Software Developer Urges More Upstream Responses to Trade Compliance

"What do we mean by shift left? So, that comes from software engineering... In security and software engineering, [we] build in security at the beginning. Don't add security at the end, because it's too late at the end. That's our big mantra in software engineering," said Joe Morales, chief technology officer and co-founder of Quickcode.ai, a software company that specializes in AI-assisted Harmonized System classification. Morales was trained as an engineer.

In terms of trade compliance, Morales said that means "building trade compliance at the beginning. If you think about a process flow, you think of processes going from left to right, like an approach flow chart. So, shift trade compliance" to the beginning of the process.

Shifting the management of trade compliance upstream comes as companies experienced a tumultuous 2025, consisting of roughly 25 revisions to the Harmonized Tariff Schedule, revised tariffs to multiple countries, Section 232 stacking complexity, the end of de minimis, additional export controls and European ESG requirements, according to Morales.

"There's obviously enormous deltas now in the supply chain," Morales said. Previously, companies only had to ask whether a product originated in China, but now, "there are deltas all the way across the board," and costly penalties can arise if you make mistakes, he said.

Shifting trade compliance internally requires continuous communication with colleagues in engineering, product development, procurement and sales, according to Morales. It means communicating elements to sales such as determining good landing costs and lead times, while discussing product design and sourcing with those in product development and procurement, he said.

"How do you communicate those changes in your sales, product design? What is the thing made out of? Where is it going to come from, sourcing?" Morales said, adding that companies also need to be aware of their exposure to forced labor and antidumping. "There's all kinds of country risks out there, some of which are not new this year, but many that are new because of the administration's ongoing trade wars with countries around the world."

As a software vendor, Morales recommended using AI-informed software to facilitate a company's transition. But updating software can also enable compliance teams to handle the more complex trade environment.

"You can't have multiple people updating the spreadsheet, because they'll just overwrite each other's changes. So, that's worked for decades because you've had these small compliance teams, right? You've had people who have been working in the same jobs for decades. They've built up these little tools. They know what to do. They know how to do it. There's not any visibility outside of them. They don't need to worry about visibility outside of them," Morales said. But now, "you need visibility outside of yourself. You can't do that in Microsoft Excel. ... You need to have a tool, or tools, in most cases, that allow visibility across the organization, and that includes classification tools."

These tools may include tariff calculators, supply chain mapping platforms, trade route optimization or supplier optimization software, among other tools, according to Morales.

Those involved in a company's trade compliance may face resistance from other company departments used to maintaining the operational status quo. Overcoming that may involve showing others the risks that the company faces being non-compliant, Morales said.

"The way it's framed is by reducing risk: reducing risk that we're going to have a tariff surprise, reducing risk that we're going to be noncompliant and have to pay a fine, go to jail," he said. "And then besides risk reduction, there's cost savings. If you can figure out the best places to import from, vis-à-vis tariffs, then you can save a lot."