When I ran NewAir, I had to learn how to manage the first wave of Trump tariffs the hard way. I reacted too slowly—and it cost me. Margins got squeezed, and by the time I made the necessary moves, I had already lost money.
Eventually, I had to use every lever on this list, including raising prices. But the biggest lesson was simple:
🔥 You have to act fast. Be decisive. 🔥
The worst mistake is waiting too long—especially on price increases. It takes time to push them through, and if you hesitate, you’re eating the cost while your competitors are adapting.
Now, with that experience under my belt, here are 9 levers CEOs can use to stay ahead, protect margins, and keep growing despite rising tariffs.
1. Optimize Pricing Strategy
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Break price increases into smaller steps instead of one big jump.
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Bundle products or adjust packaging sizes to shift consumer focus.
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Launch premium SKUs with added value (extended warranty, packaging, etc.).
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Track competitors—if they’re moving prices, you can too.
2. Diversify Sourcing
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Look beyond China—Vietnam, India, Mexico, and the U.S. are viable.
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Use dual-sourcing: keep some production in China, shift key SKUs elsewhere.
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Factor in logistics—sometimes “closer to home” is cheaper overall.
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Pick the right manufacturing clusters (e.g., Monterrey vs. Guadalajara in Mexico).
3. Negotiate with Suppliers
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Push for lower prices or extended payment terms (30 → 60 or 90 days).
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Consolidate orders for volume discounts.
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Ask for extras—better packaging, included logistics, or free upgrades.
4. Leverage Duty Drawback Programs
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If you export, you may reclaim up to 99% of tariffs paid.
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U.S. Duty Drawback can mean millions back in your pocket.
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Work with a seasoned customs broker—don’t DIY this.
5. Enhance Operational Efficiency
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Reduce packaging weight to cut freight costs.
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Ship from the right warehouse hub to lower last-mile costs.
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Automate small workflows—labor is often your biggest leak.
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Audit freight—slow shipping might save more than you think.
6. Restructure Product Offerings
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Focus on higher-margin SKUs.
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Redesign to avoid tariff-heavy components.
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Cut down SKUs to boost buying power.
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Explore pre-assembly in China with final assembly elsewhere.
7. Strengthen Brand & DTC Channels
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Own your audience—don’t be just another SKU on a retailer’s shelf.
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Invest in DTC (site, email list, subscription models).
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Build brand loyalty so you can defend pricing power.
8. Implement Tariff Engineering (HTS Code Optimization)
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Tariff classification can change based on product specs.
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Small changes to design or materials may shift you to a lower duty rate.
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Work with a classification expert—this is where hidden savings are found.
9. Leverage Trade Policy Advocacy
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Join industry associations pushing for tariff relief.
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Provide data showing impact (job losses, inflation).
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Apply for tariff exemptions—there’s usually a short window.
Case Study: Mid-Continent Nail Corporation
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Tariffs on steel raised production costs by 25%.
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Orders fell 70%. They cut 130 jobs.
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Instead of folding, they adapted:
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Lobbied for exemptions.
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Diversified steel sourcing.
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Streamlined operations.
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Adjusted pricing to stay competitive.
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They survived because they acted fast.
The Takeaway
You can’t stop tariffs—but you can outmaneuver them. The best brands don’t wait. They move first, protect margins, and keep scaling while competitors stall.
👉 Question for you: If tariffs hit your industry tomorrow, do you have a playbook—or would you get caught flat-footed?
