KPMG hosted its Tariff Modeller Demo Workshop on August 6, introducing a data-driven platform that enables businesses to model potential US tariff scenarios and craft more strategic export plans in response.

Developed to support trade and customs planning, the Tariff Modeller enables businesses to simulate how various US tariff regimes, such as Section 301, Section 232 of the Trade Act, the Reciprocal Tariff Act, and the International Emergency Economic Powers Act (IEEPA), impact specific HS codes, product groups, and countries of origin. Users can build hypothetical supply chain setups, compare import duties across sourcing alternatives, and evaluate cost-saving opportunities by shifting production or adjusting the origin of goods.

(L-R) Vuong Quang Thuan, director of Trade and Customs at KPMG Vietnam" and "Nguyen Nhat Linh, director of Trade and Customs at KPMG

"Tariff Modeller is not just a tax calculator, it’s a strategic map," said Vuong Quang Thuan, director of Trade and Customs at KPMG Vietnam. "It helps businesses visualise where they stand in global trade and where they could go next. By simulating the impact of a 10 or 25 per cent tariff across multiple sourcing countries and producers, companies can make better decisions, strengthen their pricing strategy, and reinforce their negotiating position with US buyers."

One of the model’s most powerful features is its Wildcard Modelling capability, which allows users to manually input tariff scenarios by HS code, country of origin, and manufacturing location.

For instance, businesses currently sourcing from China can use the model to test the benefits of switching to Vietnam. In one illustrative scenario, total import duties dropped from $35.4 million to $12.6 million simply by shifting production from China to Vietnam and ensuring goods’ origin, a reduction of nearly 65 per cent.

Nguyen Nhat Linh, also a director of Trade and Customs at KPMG, pointed out that the tool is especially useful for long-term planning.

"Many companies are reactive when it comes to tariffs, they only respond once duties are imposed," she said. "But with this model, Vietnamese manufacturers can take a more proactive approach by anticipating potential policy shifts and adjusting supply chain configurations in advance. This forward-looking mindset is critical in today’s volatile trade environment."

The model also includes built-in logic to simulate how tariffs apply based on product composition, especially under policies like Section 232 that target metals such as steel, aluminium and copper. For simulation purposes, the system assumes a 50 per cent metal content within relevant products.

However, KPMG experts stressed that this is only a default assumption. Actual tariff liabilities will vary depending on the Bill of Materials (BOM) and detailed product composition submitted by the business.

Another key point is that the Tariff Modeller does not automatically assess origin qualification. Instead, it relies on inputs such as Certificate of Origin, Regional Value Content, or BOM data provided by the company. This means that accurate and complete data from businesses is essential for reliable analysis.

"The quality of output depends entirely on the quality of input," noted Thuan. "If a company enters incomplete or outdated BOM information, the model may misestimate the tariff exposure. That’s why our advisory work also involves helping clients clean up and structure their data before simulation."

Tariff Modeller also allows users to export customisable reports, enabling effective internal communication and informed negotiations with overseas buyers.

"Vietnam is increasingly seen as an alternative sourcing hub to China, but that narrative must be backed by data. This tool helps quantify Vietnam’s advantages in concrete terms, using actual duty reductions and origin-specific insights. For companies pitching themselves to global buyers, that data can be a game-changer," said Linh.

Tariff Modeller Demo - Pivot table and report creation. Photo: KPMG Vietnam

During her speech at the workshop, Linh revealed that the Tariff Modeller’s pivot table and report creation feature allows users to export customized reports with selected data fields, offering insights tailored to their specific needs.

"This functionality enables businesses to focus on the most relevant information, leverage data to support strategic decision-making, streamline internal reporting workflows, and easily share results with a wide range of stakeholders," she said.

Ultimately, as Vietnam positions itself as a competitive alternative in global supply chain shifts, tools like Tariff Modeller provide a strategic edge, offering not just compliance, but foresight and agility in a volatile trade landscape.

KPMG can support businesses by first assessing their current tariff exposure using the Tariff Modeller Analytics Tool, providing a data-driven view of potential risks under various trade policy scenarios.

"Based on these insights, KPMG is working closely with companies to develop targeted cost-saving strategies aimed at mitigating tariff impacts. Through comprehensive scenario planning, the team helps businesses balance cost, quality, and supply availability, identifying optimal sourcing configurations," stated Linh.

"KPMG also assists in creating a phased action plan that prioritises high-impact areas for maximum efficiency. Finally, the firm offers hands-on support in implementing sourcing shifts or other tariff mitigation initiatives, ensuring strategic execution and long-term resilience."