How Automation Can Help You Tariff Proof Your Warehouse

Updated April 7, 2025

On April 2, 2025, President Donald Trump signed a sweeping executive order imposing massive new tariffs on imports from key U.S. trading partners. The announcement, made from the Rose Garden of the White House, included: 

• A 34% tariff on Chinese goods, layered on top of an earlier 20% duty 

• A 20% tariff on imports from the European Union 

• 24% on Japan, 25% on South Korea, and a range of 10–49% tariffs across other key categories 
  

Markets around the world tumbled within hours, and global supply chains braced for impact. France and China immediately threatened retaliatory measures. The European Commission labeled the move a “major blow to the world economy.” And analysts scrambled to explain the scale and speed of the disruption. 

“The magnitude of the rollout wasn’t just aggressive—it was a full-throttle macro disruption.” 
— Stephen Innes, SPI Asset Management 

Suddenly, the cost of doing business with global suppliers just skyrocketed—and warehouse leaders are left with a difficult question: 

Can your warehouse operation afford to absorb these costs, or is it time to take back control? 

For many manufacturers, distributors, and third-party logistics providers, the answer lies in automation. Specifically, Automated Storage and Retrieval Systems (ASRS) are emerging as a critical tool for building resilience, reducing costs, and protecting supply chains from volatile global trade policies. 

“We’re seeing a shift from cost-driven automation to strategy-driven automation. Companies want flexibility, resilience, and control—and ASRS gives them all three.” 
— Christina Dube, Director of Marketing, Americas at Kardex 

In this guide, we’ll explore what it means to tariff-proof your warehouse and how ASRS technology can help you do it—fast. 

What Does Tariff-Proofing Your Warehouse Mean? 

Tariff-proofing isn’t about avoiding tariffs entirely (though automation can certainly reduce your exposure). It’s about building a resilient, cost-efficient warehouse operation that can absorb or bypass the financial hit of trade policy changes. 

For most companies, especially small and mid-sized manufacturers and distributors, tariffs introduce cost spikes in raw materials, components, and finished goods. Without the deep pockets or diverse sourcing options of large multinationals, even a 10% tariff can wreak havoc on profit margins. 

Here’s what tariff-proofing looks like in practice: 

• Reducing reliance on foreign suppliers (via reshoring or localized safety stock) 

• Slashing logistics and handling costs (to offset tariff-related expenses) 

• Building flexibility into labor and space usage 

• Leveraging automation to improve cost-per-pick, inventory accuracy, and operational speed 

And that’s exactly where ASRS solutions shine. 

How Tariffs are Disrupting Warehouse Operations – And Where Automation Steps In 

Tariffs might seem like a policy issue, but their effects are felt deep in the warehouse. When the cost of importing materials, components, or finished goods rises suddenly, operations teams are forced to make quick decisions—often with limited resources. 

Here are the five key pressure points where tariffs hit hardest—and how ASRS technology can help offset or eliminate their impact. 

1. Tariffs Drive Up Costs—ASRS Helps You Cut in the Right Places 

When tariffs raise the cost of goods, many businesses instinctively look to cut elsewhere—often in labor, logistics, or inventory. The problem? Those are the same areas where performance is most critical. 

Instead of cutting corners, ASRS allows you to cut inefficiency. 

Here are some ways automation can help to reduce costs in your warehouse: 

• Labor Efficiency: ASRS can reduce warehouse labor needs by up to 2/3, allowing you to do more with fewer workers without compromising throughput. 

• Storage Density: By reclaiming up to 85% of floor space, ASRS helps you avoid costly real estate expansions, giving you more room for production or inventory—without a new facility. 

• Accuracy & Productivity: With automated picking speeds up to 750 lines per hour and accuracy rates up to 99.9%, ASRS ensures that every labor dollar and square foot is delivering maximum value. 

“With ASRS, we’re not just helping customers reduce costs—we’re giving them a way to reinvest in resilience, even when their budgets are tight." 
— Mark Dunaway, President – Americas at Kardex Remstar 

2. Tariffs Increase Supply Chain Risk—ASRS Enables Reshoring and Localization 

One of the biggest takeaways from the last few years? Global supply chains are fragile. Tariffs only add more friction to an already unstable system. 

Many companies are responding by reshoring—or at least shifting critical inventory and value-add processes closer to home. But domestic expansion comes with its own challenges: higher labor costs, space limitations, and tighter margins. 

That’s where ASRS becomes a reshoring enabler: 

By combining ASRS with inventory management software like Kardex Power Pick System, you can maintain tighter oversight of SKUs, manage local safety stock, and reduce dependence on overseas lead times. 

3. Tariffs Complicate Inventory Planning—ASRS Supports a Smarter Strategy 

Uncertainty in global sourcing means one thing: you need more inventory on hand.

That’s why many warehouses are shifting from just-in-time (JIT) to just-in-case (JIC) inventory strategies. But storing more SKUs—especially larger or slower-moving items—takes up valuable space. 

ASRS systems like Vertical Lift Modules (VLMs) and Vertical Buffer Modules (VBMs) are purpose-built for this shift:

• Dynamic Slotting: Items are stored based on size and frequency of access, maximizing every cubic inch of space. 

• Automated Tracking: Know exactly where your inventory is, how much you have, and what needs replenishing. 

• Safe Stock Buffering: With denser storage, you can keep more inventory on site without expanding your footprint. 

“If you're shifting to a JIC strategy—and you probably should be—automation is key to making it work. You can pivot without relocating by expanding vertically and optimizing the space you already have." 
— Cal Bowers, Sr. Director of New Business, North Americas at Kardex Remstar 

4. Tariffs Slow Down Supply Chains—ASRS Speeds You Back Up 

Tariff-related delays—from customs processing to port congestion—can wreak havoc on fulfillment timelines. And when goods do arrive late, your warehouse needs to pick up the slack—fast. 

ASRS helps you absorb those hits by drastically improving picking speed, order accuracy, and throughput: 

With automation, you can fulfill more orders with fewer people—keeping SLAs intact even when the supply chain falters. 

5. Tariffs Increase the Cost of Mistakes—ASRS Makes Accuracy Automatic 

With profit margins squeezed by tariffs, even small errors start to sting. Mispicks, returns, and rework don’t just waste time—they erode trust, drive up costs, and chip away at customer loyalty. 

ASRS tackles this head-on with: 

• Light-directed picking to guide users to the right SKU and quantity 

• Integrated verification to catch errors in real time 

• Real-time inventory updates to avoid out-of-stock picks or lost items 

The result? Accuracy rates up to 99.9% and a dramatic drop in mispicks, returns, and customer complaints. 

How Tariffs Are Reshaping the Warehouse Automation Landscape

According to new research from Interact Analysis, the April 2025 tariffs introduced by President Trump are causing major disruptions across the global supply chain—and the warehouse automation sector is feeling the ripple effects.

In their recent article, Trump’s Tariffs: Six Key Effects on the Warehouse Automation Market, Interact outlines the most pressing ways the automation industry is responding.

While some outcomes may slow momentum in the short term, others open the door for strategic adaptation—especially for companies investing in flexible, space-efficient automation like ASRS.

Here are a few key takeaways—and what they mean for warehouse leaders:

1. Economic Uncertainty Is Slowing Capital Investments

With global policy uncertainty now at levels not seen since the peak of the COVID-19 pandemic, many companies are delaying large automation projects, particularly capital-intensive systems. This trend is expected to lengthen sales cycles, especially for fixed infrastructure solutions.

 

What this means: While long-term projects may stall, modular, scalable ASRS systems (like Vertical Lift Modules and Vertical Buffer Modules) offer a more approachable entry point. These systems can be deployed incrementally, delivering fast ROI even in uncertain times.

2. 3PLs Are Leaning Into Automation

As supply chains become more complex, more companies are outsourcing logistics to 3PL providers—and those 3PLs are ramping up investment in flexible automation to handle diverse SKUs and shifting trade flows.

 

What this means: If you’re a 3PL, now’s the time to explore automation that’s designed to adapt quickly, like ASRS paired with dynamic inventory management software. These tools offer agility without the footprint of traditional infrastructure.

3. Inventory Levels—and Demand for Space—Are Rising

Tariff-related supply chain disruptions are pushing companies to build up just-in-case inventory reserves, which is driving demand for more warehouse space and higher rents in key logistics hubs.

 

What this means: ASRS technology helps mitigate rising storage costs by enabling high-density storage in a compact footprint—a critical advantage when leasing space is expensive or expansion is off the table.

4. Steel Tariffs Could Erode ROI for Some Automation Investments

The 25% tariff on steel is expected to drive up the cost of warehouse automation equipment, since most systems rely heavily on steel components. Interact warns this may reduce ROI across both domestic and international automation projects.

 

What this means: If you’re facing budget constraints, opt for ASRS solutions with a modular design, lower upfront CapEx, and fast ROI. Many ASRS units can be installed without major structural modifications—keeping steel usage (and costs) to a minimum.

5. E-Commerce Shifts May Spark Domestic Fulfillment Growth

Tariff changes affecting the De Minimis rule (which previously exempted low-cost e-commerce imports from duty) are expected to hit fast-fashion giants like Shein and Temu. Interact predicts this will lead to a surge in U.S.-based fulfillment centers, stricter packaging standards, and a window of opportunity for American retailers to regain market share.

 

What this means: Domestic e-commerce brands have a chance to leap ahead—but only if their warehouses are equipped to handle the speed and SKU variety of modern fulfillment. ASRS enables batch picking, ergonomic workflows, and high accuracy—key factors in winning the last-mile race.

 

DID YOU KNOW? Kardex Remstar's South Carolina-based manufacturing facility offers tariff-insulated and ready-to-ship standard VLMs. Your warehouse could have integrated Kardex Shuttle VLMs installed and ready to use in as little as 4-6 weeks, with no up-charges from international tariffs. Click here to learn more about our QuickShip program.

 

How to Use Automation to Tariff-Proof Your Warehouse 

You don’t need a brand-new warehouse—or a sky-high budget—to start tariff-proofing your operation. Most companies begin with small, strategic upgrades that deliver big returns fast. 

Here’s a step-by-step roadmap to help you build a warehouse – or optimize your existing space – that’s faster, leaner, and more resilient in the face of trade disruptions. 

1. Audit Your Current Operation for Tariff Vulnerabilities 

Before jumping into automation, take a hard look at your current processes. Where are you most exposed to tariff impacts? 

Start by asking: 

• Are you heavily dependent on imported components or raw materials? 

• Is inventory often delayed due to customs, port congestion, or overseas lead times? 

• Are rising labor and real estate costs eating into your margins? 

• Do you have the flexibility to scale labor or space as demand shifts? 

Identifying these vulnerabilities will help prioritize automation opportunities that deliver the most value fastest. 

2. Set Clear, Measurable Goals 

Know what success looks like before you invest. Some common goals we see from warehouse leaders include: 

• Reclaiming floor space to expand domestic production or inventory 

• Reducing picking labor by 50% or more 

• Shortening order cycle times to offset longer global lead times 

• Improving inventory accuracy to 99.9%+ 

• Creating a more scalable operation that adapts to policy changes 

Tie your ASRS investment directly to these goals. That alignment is key to executive buy-in and long-term ROI. 

3. Choose the Right ASRS Technology for Your Needs 

There’s no one-size-fits-all ASRS system. The right solution depends on your SKU profile, throughput, and available space. 

Here’s a quick guide to help: 

 “Everyone’s talking about tariffs – and rightfully so – but we’ve already built around them. We’re excited to announce our new QuickShip program, which allows us to deliver standard Kardex Shuttle VLMs faster than ever—direct from our South Carolina plant. It’s all about giving our customers the speed and reliability they need, even in a volatile market. While other manufacturers are scrambling, we’re shipping.”  

— Mark Dunaway, President – Americas at Kardex Remstar

Many companies start with one zone or product category, then scale across the operation as savings stack up. 

4. Don’t Forget the Software 

ASRS is only as powerful as the software that drives it. Pair your automation with robust inventory management software like Kardex Power Pick System to enable: 

• Real-time inventory visibility and control 

• Order batching and smart sequencing 

• Automatic replenishment alerts 

• Seamless integration with WMS, ERP, or MES systems 

Software makes your ASRS smarter—and your team more efficient. 

5. Plan a Phased Rollout to Minimize Disruption 

Good news: You don’t have to shut down operations to install ASRS. 

Most systems are modular and scalable, which means you can install them in stages: 

• Start with one critical area (e.g., high-turnover parts or overseas-dependent SKUs) 

• Train your core team and test workflows 

• Scale up once you see results 

This phased approach limits risk, speeds up ROI, and builds internal confidence. 

6. Train Your Team for Adoption, Not Just Operation 

The tech is powerful—but your people still make the difference. 

Make sure operators are trained not just in how to use ASRS, but in how to embrace it. Focus on: 

• Safe and efficient operation 

• Troubleshooting basics 

• Reading system alerts and dashboards 

• Best practices for ergonomics and productivity 

When your team feels confident, the adoption curve is faster—and smoother. 

7. Track KPIs and Optimize Continuously 

Once your ASRS is live, keep the momentum going by monitoring key performance indicators (KPIs) like: 

• Picking accuracy and lines per hour 

• Labor hours saved 

• Space reclaimed 

• Inventory turnover rate 

• Time-to-ship metrics 
  

Use this data to spot new automation opportunities, justify additional investment, and stay one step ahead of future tariff impacts. 

Tariffs Today, Recession Tomorrow: How ASRS Helps You Prepare for Both 

While the headlines focus on tariffs, the deeper concern for many warehouse managers is what comes next: a potential recession. The sweeping April 2025 tariff hikes didn’t just raise import costs—they sent shockwaves through global markets. The S&P 500 dropped 3.7%, European and Asian stock markets plunged, and oil prices sank by over $2 a barrel. 

The real danger of tariffs isn’t just price increases—it’s the domino effect they can trigger: 

• Decreased trade volumes 

• Inflationary pressure on consumer goods 

• Retaliatory tariffs from U.S. allies 

• Higher operating costs with less revenue to offset them 

That’s why forward-thinking warehouse leaders are looking beyond short-term tariff strategies and asking: 

How do we build an operation that thrives during economic uncertainty? 

The answer is automation. 

How to Use Automation as a Recession Buffer 

ASRS systems don’t just help you avoid tariff pain—they help you recession-proof your warehouse by stabilizing core cost drivers like labor, space, and inventory. 

Here’s how: 

Labor Volatility? No Problem. 

Recessions often mean tighter hiring budgets, workforce instability, and unpredictable labor pools. But with ASRS, you can: 

• Reduce labor needs by up to 66% 

• Shift from manual picking to automated, goods-to-person workflows 

• Run a lean core team with a flexible labor strategy, scaling up or down without sacrificing throughput 

Rising Overhead? Reclaim Your Space. 

Recessions pressure businesses to cut costs fast—but expanding warehouse space is costly and risky, especially in an uncertain economy. ASRS offers a smarter path: 

• Free up to 85% of floor space 

• Avoid major real estate investments or construction projects 

• Repurpose admin or underutilized space for production, kitting, or fulfillment 

As Mark Dunaway, President of Kardex Remstar North America, put it: 

“In the face of economic uncertainty, you really don’t want to build or buy right now. ASRS lets you grow inside your existing footprint.” 

Inventory Instability? Localize and Protect. 

Both tariffs and recessions make international supply chains more fragile. Shifting from just-in-time (JIT) to just-in-case (JIC) inventory strategies is one way to stay protected—but that requires more space and smarter inventory control. 

With ASRS: 

• You can store more inventory in less space, without sacrificing accessibility 

• Real-time tracking and integrated software reduce waste, shrinkage, and stockouts 

• You’re better positioned to ride out supplier disruptions or delays 

“Tariffs may hit raw materials today, but a recession could wipe out suppliers tomorrow. ASRS helps you stay ahead of both.” Cal Bowers, Sr. Director of New Business, North America at Kardex Remstar 

Learn more about how automation can recession-proof your warehouse here.  

Tariffs Are Unpredictable—Your Warehouse Doesn’t Have to Be 

In today’s global climate, tariffs can change overnight. Your operation can’t afford to be reactive. By investing in warehouse automation—especially ASRS—you build a buffer against uncertainty and gain control over the variables that matter most: cost, speed, accuracy, and resilience. 

“Automation isn’t just about efficiency anymore. It’s about control—over your space, your labor, your inventory, and your future." 
— Christina Dube, Director of Marketing, Americas at Kardex 

Whether you’re reshoring, optimizing for a recession, or simply bracing for whatever the next tariff round brings, ASRS positions your warehouse to handle it—without missing a beat. 

Ready to talk about ASRS for your warehouse? Contact us today.