A New Case for ‘Just-in-Case’: How Businesses Can Navigate 2025’s Tariff Crisis

The 2025 tariff surge: A new supply chain crisis

The recent implementation of U.S. tariffs has significantly impacted industries dependent on international trade. In March, substantial levies were introduced on all imports from China, Canada, and Mexico, while the rate for aluminum and steel products rose from 10% to 25%.

On April 2, further adjustments were made, including the imposition of a universal 10% tariff and higher rates for countries such as China, which are perceived to engage in unfair trade practices.

This escalation presents a major challenge for businesses that rely on cost-effective international sourcing. Increased import costs directly affect pricing, margins, and overall competitiveness. To maintain profitability and avoid passing costs to consumers, companies must act swiftly to implement strategic solutions.

Why ‘just-in-case’ inventory is the answer

One of the most effective ways to minimize the impact of tariffs is to accumulate inventory in domestic warehouses before additional tariffs take effect. This strategy, known as "just-in-case" logistics, ensures businesses have ample stock on hand to continue operations smoothly, without immediate exposure to fluctuating trade policies.

It’s the opposite way to doing business during stable times when companies rely more on a “just-in-time” model of receiving goods only when they’re needed.

While relocating manufacturing to the United States might seem like a logical solution, it comes with significant hurdles: High operational costs, labor shortages, and complex regulations that make reshoring a long-term, rather than immediate, fix. In contrast, expanding domestic warehousing capacity provides a faster, more practical solution.

Real-world examples: Companies embracing ‘just-in-case’

Many businesses have already begun leveraging just-in-case inventory strategies to counteract the impact of tariffs:

• Costco has increased its inventory purchases due to tariff uncertainty, resulting in higher supply chain costs.
• Sony and Suntory are reserving inventory and adjusting production strategies in response to potential U.S. tariffs targeting Japan.
• Steve Madden accelerated plans to shift production out of China and is storing up goods to avoid potential tariffs.
• Lifetime Brands, owner of KitchenAid and Farberware, increased inventory levels to protect against potential tariff impacts.
• The "Big Three" U.S. automakers — Ford, General Motors, and Stellantis — may accelerate inventory buildup due to paused tariffs on Canadian and Mexican automotive products.‍
• Taiwan Semiconductor Manufacturing Company (TSMC): TSMC has committed to a $100 billion investment in U.S. chip manufacturing over the next four years, including the construction of three new chip plants, two advanced packaging plants, and a research and development facility in Arizona. This move aims to diversify TSMC's manufacturing footprint and reduce reliance on overseas facilities, thereby mitigating risks associated with tariffs and supply chain disruptions.
  

  “One of the most effective ways to minimize the impact of tariffs is to accumulate inventory in domestic warehouses before additional tariffs take effect. This strategy, known as ‘just-in-case’ logistics, ensures businesses have ample stock on hand to continue operations smoothly, without immediate exposure to fluctuating trade policies.”

  — Clement Yew, Director of Business Development, Southeast Asia, AutoStore

  
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• While specific details regarding Intel's practices of stocking key materials within U.S. borders are not publicly disclosed, the company's aggressive expansion of domestic manufacturing facilities indicates a concerted effort to stabilize its supply chain. By localizing production, Intel aims to mitigate the impact of rising tariffs and ensure a steady supply of semiconductors to meet growing demand. Intel has been actively enhancing its domestic manufacturing capabilities to bolster supply chain stability amid rising semiconductor tariffs. In November 2024, the U.S. Department of Commerce awarded Intel approximately $7.9 billion in federal grants under the CHIPS Act, aiming to boost semiconductor production within the United States. This funding supports Intel's significant investments in new fabrication facilities across Arizona, New Mexico, Ohio, and Oregon, reflecting a strategic shift toward domestic manufacturing to mitigate risks associated with international trade tensions.

How AutoStore enables a ‘just-in-case’ strategy

While building up emergency inventory is a logical response to tariffs, it creates another challenge — warehouse space. That’s where AutoStore comes in.

AutoStore, the world’s densest automated storage and retrieval system, allows businesses to maximize warehouse capacity by up to 400% compared to traditional racking. This means companies can hold significantly more inventory within the same footprint, reducing the need for costly warehouse expansions.

Additionally, AutoStore’s modular design ensures businesses can scale their automation capabilities as needed. If companies need more storage, they can add Bins; for increased throughput, they can integrate more Robots.

This flexibility makes AutoStore an ideal solution for businesses navigating supply chain uncertainty.
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Learn how Intel uses AutoStore to bolster its domestic chip manufacturing capabilities.
→  Read case study

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Preparing for the future: Act now

As tariff policies continue to evolve, businesses cannot afford to take a reactive approach. Pivoting back to a just-in-case strategy used during COVID-19 ensures resilience against tomorrow’s disruptions. By investing in warehouse automation solutions like AutoStore, companies can adapt quickly, optimize storage, and stay ahead of supply chain challenges.

The paradigm shift from just-in-time to just-in-case logistics is no longer a temporary adjustment — it’s a necessity in today’s volatile global trade environment. To secure your supply chain and maintain a competitive edge, now is the time to rethink your strategy and take action.