Key Tariff Strategies for Future-Proofing Your Business

May 28, 2025 | by Atherton & Associates, LLP

The global trade environment has become increasingly complex due to recent announcements of universal tariff increases and heightened reciprocal rates for certain countries. While the media often highlights the political angles of these changes, businesses must take practical steps to avoid costly pitfalls. Tariffs can alter operating costs, disrupt supply chains, and affect pricing strategies—regardless of a company’s size or industry. Building a proactive plan to address these challenges can make all the difference in maintaining profitability and future-proofing your business.

This article explores what tariffs mean, why they matter, and how you can respond with a forward-looking mindset. By implementing the right strategies today, you can boost your resilience against shifting trade policies in the years to come.

Understanding Tariffs and Their Scope

Tariffs are government-imposed taxes on imported goods. When U.S. businesses import items from overseas—whether raw materials, components, or finished products—they typically pay these taxes at the point of entry. The specific rates vary depending on how a product is classified, its country of origin, and the overall trade climate. Some tariffs are calculated as a percentage of the product’s value (an ad valorem tariff), while others are a fixed fee per unit (a specific tariff).

In the United States, tariffs are not administered by the Internal Revenue Service or the Treasury Department. Rather, they fall under the Department of Homeland Security’s Customs and Border Protection. Its role includes collecting duties, enforcing compliance with customs regulations, and responding to evolving trade policies. Governments impose tariffs for multiple reasons, including generating revenue, protecting domestic industries, and regulating imported goods.

The Impact of Tariffs on Businesses

Although large multinational corporations are often in the spotlight, the scope of tariff impact extends to businesses of all sizes. A company’s reliance on imports, existing contractual obligations, and market dynamics can determine how hard these tax changes hit. There are several key areas of concern:

Supply Chain Challenges. Tariffs can make originally cost-effective supply chains suddenly more expensive. If your business depends on overseas producers, shifting trade rules may leave you scrambling for domestic or alternative international sources. This uncertainty can throw off inventory management, especially if certain products are subject to steep import taxes.

Pricing Adjustments. Higher costs from tariffs might compel you to adjust your pricing strategy. Businesses must decide whether to absorb the added expense—risking margins—or pass it on to customers. Small and medium-sized enterprises in particular may find it difficult to shoulder these added costs, so a carefully crafted approach to raising prices can help preserve customer goodwill.

Financial Reporting Implications. When you’re recalculating cost of goods sold, tariff expenses cannot be overlooked. Accurately attributing these additional fees to your product costs is vital for precise financial reporting and to maintain a realistic picture of profit margins. If your business is publicly traded, transparent reporting on the implications of tariffs is often expected by stakeholders.

Special Considerations for Small Businesses. Smaller companies may feel a disproportionate impact because they often operate on narrower profit margins. Moreover, many small businesses rely on strong, enduring relationships with overseas suppliers, which can be costly to shift or rebuild elsewhere. For certain organizations, adjusting product lines or seeking new supply channels may be necessary to sustain operations in the face of changing tariffs.

Key Strategies for Future-Proofing Against Tariffs

Though trade policies can change quickly, there are several approaches that businesses can adopt to navigate uncertainty and remain resilient. By implementing these strategies, you position your organization to adapt as conditions evolve:

1. Review and Update Existing Contracts and Agreements. Take a fresh look at your current supplier and vendor contracts. Some agreements include provisions that address sudden shifts in tariffs, allowing for renegotiation or flexibility in purchase commitments. You might find “force majeure” clauses or language specific to tariff escalation. Checking these details early can provide a roadmap for making adjustments without facing heavy penalties.

2. Assess Alternative Sourcing and Supply Chain Diversification. If tariffs substantially increase costs, investigate options in lower-tariff jurisdictions or even domestic alternatives. Although moving production or finding new suppliers can be disruptive, in some cases it may be more cost-effective in the long run. Even for businesses that remain dependent on certain imports, diversifying the supply chain to include multiple sources reduces vulnerability to tariff hikes in any one region.

3. Cost Management and Pricing Strategy. Calculating the overall financial impact of tariffs can help guide your decisions on product pricing. Some companies opt for transparent “tariff surcharges” so customers and partners understand these added costs arise from external factors. Striking the right balance between profitability and customer loyalty can be challenging, but a phased or clearly labeled price adjustment can make it more palatable.

4. Leverage Duty Exemptions and Relief Programs. You might qualify for exemptions under trade agreements such as the USMCA if your imports meet specific origin criteria. Duty drawback programs can also offer a rebate if you import goods but subsequently export them. Additionally, operating within a Foreign Trade Zone (FTZ) may allow you to defer or reduce some of your duties until the goods leave the zone. Staying informed about legislative updates and special exemption windows can result in significant savings.

5. Implement Robust Scenario Planning and Compliance Tools. Technology can be a powerful ally in uncertain times. By using predictive analytics or supply chain management software, you can model multiple tariff scenarios and evaluate where costs might spike. This ensures you’re ready to pivot quickly if conditions worsen. The right software can also aid in compliance, reducing the risk of fines for misclassifying products under the Harmonized Tariff Schedule.

6. Seek Expert Guidance. Tariff regulations are highly nuanced, with shifting deadlines and complex definitions. Enlisting a professional who understands international tax policies, supply chain logistics, and customs regulations can be invaluable. An expert may identify hidden cost-saving measures or clarify potential liabilities you hadn’t considered. Act early, before new rules or deadlines take effect, to avoid last-minute scrambling.

Securing Strength Amid Trade Shifts

From increased costs and inventory disruptions to the financial complexities of assigning tariff-related expenses, tariff regulations create pressure points across the entire business landscape. The most resilient organizations are those that move now, assessing vulnerabilities, rewriting contracts, and diversifying their sourcing setups. Thoughtful planning—backed by professional expertise—can turn tariff upheavals into opportunities for renewed efficiency and stronger partnerships.

Acting with a sense of urgency could be the difference between sinking or swimming in our new tariff trade environment. With the right strategies in place and expert advice at your side, you can protect your bottom line and secure success amid ongoing changes in tariff policy.