Adapting to Tariff Related Uncertainty

Geopolitical instability and changing international trade conditions have increased uncertainty for organizations operating in internationally integrated industries. The automotive industry is exposed through its dependence on cross-border supply chains, international production structures, and supplier networks. While previous research has examined tariffs and trade disruptions in relation to supply chains and organizational adaptation, less is known about how tariff related changes are interpreted and managed in automotive supplier organizations and reflected in organizational strategy and workforce adjustments. The purpose of this study is to examine how supplier organizations in the automotive industry interpret and respond to tariff related changes, and how these developments are reflected in organizational strategy and workforce related adjustments. The study uses a qualitative research design based on 16 semi-structured interviews. The empirical material was analyzed through reflexive thematic analysis using an abductive approach, with the Dynamic Capabilities framework used as an analytical lens. The findings show that tariffs are interpreted not only as financial costs, but as broader structural pressures affecting supply chains, market conditions, and organizational uncertainty. Organizations respond through changes to sourcing and production structures, relocation, diversification, and adjustments to strategic priorities. These responses are also reflected internally through restructuring, workforce reductions, redeployment, redistribution of responsibilities, and competence retention. The study contributes by applying Dynamic Capabilities to tariff related and geopolitical trade uncertainty in automotive supplier organizations and by connecting organizational adaptation to workforce related changes. From an SHRM perspective, the findings highlight the importance of workforce flexibility, competence retention, and the alignment of human resources with broader strategic adaptation during external instability.