This article is part of a multi-part series designed to help business leaders navigate the evolving tariff landscape with strategic clarity and operational resilience.
The Trump trade doctrine isn’t going away. And you don’t need a Fortune 500 budget to respond effectively. Here’s your practical playbook for managing tariffs—whether you’re running a global enterprise or a smaller operation.
Immediate Assessment: Know Where You Stand
Map Your Exposure (Before You Do Anything Else)
First things first: you need to know exactly where you’re vulnerable. Which of your products contain components from tariff-affected countries? What’s the potential hit to your bottom line?
Don’t guess—calculate. This baseline understanding is absolutely critical before making any moves. I’ve seen companies rush into solutions before understanding their actual exposure, and it rarely ends well.
Review Your Contract Language
Pull out those supplier and customer contracts. Those boring legal clauses about price adjustments and force majeure? They suddenly matter a lot.
Look specifically for:
- Price adjustment provisions
- Force majeure clauses
- Change in law provisions
- Notice requirements for price changes
Knowing your rights and obligations gives you leverage in what comes next.
Take a Hard Look at Your Product Classifications
Here’s something many businesses miss: seemingly small differences in how you classify your products can lead to dramatically different tariff rates.
The Harmonized Tariff Schedule is complex for a reason—it creates opportunities. A slight adjustment in how you classify a product might mean the difference between a 25% tariff and a 5% tariff. Consult with a customs broker who knows the nuances.
Short-Term Responses: Buying Time While You Strategize
Get Sophisticated About Price Adjustments
Simply passing all tariff costs to customers isn’t strategy—it’s surrender. Instead, model different scenarios:
- Which products can absorb more cost?
- Where do you have price elasticity?
- Can you use tiered approaches where some products bear more burden than others?
The most successful companies I’ve worked with develop a surgical approach to price adjustments rather than a blanket policy.
Smart Inventory Management
If you can predict when tariffs will hit, accelerating inventory purchases can buy you months of buffer. Just be careful—this strategy needs to balance against:
- Increased carrying costs
- Cash flow implications
- Warehouse capacity
- Product obsolescence risk
Your finance team should be directly involved in this decision.
Supplier Conversations You Need to Have
Your suppliers may be more flexible than you think. Open honest dialogues about:
- Sharing the tariff burden
- Alternative shipping arrangements
- Minor product modifications that might reduce exposure
- Shifting production to non-affected countries
Remember—they want to keep your business. Use that leverage.
Documentation & Compliance: Finding Money You’re Leaving on the Table
The Duty Drawback Opportunity
Here’s a strategy many businesses overlook: If you export products containing imported components that faced tariffs, you may qualify for duty drawbacks—essentially refunds on those tariffs.
The paperwork is cumbersome, but the savings can be substantial. I’ve seen a manufacturing company recover over $2 million through a drawback program they didn’t know existed.
Bonded Warehouses: The Overlooked Tariff Strategy
Think of bonded warehouses as a financial breathing space. These facilities allow you to store imported goods without paying duties until they’re released into the domestic market.
The strategic advantages are significant:
- Defer duty payments until you actually need the goods
- Pay no duties at all on goods you re-export
- Process and manipulate goods while in bond (with proper permits)
- Manage cash flow more effectively during uncertain trade periods
Unlike Foreign Trade Zones, bonded warehouses are relatively simple to access for businesses of all sizes. Many third-party logistics providers offer bonded space without requiring you to manage the facility.
I’ve observed a retailer use bonded warehouses to store seasonal products from China, paying duties only as inventory moved to distribution centers. This strategy freed up over $800,000 in cash flow during a critical growth period.
And here’s one timely advantage: If tariffs are reduced while your goods are still in the bonded warehouse, you pay the lower rate when those goods are released. In today’s volatile trade environment, that flexibility can create meaningful savings and planning leverage.
Foreign Trade Zones: Not Just for Giants
Think FTZs are only for massive corporations? Think again. These designated areas allow you to:
- Delay duty payments
- Reduce overall duty exposure
- Sometimes eliminate duties on exports
- Simplify compliance procedures
The application process has become more accessible for mid-sized businesses. Don’t write this off without investigation.
Example: One Midwest electronics assembler started using an FTZ for its component imports. They delayed over $1.2 million in annual duty payments while accelerating their production cycle—and they simplified customs compliance in the process. It wasn’t just a tax win—it created new working capital and efficiency gains that let them scale faster.
The “First Sale” Rule: Your Secret Weapon
For multi-tier supply chains, this valuation method can substantially reduce the dutiable value of your imports. Here’s how it works:
Normally, if you buy from a middleman who bought from a manufacturer, you pay tariffs on the price you paid to the middleman. Under the First Sale Rule, you can instead pay duties based on the first sale price—what the manufacturer charged the middleman.
Let’s make this concrete: Consider a furniture retailer importing chairs that cost $100 each from a trading company. That trading company buys those same chairs from the manufacturer for $70.
- Standard approach: Pay tariffs on $100 (the price to the retailer)
- First Sale approach: Pay tariffs on $70 (the original manufacturer’s price)
With a 25% tariff, that’s a reduction from $25 to $17.50 per chair. For a volume of 10,000 chairs annually, this saves $75,000 in duties.
The documentation requirements are stringent—you’ll need proof of both transactions and confirmation that the goods were clearly destined for the U.S. at the time of first sale. But for high-volume importers, the savings often justify the administrative investment.
Your Next Steps
These fundamental strategies provide an essential foundation for any business affected by tariffs. You don’t need to implement all of them—even adopting two or three can significantly mitigate tariff impacts while you develop more comprehensive responses.
The businesses that navigate today’s tariff environment successfully aren’t necessarily the largest—they’re the most adaptable and proactive.
In Article 7, I’ll dive deeper into advanced strategies that leading companies are using to completely restructure their supply chains in response to the new trade reality. But you don’t need to wait for those insights to start protecting your business today.
Which of these strategies are you already implementing? What challenges are you encountering?
