage. An ERP system helps businesses cope with that volatility & turns tariff management into a competitive advantage.