Tariffs Aren't Just a Finance Issue—They’re a Business Killer

Abstract

This episode of Not Your Grandpa’s JD Edwards features Moe Shujaat, VP of Application Advisory at ERP Suites, on why tariffs in JD Edwards are a strategic concern. He explains how volatile regulations and high rates can erode margins if not tracked in product costs, and stresses accurate master data, proactive accounting, and supplier transparency. Short-term fixes include proper landed cost setup and reconciliation; long-term success requires automation, cross-functional alignment, and agile pricing strategies.

Table of Contents

1. Introduction

2. Why Tariffs Are More Than a Financial Issue

3. Impact on Landed Costs and Margins

4. Challenges in JDE Tariff Management

5. Compliance Risks and Consequences

6. Short-Term “Stopgap” Actions on the Buying Side
7. Long-Term Strategies
   
8. Supplier-Side Considerations
9. Long-Term Outlook
   
10. Closing
    

1. Introduction

Road is all about a hot topic that impacts nearly every product-based business. With global trade volatility, nearshoring trends, and compliance demands on the rise, understanding how to handle tariffs in JD Edwards isn't just operational—it’s strategic.

Joining us is Mo Shujaat, VP for Application Advisory at ERP Suites. Mo has worked with manufacturers and distributors navigating these challenges daily.

Mo, how are you doing today? And can you explain a little bit about your role?

I'm doing pretty well. I lead a consulting practice here at ERP Suites. That means I work with our customers on addressing both their JD Edwards problems and their day-to-day business challenges.

A typical day for me might look like:

• A customer calls saying, “We’ve got this one UB not working,”

• Or they’re trying to create a new product line or launch a new initiative and want advice on how to set it up in JD Edwards or in their overall tech stack.

That’s what I do here at ERP Suites for our customers. And you’re also a recurring guest on this podcast—you forgot to add that in, but I’ll let it slide. I like to be humble. This is appearance number two for me. The only person with more is Drew Rob, but that’s just because his schedule is easier to work around.

2. Why Tariffs Are More Than a Financial Issue

Why should tariffs be seen as more than just a financial issue?

Tariffs are a wild topic these days. Unless you’re staying up to date on tariff news daily, you’re already behind. Regulations can change week by week—just last week, new tariff rules were passed or clarified.

Over the last 15–20 years, our global supply chains have been heavily dependent on imports—steel, parts, molds, dyes, and other items for production—from places like China, Vietnam, Brazil, or Canada. Each country now has its own tariff regulations.

And these tariffs aren’t like the 5–10% rates we’ve seen in the past. In some cases, tariffs can be 50%. That means if you buy something for $10,000, you pay $5,000 in tariffs—half the cost of the item. That level of impact can quickly erode your margins.

Not having tariffs set up in your costing data causes companies to have incorrect financial outlooks and inaccurate product costs in JD Edwards. We work with customers who don’t truly know the cost of their products, and that’s a big problem—if you don’t know your true cost, you can’t price correctly, and you don’t know if you’re making money.

3. Impact on Landed Costs and Margins

How do tariffs directly impact landed costs and margins, and why is it dangerous if they aren’t tracked properly?

First, it’s important to understand how costs are tracked in your business and in JD Edwards. Most of our customers use standard costing, along with last-in or weighted average costing. Depending on the method, you’ll handle tariffs differently.

You also have to decide whether tariffs should be included in the cost of your product or booked elsewhere as an administrative expense.

Key data points include:

• Country of origin

• Harmonized tariff code (HTS)

• How you pay tariffs (through a freight broker or directly to CBP)

• Your import schedule (occasional or frequent)

These details determine how tariffs flow through your system. Without them, your tariff liability and product costs are unclear. For example, if you buy steel from Brazil at $100/unit with a 50% tariff, your real cost is $150/unit. If you use cost-plus pricing but don’t include the tariff, your prices stay static and your margins drop.

Companies that aren’t proactive about this will face headwinds. Those who manage it well will gain a competitive edge—5–15% margin swings can make or break a business.

4. Challenges in JDE Tariff Management

What makes managing tariffs in JD Edwards so challenging?

From a JD Edwards standpoint, I don’t think it’s challenging—the system can handle it. The hard part is the external tariff environment. It’s complex, opaque, and full of confusing HTS codes—sometimes there are 17 different codes for the same item.

Another big challenge is master data management. You must constantly update supplier origins, tariff rates, and codes, especially in a shifting environment. Just in the past few weeks, tariffs changed for auto parts and steel.

Many customers struggle with daily master data upkeep—adding tariff data on top just compounds the issue.

5. Compliance Risks and Consequences

Where do most JDE environments fall short on compliance, especially for audit trails and documentation? And what are the consequences if this isn’t handled correctly?

One shortfall is the lack of cross-functional conversations. Tariffs impact finance, operations, and sales—they need a unified strategy. Leadership should meet to decide how tariffs will be recorded, applied, and used in decision-making.

You also need strong supplier relationships. Suppliers may change where they source or manufacture products due to tariffs. You need to know this so you can keep your data current. Treat suppliers as stakeholders and work together on mitigation strategies.

On the customer side, decide whether tariffs will be baked into prices or listed as separate charges. Some customers prefer to see tariffs itemized to track future changes.

If you don’t manage compliance well, you risk fines, delays, and damaged trust with customers and suppliers. Transparency is critical.

6. Short-Term “Stopgap” Actions on the Buying Side

In the short term, companies should:

1. Record country of origin and HTS codes accurately in JD Edwards.

2. Set up landed cost rules to determine how tariffs affect product costs.

3. Decide on the accounting treatment for tariffs and how they post to the GL.

4. Establish a reconciliation process between accrued tariffs and freight broker invoices.

7. Long-Term Strategies

Long-term, build a “center of excellence” for tariff and supply chain management. Keep data updated, monitor regulations, and use automation like orchestrations to keep pricing and costing current.

8. Supplier-Side Considerations

On the supplier side, is absorbing cost sustainable?

It depends on the industry. In some sectors like automotive or steel, tariffs are here to stay. Businesses may have to decide between continuing with overseas suppliers and paying tariffs, or shifting to domestic suppliers with higher base costs.

Some companies will incorporate tariffs into product costs, others will keep them separate and handle them as surcharges. In many cases, this needs to be done at a product or customer level.

The companies that succeed will fight for every margin point—they’ll avoid “death by a thousand paper cuts” by managing 2–5% swings carefully.

9. Long-Term Outlook

Will companies shift toward automated price updates or renegotiate terms with customers?

Everything’s on the table. This is a new environment for most of us. Creativity and deep system understanding will be key. If you’re not already familiar with landed cost setup, advanced pricing, and orchestrations in JD Edwards, you’re behind. Build that expertise now so you can stay dynamic and responsive.

10. Closing

If tariffs are keeping your leadership team up at night, you’re not alone—and you don’t have to go it alone. The ERP Suites team has deep experience helping JD Edwards users configure smarter, faster tariff visibility and strategy. To connect with Moe or learn more, visit erpsuites.com.

That’s a wrap on today’s episode of Not Your Grandpa’s JD Edwards. If this sparked ideas for your JD Edwards setup, subscribe, leave a review, and share this episode with your operations or finance teams. Until next time—keep asking the right questions and stay ahead of change.