As of 2025, many U.S. businesses importing from China and other regions are facing tariff rates that exceed 100%. Margins are under pressure, and inaction is no longer an option.
You can’t control trade policy, but you can control how you respond. These six strategies are practical, proven, and legal ways to reduce, defer, or work around tariffs—helping you protect margins and stay competitive.
1. Delivered Duty Paid (DDP)
Quick Summary: Your supplier handles duties, clearance, and shipping—often declaring a lower customs value.
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Effort: Low
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Savings Example: ~$1,750 on a $10,000 shipment
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How It Works: If a $10,000 shipment is declared at $3,000, a 25% tariff costs $750 instead of $2,500.
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Risk: Works only with reputable suppliers. If CBP audits, documentation must hold up.
2. Unbundling Components
Quick Summary: Import major parts separately at lower tariff codes; assemble domestically.
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Effort: Moderate
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Savings Example: $20,000 saved per $100,000 shipment
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How It Works: A treadmill may face a 25% duty, but the motor, frame, and console shipped separately might fall to 3–5%.
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Use Case: Fitness companies have done this for years to avoid punitive rates on finished equipment.
3. First Sale Rule
Quick Summary: Declare duties based on the manufacturer’s sale price—not the final resale price.
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Effort: Low (requires documentation)
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Savings Example: $500 saved per $7,000 shipment
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How It Works: If the factory sells at $5,000 to a trading company that resells at $7,000, you can legally declare $5,000 as customs value.
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Note: Fully legal but documentation must be tight.
4. Tariff Engineering
Quick Summary: Slightly change product design to fit into a lower-duty category.
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Effort: Moderate
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Savings Example: Save ~8% per unit
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How It Works: A blouse may face a 16.5% duty while a shirt pays 8.5%. By adding a pocket or altering fabric weight, classification changes.
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Best For: Apparel, electronics, and consumer goods with flexible design specs.
5. Stockpiling Before Tariff Hikes
Quick Summary: Import ahead of scheduled tariff increases.
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Effort: Low (cash flow and warehousing required)
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Savings Example: $100,000 saved on $1M shipment before a 10% hike
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Best For: Companies with predictable demand cycles.
6. Bonded Warehousing
Quick Summary: Store goods in a bonded warehouse and defer tariff payments until goods are sold.
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Effort: High (requires compliance and setup)
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Savings Example: Defer ~$75,000 in duties on $500K inventory
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Best For: High-volume importers managing complex cash flow.
Quick Comparison
| Strategy | Effort | Best For |
|---|---|---|
| Delivered Duty Paid | Low | Fast relief, no setup |
| First Sale Rule | Low | Importers using intermediaries |
| Stockpiling | Low | Predictable demand cycles |
| Unbundling Components | Moderate | Complex products, mid-volume |
| Tariff Engineering | Moderate | Brands with design flexibility |
| Bonded Warehousing | High | High-volume importers |
Final Recommendations
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Start with the easy wins: DDP, First Sale Rule, and Stockpiling.
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As volume grows, explore Unbundling and Tariff Engineering.
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Use Bonded Warehousing if you’re importing at scale and want better cash control.
Even a small improvement in landed costs can swing margins, pricing power, and competitiveness in your favor. In a high-tariff world, doing nothing is the most expensive option.
👉 Need help evaluating which strategy fits your business? Visit www.apexceo.co or DM me on LinkedIn.
Luke Peters is a founder, advisor, and former CEO who built and sold an $80M consumer product brand. Through Apex CEO, he now helps founders and PE-backed CEOs scale smarter, boost profitability, and prepare for exits.
